In a significant development that has disappointed Tesla enthusiasts across Australia, the company has officially halted plans to bring its flagship Model S and Model X vehicles to the Australian market. This decision marks the end of an era for Tesla’s premium offerings in the country and signals a major shift in the company’s strategy for right-hand drive (RHD) markets. As Tesla focuses on global production efficiency and navigates economic challenges, Australian customers have been left wondering what led to this unexpected change in direction.
The End of an Era for Australian Tesla Enthusiasts
For years, Tesla’s Model S and Model X represented the pinnacle of electric vehicle technology. As the company’s premium offerings, these vehicles showcased Tesla’s cutting-edge innovations, from lightning-fast acceleration in the Plaid variants to industry-leading range and luxurious interiors. Australian Tesla fans were particularly excited when the refreshed versions of these models were announced in 2021, with the Model S and Model X initially appearing on Tesla’s Australian website with pricing information.
The Model S was listed at $129,990 for the Long Range variant and $186,990 for the high-performance Plaid model, while the Model X was priced at $149,990 for the Long Range and $174,990 for the Plaid version. Many Australian customers placed deposits, eagerly awaiting the arrival of these flagship vehicles to their shores.
However, the excitement gradually turned to uncertainty as Tesla removed pricing information from its Australian website in early 2022, followed by the elimination of the reservation option in April 2023. The final blow came in May 2023, when Tesla officially announced that the Model S and Model X would not be produced in right-hand drive configuration, effectively canceling all Australian orders.
In emails to customers who had placed deposits, some waiting since 2020, Tesla stated: “Due to recent changes to the vehicle program, Model S/X will not be available in Right Hand Drive. Unfortunately, this means your order is unable to be fulfilled and will be cancelled. You will receive a full refund for any payments made.”
As a gesture of goodwill, Tesla offered affected customers a $3,000 AUD credit toward the purchase of a Model 3 or Model Y, though this did little to appease those who had their hearts set on the flagship models.
Engineering and Economic Challenges Behind the Decision
Tesla’s decision to cancel right-hand drive production for its flagship models stems from a complex interplay of engineering challenges, production constraints, and economic considerations.
Engineering Complexities
One of the primary factors behind Tesla’s decision involves the significant engineering complexities associated with converting the refreshed Model S and Model X platforms to right-hand drive configuration. Industry observers have speculated that the redesigned vehicles may have presented fundamental engineering obstacles that made RHD conversion particularly challenging.
Some automotive commentators have suggested there could be a “fundamental engineering flaw in the new design” that makes it “impossible to engineer a factory solution to produce right-hand-drive.” While Tesla has not officially confirmed these engineering difficulties, the complete cancellation of RHD versions suggests that the technical hurdles were substantial.
The updated Model S and Model X featured significant architectural changes compared to their predecessors, including revised interiors with the controversial yoke steering wheel, relocated center displays, and new driving dynamics. Converting these complex systems for right-hand drive markets would require extensive re-engineering, testing, and certification—a costly proposition for relatively small-volume markets.
Production Efficiency and Volume Considerations
Tesla’s manufacturing strategy has increasingly focused on production efficiency and volume. The Model 3 and Model Y have become the company’s volume leaders, with over 1.2 million units produced in 2022 alone. By comparison, the Model S and Model X accounted for only about 71,000 units globally during the same period.
The disparity in production volume makes it difficult to justify the costs associated with maintaining separate production lines for right-hand drive versions of the flagship models. Tesla representatives reportedly told media outlets that axing the RHD format from the Model S and Model X would help them “ramp up production and improve quality more effectively.”
The Fremont factory, where Model S and Model X are produced, faces capacity constraints, and Tesla appears to have prioritized maximizing the production of left-hand drive versions for larger markets. Allocating production capacity to RHD models would potentially reduce the overall output of these already low-volume vehicles.
Economic Factors and Currency Considerations
The economic equation for selling premium vehicles in right-hand drive markets like Australia has become increasingly challenging. Currency fluctuations have played a significant role, with the Australian dollar, along with other RHD market currencies like the British pound and Japanese yen, declining significantly against the US dollar in recent years.
This unfavorable exchange rate environment means Tesla would need to charge substantially higher prices in Australia to maintain profit margins, potentially pushing the vehicles beyond what the market would bear. For example, analysts have estimated that a Model S Plaid in Australia could have cost upwards of $250,000 AUD with current exchange rates, placing it in direct competition with established luxury EVs from European manufacturers.
The relatively small size of the Australian market compounds these economic challenges. With historical sales figures showing approximately 2,569 Model S vehicles sold in Australia from 2014 to 2020 and 1,724 Model X units from 2016 to 2020, the potential sales volume may not justify the investment required to produce RHD versions.
Tesla’s Changing Global Strategy
Tesla’s decision regarding the Model S and Model X in Australia reflects broader strategic shifts within the company as it evolves from a luxury niche player to a mass-market EV manufacturer with global ambitions.
