Tesla has been dealt a particularly bad hand in its latest Australian flop. Based on a May report from independent market research firm Roy Morgan, it has fallen into the top ten most distrusted brands in the country. Perhaps no other indicator reflects this uncertainty more than consumer confidence, which is sinking fast. At the same time, the company’s home battery division is experiencing sea changes in market forces. While Tesla’s battery storage revenue saw a remarkable five-fold increase in 2024, reaching $2.55 billion, the company’s share of the home battery market plummeted from 20 percent to just 5 percent, as noted by energy consultancy SunWiz.
Tesla used to dominate the home battery market. These changes have caused it to drop from the first position in January to sixth by the end of July. This painful downturn raises hard questions about the real efficacy of the company’s well marketed products. It makes us ask how CEO Elon Musk’s notorious public image is impacting consumer confidence.
Declining Market Share and Consumer Distrust
Tesla’s proposed decline in market share is caused by a lack of other vehicles with adequate offerings. With the release of their newest model, the Powerwall 3, they’ve raised their prices above most competing brands, which leads to a lot of lost sales opportunities. On the downside, like its predecessor, the Powerwall 3 is only available in a single size—13.5 kilowatt-hours—or 27kWh when stacked. This singular option limits consumer flexibility significantly.
Warwick Johnston, a notable energy expert, pointed out that “Australia is currently averaging 17kWh per battery system, which doesn’t play to Tesla’s advantage.” This disconnect between the needs of consumers and what Tesla actually produced only adds to the confusion surrounding its position in the market.
Tesla’s brand perception has taken a hit. Much of this drop is thanks to Musk’s connections with some of the worst far-right political leaders from around the world. Roy Morgan reported, “Distrust in Tesla has increased rapidly over the last year as CEO Elon Musk has tied himself closely to US President Donald Trump.” This negative sentiment appears to be affecting not just car sales but home battery sales, with Rajat Roy noting that “the negative associations with Elon Musk are rubbing off on Tesla home batteries.”
Competition and Customer Expectations
Given the severity of Tesla’s troubles, rivals like CATL and LG are increasing pressure on their competitors. Competitors have quickly filled gaps, bringing a variety of new sizes and price points that serve various consumer routing needs. For anyone looking for an energy capacity lower than 13.5kWh or higher than 27kWh, Tesla does not offer a solution. This gap in available offerings may cause potential customers to seek out alternatives that meet their needs.
She illustrated how crucial brand trust has become with her example. This is especially the case when consumers are spending hundreds of dollars on products like batteries. “If something is costing you $10,000, you want a warranty and some trust in the brand being there to service your needs,” she stated. This attitude seems to be pushing customers to Ford and Rivian who are looking for something more dependable in a rapidly changing EV landscape.
As other companies begin to catch up, Australian battery maker Energy Renaissance CEO Brian Craigshead questioned Musk’s timing. “His brand destruction is happening just as the market has opened up,” he said, emphasizing how Tesla’s brand challenges come at a critical juncture for the industry.
Future Outlook and Sales Recovery
Amid the uncertainty, there are indications that Tesla’s sales may be on the verge of rebounding again according to one analysis. In the second quarter, the firm’s EV sales in Australia saw a modest bump due to an electric vehicle rebound. This came on the heels of a shocking 60 percent drop in Q1 over the same quarter in 2024. That’s a positive rebound and an indication that consumers are still hungry for Tesla products. We’ll see if this excitement translates into consistent battery sales.
Furthermore, expectations for future installations remain optimistic. Warwick Johnston mentioned that “in 10 weeks, we’ll have installed as many batteries as last year.” The arc of this projection demonstrates that Tesla’s market share has fallen off a cliff. Yet despite this misstep, the company has significant upside potential if it’s able to assuage consumers’ worries and pivot its product focus.
