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Canadian pricing out... i am in tears

Canadian pricing is out:

http://ca.finance.yahoo.com/news/tesla-motors-announces-canadian-pricing...

$64,500for base 40kWh model, Model S with the 60 kWh battery pack and 85 kWh battery pack will start at $75,200 and $85,900 CAD respectively. Base will have heated seats and decor included.

I am floored, you can't imagine my deception level following that announcement. Truly have the impression of being screwed here. Huge mistake from Tesla.

GB is stating that they took a really straight forward approach: "Canadian base prices start with U.S. pricing, plus 6.1 percent for import duties and an additional 1.5 to 2 percent, depending upon the model, for incremental transportation costs and country specific business expenses. The total is then adjusted using the current mid-term currency exchange rate."

Sorry but I am very familiar with the matter and the 6.1% duty doesn't apply to cars built in the Canada-USA-Mexico as part of the Free-Trade-Agreement. Only applies to cars sold in the US for example coming from Japan. So it should have said 6.1% more margins..... And doing straigh math 65,400 - 57,400 is 14% more than the 57,400 US price. Unfair

Stopping here to dry my tears and calm down

Thanks for the clarification, mlascano.

If that is the case, the Ontario $8,500 credit is a lot better, because it comes right off of the bottom line, after taxes price at the time of purchase... no waiting for a tax refund.

Tesla is representing the US credit as a reduction to the base price on their Options and Pricing pages. If sales taxes are paid on the basis of the before-rebate price, that is a bit misleading.

While I was not thrilled by the announcement, I WAS relieved. Those of us with Roadsters paid a MUCH larger up-charge for our Canadian cars, so this is more reasonable.

I also deeply appreciate that they are being completely transparent about the pricing structure. This is not the norm in the auto industry. It is also not the norm for the VP of Sales to step into a discussion like this and calm the waters.

Still, it is temping to drop down to general production from Signature. If I liked the shade of green better, or if Sunset Red was not held back, it would be an easy choice. As it is, we may be paying more that that import duty just for the satisfaction of the gorgeous Signature Red, and for getting our car maybe a few weeks earlier.

We are about to have an election in Quebec. It looks like Jean Charest is going to loose. The $8000 rebate was part of Jean Charest's Plan Nord. We can safely assume the rebate to end after September 4, 2012.

Stephen K, don't want to do any politics here but wait until after September 4th to speculate on this. I believe all other parties have eco/Green plans.

What worries me the most is that, they say the rebate is degressive starting 2013.

2012: 5k to 8k
2013: 4.5k to 8k
2014:3k to 4k
2015: 2k to 3k

Wow it's cool to see that George responded so quickly. I hope I'm not mistaken, but it still seems like the math is a little off, but not by much (not that it matters to me as a US reservation holder):

Model          40kwh       60kWh       85kWh

US price       57.4k       67.4k       77.4k

Interior
 upgrade        1.5k        1.5k        1.5k

6.1% Duty       3.6k        4.2k        4.8k

2% other        1.2k        1.4k        1.6k

Calculated
CAN price      63.7k       74.5k       85.3k

Stated
CAN price      64.5k       75.2k       85.9k

Difference      0.8k        0.7k        0.6k

It seems like the difference between the calculation Gearge gave and the prices in teh Yahoo! article are $600 - 800. In the calculations above, I took the 6.1% and 2% of the base price + $1500. Also, I assumed that CAD = USD.

It basically seems like it's an additional 1% over what George stated.

I think for George to make the statement in that press release and respond here is good enough. I would have expected Tesla to charge a little extra (in addition to an mandatory duties, etc) to sell the car in foreign countries, and I wouldn't have expected them to give any detail about it. It's appreciated, but I don't feel like it should be their obligation.

pbrulott, I don't think it's that bad, all things considered, though I know it still sucks to be thousands more than you expected. Still, it's basically the 6.1% duty + 3% for extra expenses.

Olanmills, the 6.1% came as a surprise to me (and don't think I am the only one). The claim was that the Model S was a all american built from the ground up electric car. We couldn't expect it to be ruled non-NAFTA. Isn't that a bit ironic?

I am of the opinion that Tesla could have been a bit more creative by splitting the battery and the car so that the car value becomes NAFTA. just a thought

I believe Brian H said it: "Import Duty is only applicable to non-NAFTA vehicles and is calculated at 6.1%. NAFTA cars are vehicles that have been manufactured or have been assembled in Canada, the US or Mexico with a minimum of 55% content. A NAFTA vehicle is exempt of ANY tariffs, duties or taxes when sold in Canada, the US or Mexico."