Focus on Mass-Market Vehicles
The Model 3 and Model Y have become the centerpieces of Tesla’s global strategy, accounting for approximately 95% of the company’s total vehicle production. These more affordable models have proven extraordinarily successful, with the Model Y becoming the world’s best-selling car in 2023, surpassing longtime leaders like the Toyota Corolla.
In Australia, Tesla has clearly prioritized these volume models, which continue to be available in right-hand drive configuration. This strategic focus allows Tesla to concentrate its resources on the vehicles that deliver the greatest return on investment and contribute most significantly to its mission of accelerating the world’s transition to sustainable energy.
By streamlining its product offerings in markets like Australia, Tesla can optimize its global supply chain, reduce complexity, and potentially improve overall profitability—even if it means disappointing some premium customers in the process.
Increased Competition in the Premium EV Segment
The premium electric vehicle landscape has changed dramatically since Tesla first introduced the Model S in 2012. What was once a virtually competition-free segment has become increasingly crowded, with established luxury automakers like Porsche, Audi, BMW, and Mercedes-Benz launching compelling electric offerings.
In Australia, well-heeled EV buyers now have options like the Porsche Taycan, Audi e-tron GT, BMW i7, and Mercedes-Benz EQS—all available in right-hand drive. These vehicles compete directly with Tesla’s flagship models in terms of luxury, performance, and technology, potentially reducing Tesla’s incentive to maintain a presence in this segment of the Australian market.
The competitive landscape has also expanded to include new EV-focused startups like Lucid, which has gained recognition for its Air sedan that rivals or exceeds the Model S in several key metrics. While not yet available in Australia, these new competitors add to the pressure on Tesla’s premium offerings globally.
Manufacturing Capacity Allocation
Tesla’s global manufacturing footprint has evolved significantly in recent years, with new gigafactories in Shanghai, Berlin, and Texas supplementing the original Fremont facility. However, Model S and Model X production remains concentrated in Fremont, California, creating potential bottlenecks as Tesla balances production of multiple vehicle lines.
By eliminating right-hand drive versions of the Model S and Model X, Tesla can optimize its Fremont production capacity for left-hand drive markets, potentially improving overall output and efficiency. This decision aligns with Tesla’s broader efforts to streamline operations and reduce production complexity wherever possible.
Impact on Australian Customers and Market
The cancellation of the Model S and Model X for the Australian market has had significant implications for both existing Tesla customers and the broader Australian electric vehicle landscape.
Disappointment and Frustration Among Order Holders
For the hundreds of Australians who placed deposits for the refreshed Model S and Model X, some waiting over two years, Tesla’s decision came as a major disappointment. Social media and Tesla forums have been filled with expressions of frustration from affected customers, some of whom have indicated they may switch to competing brands.
The $3,000 AUD credit offered toward a Model 3 or Model Y purchase has done little to appease many of these customers, who view these vehicles as entirely different classes of products. As one commentator noted, “That’s like offering a 1 series BMW to someone who was waiting on a 5 Series. They are very different cars.”
The situation has been particularly frustrating for those who were eager to experience the high-performance Plaid variants, which were never available in Australia in their refreshed form. With acceleration figures under 2 seconds for 0-100 km/h, the Model S Plaid represented the pinnacle of electric performance—something Australian enthusiasts will now miss out on unless they’re willing to import and convert left-hand drive models at significant expense.
Rising Used Model S and X Prices
An interesting market consequence of Tesla’s decision has been the appreciation of used Model S and Model X values in Australia. With no new inventory arriving, pre-refresh models have suddenly become collectors’ items of sorts.
According to Australian automotive websites, some used Model S listings saw price increases of up to 30% following Tesla’s announcement. For example, a 2019 Model S 100D that was priced at AU$99,999 in early April 2023 was later listed at AU$129,999 after the cancellation news broke—a AU$30,000 premium.
This trend suggests that despite Tesla’s focus on newer models, there remains significant demand for its flagship vehicles in the Australian market—demand that will now be served exclusively through the used car market.
Broader EV Market Implications
Tesla’s decision comes at a time when the Australian electric vehicle market is becoming increasingly competitive, with numerous new entrants from both established manufacturers and Chinese EV specialists like BYD and XPeng.
While Tesla continues to dominate Australian EV sales with its Model 3 and Model Y, the absence of its flagship models creates an opportunity for luxury competitors to capture the high-end market segment. Brands like Porsche, Audi, and Mercedes-Benz can now position their electric offerings as premium alternatives without direct competition from Tesla’s top models.
In the longer term, Tesla’s retreat from the premium segment in Australia could accelerate the diversification of the country’s EV market, potentially leading to a more fragmented landscape where different manufacturers dominate various price points and segments.
Future Possibilities: Will the Flagships Ever Return?
