Tesla has launched a significantly cheaper Model 3 in Australia, intensifying competition in one of the world's fastest changing electric vehicle markets.
The new 2027 Tesla Model 3 Rear Wheel Drive starts at A$45,900 before on road costs, compared with A$54,900 for the Model 3 Premium Rear Wheel Drive that previously represented the cheapest entry point into the range.
Orders opened on October 1, with the first Australian customer deliveries expected from the middle to late October.
The move effectively cuts the entry price of a new Model 3 by A$9,000.
Tesla takes aim at cheaper EV rivals
The aggressive new price puts the Model 3 directly into territory occupied by increasingly competitive electric vehicles from Chinese, Korean and Japanese manufacturers.
At A$45,900 before on road costs, the new Model 3 is now Australia's cheapest electric sedan, according to Australian automotive publications Carsales and Cars24.
That positions Tesla below rivals including the Kia EV4 Air and BYD Seal Premium.
Competition in Australia has intensified dramatically as Chinese manufacturers expand their EV lineups and put pressure on established brands.
Tesla's answer appears to be a simpler Model 3 with a substantially lower starting price.
Cheaper Model 3 still offers 572km range
Perhaps the biggest surprise is its claimed driving range.
Tesla says the new Model 3 Rear Wheel Drive can travel 572km on the WLTP testing cycle.
It can accelerate from zero to 100km/h in 6.2 seconds.
That means the cheaper car actually has a higher claimed range than the A$54,900 Model 3 Premium Rear Wheel Drive, which is currently rated at 520km WLTP.
The Premium version is slightly quicker, completing the zero to 100km/h sprint in 6.1 seconds.
What has Tesla removed?
The lower price comes with compromises.
The Model 3 Rear Wheel Drive loses some of the equipment offered in more expensive versions.
According to News.com.au, deleted features include the rear passenger touchscreen, heated rear seats, ventilated front seats, ambient interior lighting and the full vegan leather interior available in the Premium model.
Tesla has therefore taken a familiar approach to creating a cheaper EV: preserve the core electric drivetrain, range and technology while reducing comfort and luxury equipment.
The exterior retains several important features, including the panoramic glass roof, Matrix LED headlights, automatically folding mirrors and hands free boot opening.
Model 3 gets a useful new feature
The 2027 update also introduces something Australian Tesla owners have been requesting.
The Model 3 gains Powershare capability, allowing the vehicle's battery to provide electricity to external equipment.
Owners can connect compatible devices through Tesla's Outlet Adapter, currently priced at A$145 in Australia.
This type of technology, commonly known as vehicle to load capability, can allow an EV to power equipment such as camping appliances, tools or other electrical devices.
The feature cannot be retrofitted to older Model 3 vehicles, according to Tesla Australia information reported by CarExpert.
Four Model 3 versions now available
The arrival of the cheaper model expands the Australian Model 3 range to four versions.
The new Model 3 Rear Wheel Drive starts at A$45,900.
Model 3 Premium Rear Wheel Drive starts at A$54,900, while the Premium Long Range Rear Wheel Drive costs A$61,900.
At the top of the range, the Model 3 Performance All Wheel Drive is priced at A$80,900 before on road costs.
The Long Range version offers the greatest claimed range at 750km WLTP, while the updated Performance now reaches 600km and accelerates from zero to 100km/h in a claimed 3.1 seconds.
Model Y also gets cheaper
Tesla's Australian pricing changes extend beyond the Model 3.
The 2027 Model Y Performance has received a A$4,500 price reduction, dropping from A$89,400 to A$84,900 before on road costs.
The reduction coincides with Australian Model Y Performance production switching from Tesla's German factory to its Shanghai facility in China.
Tesla has not announced equivalent price reductions for the other Model Y variants.
The company has, however, improved acceleration for some versions and expanded Powershare capability across the range.
Australia's EV battle is getting tougher
The timing of the new Model 3 is significant.
Tesla faces increasingly intense competition in Australia from manufacturers including BYD, Kia and a growing number of Chinese EV brands.
But Tesla has also enjoyed a stronger 2026 in the Australian market.
The Model Y became the first electric vehicle to lead Australia's monthly new vehicle sales when it topped the market in May. It returned to first place across all vehicle types in August and currently ranks among Australia's strongest selling vehicles for the year.
The A$45,900 Model 3 now gives Tesla another weapon in that competition.
Instead of introducing an entirely new budget vehicle, Tesla has lowered the barrier to its existing electric sedan.
For Australian buyers considering a Tesla Model 3, the equation has therefore changed substantially: the cheapest way into a new Model 3 now costs A$9,000 less than it did before.