The delay in getting Canadian pricing was already being complained about, and I bet that Tesla was trying very hard to figure out a way to avoid that 6.1% hit on the affordability already. Possibly causing the delay...

Maybe next year. =( Maybe not. I'm sure if they could source products for the same price (or cheaper) in the NAFTA area, they would. If for no other reason than to take transportation costs further out of the equation.

So now isn't Tesla in the same position as Fisker? If I understand correctly, Fisker lost the ability to draw on their government funding because their product didn't qualify as U.S. made. The Model S likewise does not qualify. So will Tesla lose access to the remainder of their loan?

Frankly, I can't (don't) believe that the Model S couldn't qualify. The problem is that it's nothing to Tesla one way or the other -- the duty cost is just a pass through. They don't really have an incentive to spend a lot of resources crunching numbers and running through the complex accumulation rules and processes specified under the treaty.

However, if the government decides to treat Tesla as it did Fisker the calculations might change quickly.

I can't see how it doesn't qualify either. How can the Model S (assembled almost entirely in California by a US company) be placed in the same category as the Karma (built in Finland by a contract manufacturer)?

I'm taking a huge shot in the dark here, but I'm guessing the thousands of Panasonic-made battery cells are the main culprit.

vouteb, this is the best I could come up with so far, and it is still valid in the light of what GB said now:
http://www.teslamotors.com/en_CA/forum/forums/incentives-verg%C3%BCnstig...

Sorry, it's in German, but I guess you can read the numbers just fine. ;-) If you want to go into more depth on this issue, may I suggest you open a separate thread.

Also, I assumed that CAD = USD. (olanmills)

That's where your calculation deviates from George's:

Then convert this total using a mid-term currency conversion rate (GB)

He is not explicit in which conversion rate Tesla assumes, but it is only reasonable and fair to have some small buffer there. Otherwise, Tesla's prices would have to float with the currency (on a daily basis?), something which is hard to explain if not irritating to the average Canadian buyer.

I'm taking a huge shot in the dark here, but I'm guessing the thousands of Panasonic-made battery cells are the main culprit. (NotTarts)

Actually, it isn't as dark as you think. GB more or less confirmed that it's the batteries that weigh in (quite literally) too much:

Yeah, I remember the sticker somewhere that said 55% US/Cdn(?) content. But the battery is too much of the mix, maybe. (Brian H)

Brian H, you are correct. (GB)

This isn't as explicit as it could be, but I think it is legitimate to take this as a hint. Since the battery is like a third or so of the entire car, in terms of weight as well as in terms of cost, there probably isn't much wiggle room left to make up for the "non-American content" with some winter package or the like...

@HaroldS - "If I understand correctly, Fisker lost the ability to draw on their government funding because their product didn't qualify as U.S. made."

Fisker lost the ability to draw on their loan because they did not meet certain (secret) milestones they agreed to, and were not able to renegotiate the terms of the loan.

Fisker and Valmet announced the Karma would be built in Finland in November, 2008.

Fisker announced they were seeking a DoE loan in March, 2009 and obtained the loan in September, 2009.

How far from the percentage the car is? Can't you find a way to add "Winter option" or anything made in america that will bring the car over the required limit. I'd rather pay 6 % more to get made in USA options (that can cover our special needs for winter for example), than paying am import tax. (toto_48313)

You're very much in the same boat as Tesla in this case: They certainly would rather book those 6.1% as a contribution to their business volume, than seeing it as a part of the price that they have to charge without getting anything from it (except the heat that dissipates from this thread).

My conclusion is, as mentioned above, that there is not enough wiggle room for a solution like that. The battery is just way too heavy in every regard.

volker.berlin:

Herzlichen Dank!

I just hope that if I apply the euro 71k into Pound sterling, the guessestimate holds.

Thanks!

@Volker.Berlin - I'd say that's another argument for selling the car but leasing the battery. Unfortunately, CARB regulations for ZEV credits do not work that way, and that is a big deal for TM.

My sympathies to any Canadian buyers for whom this is a dealbreaker. I think many of us have experienced some revelation about the limits, changes or unexpected costs of the Model S over the years and have some idea of how you're feeling. I hope Tesla will be able to avoid this in future releases.

I expect Gen III will have a different ratio, and even the Model X may have a slightly larger percentage of weight/cost in the body than the battery pack when compared to the initial Model S release. In fact, even the Model S' ratio will change over time as batteries become lighter and less expensive per kWh.

