A Tale of Two Markets: Traditional Car Sales vs. Tesla Sales in Australia.

A Tale of Two Markets: Traditional Car Sales vs. Tesla Sales in Australia (Mid-2024 to March 2025)

The Australian automotive landscape has undergone significant shifts in recent years, with traditional internal combustion engine (ICE) vehicles facing increasing competition from electric vehicles (EVs).

Among EV manufacturers, Tesla has long been a dominant player, but its performance from mid-2024 to March 2025 tells a different story compared to the broader traditional car market.

This weeks blog article explores how traditional car sales and Tesla’s sales have fared in Australia over this period, highlighting key trends, challenges, and what they mean for the future of mobility in Australia in 2025 and beyond.

Traditional Car Sales: A Resilient Market with Hybrid Momentum

From mid-2024 to March 2025, the traditional car market in Australia—comprising petrol, diesel, hybrid, and plug-in hybrid electric vehicles (PHEVs)—has shown resilience despite economic headwinds.

According to data from the Federal Chamber of Automotive Industries (FCAI), new vehicle sales in 2024 reached a record 1,237,287 units, a modest 1.7% increase over 2023.

This growth was driven largely by improved supply chains, the clearing of backlogged orders, and a surge in demand for hybrid and PHEV models.

Hybrids, in particular, have been a standout performer. Sales of petrol-electric hybrids soared by 75% in 2024, totaling 172,696 vehicles, nearly double the number of battery electric vehicles (BEVs) sold. PHEVs also doubled, reaching 23,163 units.

Toyota, the market leader with 241,296 sales in 2024, capitalized on this trend, with nearly half of its deliveries being hybrids.

Models like the Toyota RAV4 (58,718 units, up 98.2%) and Corolla (24,027 units, up 20.2%) underscored the appetite for fuel-efficient alternatives amid high fuel prices and economic uncertainty.

However, the momentum slowed in early 2025. January and February 2025 saw a year-to-date decline of 5.4% compared to the same period in 2024, with deliveries dropping for the second consecutive month.

Utes, a staple of the Australian market, remained popular (229,219 sold in 2024), led by the Ford Ranger, but even this segment saw softening demand in early 2025. Analysts attribute this to high interest rates—despite a Reserve Bank of Australia rate cut in late 2024—and a return to pre-COVID demand levels.

Despite the dip, traditional car sales have held steady, buoyed by diverse offerings and the growing popularity of electrified options short of full EVs.

Tesla Sales: A Sharp Decline from Dominance

In contrast, Tesla’s journey from mid-2024 to March 2025 in Australia has been one of significant decline. After a record-breaking 2023 with 46,116 deliveries, Tesla’s sales began to falter in 2024, ending the year at 38,347 units—a 16.9% drop.

This downward trend accelerated into 2025, with the company recording its worst performance in years.

In 2024, Tesla faced declines in nine out of twelve months, with the Model Y (21,253 units, down 26.1%) bearing the brunt of the slump, despite remaining Australia’s top-selling EV.

The Model 3 Highland, refreshed at the end of 2023 and deliveries in to Australia in early 2024, held up better with 17,094 deliveries (down just 1.5%), but it couldn’t offset the broader downturn the the purely electric car brand. 

December 2024 offered a brief reprieve, with 3,593 vehicles delivered (up 63.9% from December 2023), but this was an anomaly in an otherwise bleak year for Teslas sales.

The slide continued into 2025. January saw just 739 deliveries (down 33.2% from January 2024), the lowest since July 2022, when COVID disruptions limited sales to a mere four units.

February was even worse, with 1,592 deliveries representing a 71.9% drop from February 2024’s 5,665 units.

Model 3 Highland sales plummeted 81.4% to 668 units, while the older Model Y model saw sales fall by 55.4% to 924 units.

Year-to-date through February 2025, Tesla delivered only 2,331 vehicles, a 65.5% decline from 6,772 in the same period of 2024.

Several factors contributed to Tesla’s struggles.

Aggressive price cuts—up to $9,500 on the Model Y and $7,000 on the Model 3 in early 2024—failed to reignite demand. Competition from affordable Chinese EVs like the BYD Atto 3 and MG4, which saw sales growth in 2024, eroded Tesla’s market share.

Additionally, the anticipation of an updated Model Y “Juniper” (due May 2025 for the Launch version and June 2025 for the RWD standard version) most likely has delayed purchases.

Beyond market dynamics, CEO Elon Musk’s polarizing political involvement—supporting far-right causes and aligning with U.S. President Donald Trump—has been cited by analysts and consumers as a reputational drag, with some owners selling their Teslas or distancing themselves or showing caution.

While not so visible as in protests and vandalism that has been seen overseas however there is damage to the Tesla brand and calls for him to resign as CEO of Tesla.

Comparing the Trends: Stability vs. Volatility

The contrast between traditional car sales and Tesla’s performance is stark.

Traditional sales, while cooling in early 2025, have benefited from a broad portfolio of powertrains and brands. Hybrids and PHEVs have filled a gap for consumers wary of full EVs due to range anxiety, charging infrastructure concerns, or higher upfront costs.

Toyota’s dominance, alongside strong performances from Ford (100,000+ sales in 2024) and emerging Chinese brands like BYD (20,458 sales, up 64.5%), reflects a market adapting to diverse needs.BYD has a greater selection cars available although not all are pure electric.

So to compare Apples to Apples is not as it seems.

Tesla, however, has faced a perfect storm of challenges. Its reliance on just two models—Model Y and Model 3—limits its flexibility compared to traditional manufacturers with dozens of offerings.

While EVs as a category grew 4.7% in 2024 to 91,292 units (7.4% market share), Tesla’s share of that pie shrank from over 50% to 42%, as competitors like BYD (14,260 EV sales) and MG (8,239 EV sales) gained ground.

The company’s sales volatility—peaking and troughing with delivery cycles and external controversies—stands in contrast to the steadier trajectory of the traditional market.

What Lies Ahead?

For traditional car sales, 2025 is shaping up as a year of cautious optimism. Industry forecasts suggest a drop to around 1.15-1.17 million sales, aligning with pre-COVID norms, but new models like the BYD Shark 6 PHEV ute and refreshed Toyota RAV4 could sustain interest in hybrids and PHEVs.

The arrival of more Chinese brands—Geely, Leapmotor, Xpeng Chery and others—will further intensify competition.

Tesla’s outlook is less certain. The Model Y Juniper, launching in May 2025, and the potential introduction of a compact Model Q (2)could provide a much-needed boost.

Globally, Musk predicts a 20-30% sales increase in 2025, driven by more affordable models. 

However, in Australia, rebuilding consumer trust amid reputational challenges and staving off cheaper rivals will be critical.

Early 2025 data suggests a tough road ahead, with Tesla’s 2,331 deliveries through February dwarfed by the traditional market’s broader resilience.

Conclusion

From mid-2024 to March 2025, Australia’s car market has revealed two distinct narratives.

Traditional sales have leaned on hybrids and a wide range of options to maintain stability, even as growth slows.

Tesla, once the EV trailblazer, has stumbled, grappling with declining demand, competition, and external pressures. As the automotive industry evolves, this period underscores a broader truth: adaptability and diversity may trump singular dominance in an increasingly complex market.

For Australian buyers, the choice between tradition and Tesla has never been more nuanced—or more telling of the times with a very uncertain future with so many tarriff, political and conflict issues around the world today.