Why Tesla Semi Is Unlikely To Make Inroads To Australia

Tesla Inc’s Semi trucks may not find their way into the Australian market unless the country's government makes regulatory changes including new design rules that ensure a Semi can ply on those roads, according to the electric vehicle maker’s comments submitted to the country’s National Transport Commission.

What Happened:Elon Musk-led Tesla submitted comments to a regulatory review process initiated by the country's National Transport Commission in 2020 but made public now. According to the documents, Tesla has urged the commission and the local governments to initiate urgent changes to the Australian Design Rules to bring early electric vehicles to market.

As of current Australian rules, vehicles wider than 2.5 meters are not allowed to ply on local roads. The Tesla Semi is up to two inches wider than the current regulations allow.

“The Tesla Semi is 2534mm wide. The US allows 2600mm heavy vehicles and the EU 2550mm. The Commission will be aware that given Australia’s small size in comparison to global markets, inconsistencies like this between Australian regulations and larger markets will delay or preclude vehicles coming to local markets,” Tesla’s public policy manager for Australia and New Zealand, Sam McLean wrote in the submission.

According to McLean, Australia has comparatively lagged in the electric vehicle adoption of the passenger and light commercial sectors and could avoid that for heavy vehicles if it identifies and clears the barriers to electrification.

Musk first unveiled its all-electric semi-truck in November of 2017. CEO Elon Musk promised two versions, one with 300 miles of range and another with 500 miles of range, both measured at full load.

Already two years behind schedule, Tesla had in its earnings update in January said that Semi deliveries will begin by the end of 2021.

The public comment period on the proposed changes to allow wider vehicles on local roads closed last year and the NTC plans to reveal its final recommendations this coming May.

Why It Matters:While the Australian auto market is smaller when compared with other global markets, design and regulation inconsistencies across different regions will delay vehicles coming to local markets and slow de-carbonization.

Price Action:Shares of the electric vehicle maker closed 1.2% lower at $662.16 on Tuesday.