For that matter, Tesla could very easily produce Canadian battery packs and swap them even on rolling stock as orders are fulfilled, given the modular nature of the design. While it would be a major change for Tesla to start using A123 cells, for example, it could be done with a pack that has the same format, but different parts inside. The additional cost for the packs might actually end up being more than the cost of the import duty, given the different chemistry and quantities, but there might be other factors (A123 claims their nanophosphate cells offer 20% greater power at low temperatures, for example).

vouteb, you're welcome. Mind you that the 71k Euro estimate includes German VAT (19%). You should probably use the 59k Euro estimate, convert that to your currency, and then apply your VAT.

Or even better: Use the same idea to find the "Tesla factor" for your country, and go from there. E.g., the Roadster is $109,000 (€79.500) in the USA and €84.000 ($115,000) in Germany, which leads me to suggest a .77 "Tesla factor" for Germany (including currency conversion).

My "Tesla factor" is a black box number that absorbes all duty, taxes, shipping, fees and assumed currency conversion rates that I don't know of in detail, but excludes VAT.

(Disclaimer: All numbers are pure speculation.)

volker berlin:

The UK Bad news: Typical price Roadster

£101,900

This is mostly a dealbreaker for me. As you add every percentages (sale taxes, SAAQ luxury tax, ...) it's just too far from the stated 50,000$ price tag in the states.

I'll have to pull the plug and watch other ride their model S. We'll see again with the bluestar.

In Australia, the roadster runs at $210000.00!!!!!!
I am waiting with great trepidation to see what penalty right hand drivers will have to pay, and, whether Tesla can get inventive to beat the Australian luxury car tax that will account for much of the price. Perhaps the car can be sold and delivered without a battery, with the battery being sold/leased as a separate item/ invoice.? That way, the cost of the car will fall below the the luxury tax threshold, and so will the battery. This would make a huge difference to the overall cost, despite the fact that we also have 10% GST. At least half the cost of a car here goes to the government. The Leaf costs $50000.00 for example. A truly ridiculous price for a small commuter runabout. A Toyota Yaris runs at around $22000.00!!!

@gfaubert - I totally agree with you. This is a dealbreaker for me too. Later today I'll make a request to get back my deposit. =(

I'll simply wait for bluestar which will hopefully have more north-american components....

WattTheHell
Canadian P39

Since Tesla will be one of Panasonic battery largest customers (after Apple, of course), perhaps they could apply some pressure on Panasonic to open a plant in the US to make at least half of the batteries they need.

Whoa. I'm just impressed that GBlankenship chimed in and cleared this thing up so fast. Pricing aside, this is the kind of company that I want to be doing business with.

btw - I just went through a kitchen renovation and my general contractor didn't respond to my concerns so quickly.

Thanks George.

@WattTheHell : I asked my deposit back today. I say if enough canadian tesla customers withdraw their reservation, they'll have to do something quick. It won't be profitable otherwise.

As if a bunch of people would ask for their deposit back! Just because of the import duty.
Even if they did Tesla wouldn't react. They don't control the import duty. Also Canada is a drop in the bucket compared to the rest of the world. We're lucky to get 200 signatures which is 20% of the American total when we only have 10% of the population.
An approximate 8% increase over the US is way better than the spread most other Canadian vehicles have compared to the US. We all knew the US pricing and expected some form of increase.
If you really want a Tesla there are ways to afford the increase. Longer term financing, leasing etc.

Any word on Signature pricing in Canada? I am assuming that the only cars we will see in Canada this year will be that series as they are first out of the gate.

Pricing is there for ALL model variants:

http://www.teslamotors.com/en_CA/models/options

I suggest that any Canadian model S reservation owner send a letter to Stephen Harper asking to reduce the 6.1% duty to 1.6% duty on "green" product (or provide a federal tax credit for green car on the top of Provincial ones).
If anyone wants to prepare a template, we can even share it.

I don't know what is the required % to be duty free under Nafta, but the Model is tag with 55% made in north America.
I beleive that at a point of time, Toyota may be able to import the electric Rav4 under Nafta rules as it as "tesla part" in it...
That will be unbelievable!

I say if enough canadian tesla customers withdraw their reservation, they'll have to do something quick. It won't be profitable otherwise. (gfaubert)

It's absolutely understandable and fair enough that you withdraw your reservation. That's everybody's own business, and it's a fully refundable reservation after all. Nothing wrong with that, normal business.

But suggesting that others should withdraw their reservation, too, as a measure to influence Tesla's business, is silly and naive. Firstly, it's everybody's own business to decide whether they want to follow through with the reservation or not, and many factors play a role in that decision. And secondly, at 20k to 30k units per year world wide, Tesla has no problem whatsoever selling every single car as soon as it is produced for the foreseeable future.


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