While the current situation is disappointing for Australian Tesla enthusiasts, there are several scenarios under which the Model S and Model X could potentially return to the Australian market in the future.
Potential 2025 Refresh and RHD Production
Recent statements from Tesla executives have sparked speculation about the future of the Model S and Model X globally. In February 2025, Lars Moravy, Tesla’s Vice President of Vehicle Engineering, confirmed in a podcast interview that both vehicles would receive a refresh later in 2025.
This upcoming refresh has generated renewed hope among Australian Tesla fans that right-hand drive production might resume. If the refresh involves significant architectural changes, Tesla could potentially address the engineering challenges that prevented RHD production of the current generation.
However, Tesla has made no official statements regarding the return of RHD versions, and any such development would likely depend on the economic and strategic factors that led to their cancellation in the first place.
Manufacturing Location Possibilities
One potential pathway for the return of the Model S and Model X to Australia would involve production shifting from Fremont to one of Tesla’s newer facilities, particularly Giga Shanghai, which already produces right-hand drive Model 3 and Model Y vehicles for various markets including Australia.
Manufacturing in Shanghai would potentially reduce production costs and improve the economic viability of selling these vehicles in Australia and other RHD markets. Additionally, Shanghai’s proximity to Australia would reduce shipping costs and delivery times compared to vehicles manufactured in California.
However, this scenario faces significant obstacles, including potential trade tensions and the need to transfer complex production processes from Fremont to Shanghai—a significant undertaking that Tesla may not prioritize given its focus on mass-market vehicles.
Exchange Rate and Market Size Considerations
Any return of the Model S and Model X to Australia would also depend on more favorable economic conditions, particularly regarding exchange rates. If the Australian dollar were to strengthen significantly against the US dollar, the economic equation for selling these premium vehicles in Australia could become more attractive.
Similarly, if demand for high-end electric vehicles in Australia and other RHD markets were to grow substantially, Tesla might reconsider its decision based on the increased market potential. However, these factors remain highly speculative and subject to global economic conditions beyond Tesla’s control.
Tesla’s Current Australian Focus
Despite the disappointment surrounding the Model S and Model X, Tesla continues to maintain a strong presence in the Australian market through its volume models and energy products.
Success of Model 3 and Model Y
The Model 3 and Model Y have proven extraordinarily successful in Australia, consistently ranking among the country’s best-selling electric vehicles. These models offer much of Tesla’s signature technology and performance at more accessible price points, appealing to a broader segment of the Australian market.
Tesla recently introduced the refreshed 2025 Model Y to Australia, featuring improved handling, reduced cabin noise, and enhanced efficiency. Early reviews have been overwhelmingly positive, suggesting that Tesla’s focus on these volume models is paying dividends in customer satisfaction and market performance.
With prices starting at around $60,000 AUD for the Model 3 and slightly higher for the Model Y, these vehicles represent a more accessible entry point to Tesla ownership compared to the flagship models, which would have commanded prices upwards of $200,000 AUD if available today.
Future Technology Deployments
While Australian customers may miss out on the flagship vehicles, Tesla continues to roll out its latest technology features in the market. For instance, Elon Musk recently hinted that Tesla’s Full Self-Driving (FSD) capabilities could arrive in right-hand drive markets, including Australia, by early 2025.
This deployment would represent a significant technology upgrade for Australian Tesla owners, potentially offsetting some of the disappointment regarding the flagship models. The evolution of Tesla’s software capabilities means that even the more affordable Model 3 and Model Y continue to improve over time through over-the-air updates.
A Strategic Pivot with Mixed Consequences
Tesla’s decision to cancel the Model S and Model X for the Australian market represents a strategic pivot focused on production efficiency, economic realities, and the company’s evolving global priorities. While this move has understandably disappointed Australian Tesla enthusiasts who had their hearts set on these flagship vehicles, it reflects the pragmatic business considerations of a company transitioning from a luxury niche player to a mass-market manufacturer.
The absence of these flagship models creates both challenges and opportunities in the Australian market. On one hand, Tesla loses its presence in the premium segment and disappoints some of its most loyal customers. On the other hand, the company can focus its resources on the higher-volume Model 3 and Model Y, potentially improving overall market penetration and accelerating Australia’s transition to sustainable transportation.
For Australian consumers seeking Tesla’s flagship experience, options are now limited to the used market or the possibility of importing and converting left-hand drive models at significant expense. Meanwhile, competitors in the luxury EV space have an opportunity to capture market share that might otherwise have gone to Tesla’s premium offerings.
Looking ahead, the possibility remains that Tesla could reintroduce the Model S and Model X to Australia with future refreshes or changed manufacturing approaches. However, for now, Tesla’s Australian presence will be defined by its volume models as the company continues its global mission of accelerating the world’s transition to sustainable energy—even if that means leaving some of its most impressive vehicles off Australian shores.