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Canadian pricing out... i am in tears

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

stephen.kamichik | August 15, 2012

We should send George Blakenship emails if we are unhappy. His email address is: gblankenship@teslamotors.com.

pbrulott | August 15, 2012

I am more than unhappy, I feel totally betrayed and that Tesla is not serious with his business in Canada. Proof is GB's statement about the 6.1% duty => doesn't seem to know what he is talking about. And if my math is correct, 64,500 vs 57,400 is 14% not 6.1 + 2% as he mentioned. ok there is leather included but that is still 11% more.

My model and trim is TMS 60kWh with pano + leather + blue paint and tech pack + delivery. US price for this is $75.9K and Canadian price is $83.6K + tx which is 15% here in Quebec. That makes a huge difference to my business case.

Options are also more expensive, again for no reason

Volker.Berlin | August 15, 2012

Wait for European pricing to be announced. Knowing that someone else is in an even worse situation than you are will offer some comfort and help dry your tears.

Volker.Berlin | August 15, 2012

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." (pbrulott)

Where did you find this?

pbrulott | August 15, 2012

Thanks Volker.Berlin

Found it in the link below. thought I had posted it in my original post. sorry

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

sean | August 15, 2012

Really? Why would you feel betrayed by Tesla over import duties that are not under their control but rather charged by the government? While I also don't like having to pay 6.1% above US pricing and think that it sucks that we have to pay duty on a US-built car, I'm not blaming Tesla. If I had to guess, I'd say that the duty is charged based on the weight of parts and thus the Japanese battery components put it over the limit for foreign content.

Compared to other manufacturers who charge well above US prices despite the exchange rate, Tesla appears to have very little markup. I suggest complaining to the correct authority when it comes to duty, not Tesla who is subject to Canadian law.

The insurance numbers for Canada are *excellent* and while the duty issue is perhaps a surprise to some, the cost difference is in line with other manufacturers and better than many.

dborn @nsw.au | August 15, 2012

Wait for Australian pricing. It will probably be double the USA price, AND our dollar is stronger than the greenback. All other vehicles we get follow this formula, regrettably. Not much relief tax wise for EV either.

Michael23 | August 15, 2012

When I lived in Vancouver everything was way more expensive so I pretty much expected this. Even shoes were twice the price.

Brian H | August 15, 2012

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

Need Panasonic to throw up a branch plant in Mexico!

Brian H | August 15, 2012

Looks like the duty and hot leather total $7K pretty much across the board.

Seems to me Ford and GM have closed plants in the Oakville area in the last few years. Maybe ...

dudedog1 | August 15, 2012

Hi everyone. There seems to be a bit of confusion surrounding this issue.

Brian H, you are correct.

pbrulott, unfortunately, all cars manufactured in North America cannot be imported into Canada duty free. In order to be duty free, a minimum percentage of the car must be made in North America. Model S falls slightly below that percentage, so our cars cannot be brought into Canada duty free. We must pay the 6.1% import duty. We do not have a choice. That is the only reason why we are including it in our pricing.

I hope this helps make things a little clearer regarding the 6.1%.

Regarding the overall math, here's how we see the build up:
US Base price
+ $1,500 USD for interior upgrade
+ 6.1% duty
+ 1.5% to 2% for incremental transportation and business costs
Then convert this total using a mid-term currency conversion rate

That's the way we did it.

pbrulott...Thanks for starting this thread. Hopefully it is now clear.

Volker.Berlin | August 15, 2012

Found it in the link below. thought I had posted it in my original post. sorry (pbrulott)

Yes you had. My fault. Thank you anyway. And congrats for being the first to get a reply directly from GB on these forums!

pbrulott | August 15, 2012

Thanks for the quick answer/post and the math is pretty clear.

Obviously I didn't know about that US/Canada/Mexico part threshold Model S doesn't meet and didn't plan for the 6.1% premium.

Model S is an expensive car, way more money than I would have put on any ICE. $7,500 (price differencial for my model/trim) + 15% sales tax in Quebec is, you would imagine, a huge bite to swallow.

Patrick

jkirkebo | August 15, 2012

Can we then assume EU prices around the same as Canada ? We have no 6.1% import tax in Norway, but shipping is probably more expensive and also the chargers will be if 3-phase is standard and not an option. I assume we will get the same mandatory interior upgrade with heated seats only since it can get quite cold here too. The perf.package should then be cheaper by $1500 I think ?

stephen.kamichik | August 15, 2012

I am still getting the model S. I was considering the studio sound package and the tech package. At these prices I can live without these packages. I plan on getting the active air suspension and the 85kWh battery pack. At these prices I hope that (as Elon said) the model S will be the only car that I will ever need.

arnebjarne | August 15, 2012

One positive thing about living in Norway is that one is used to a totally outrageous tax level. The ICEs in Norway are priced just unbelievably high. As an example: A base model of BMW 520 DA with 184 HP you must part with 559 000 NOK. 1 US$ equals 5,94 NOK: 94100 USD for one of those babies. If I can get a Tesla S 85kWh perfomance with the extras for 130 000 USD I am happy. More so - grinning all the way to the nearest bank.

Jgdixon | August 15, 2012

I have just done the math.
It works out exactly as George said. They are being very transparent here.
It's a lot of money but we knew it would be more.
They don't make the rules for Canadian import duty.

Bradtc | August 15, 2012

Wow! I guess there goes my 60kWh battery and here comes my 40kWh battery. That is really too bad. I was hoping closer to par, but after seeing the math I guess I wasn't' aware about that 6.1% being an issue as I thought it would qualify for NAFTA. Leather isn't something I was going to go for either. Sigh... I can only hope that the Vancouver service centre will open shortly after the Toronto one - I have seen some advertisements for job opening there. If that doesn't happen, that will be the breaking point for me.

Jgdixon | August 15, 2012

Is there an extra delivery charge?
I haven't seen that noted anywhere>

pbrulott | August 15, 2012

Thanks Volker. I find GB live post really helpfull like in the "visor light and rear light issue" that ended up being a non-issue.

I might drop options like you Stephen K but really like the keyless entry. Still unsure about the headlights but seems like a nice upgrade. However, with a car at that price, it would unfornate not to have options like keyless, nav, Power rear liftgate, homelink...

pbrulott | August 15, 2012

@Jgdixon@cogeco.ca

I did plan for a more expensive delivery charge ($1,500) than the US one which is usually the norm for car makers. but this is pure speculation at this point.

webpicasso | August 15, 2012

While I'm not thrilled about the difference, I'm happy it's not worse.

Also, in Ontario we get $8500 back which is $1000 more that in the U.S. so that helps a bit.

The Froq | August 15, 2012

Hi George,

Just a simple post of you and everyone is back on track. Please try to keep us informed as much as possible.

Have fun after you're delivery of your Model S this week.

mknox | August 15, 2012

The $8,500 Ontario rebate is after taxes whereas the US $7,500 credit is off of the base price. They work out to roughly the same thing.

mlascano | August 15, 2012

mknox, is the US we are taxed off the gross value of the car (i.e. the full price not substracting the $7500). The $7500 tax credit is something we will obtain either when we file our taxes for 2012 or by adjusting our deductions on our current paychecks.

So the Ontario $8500 tax credit, if it works in a similar way to the US Federal tax credit, is cetainly better.

mlascano | August 15, 2012

typo: "... in the US..."

pbrulott | August 15, 2012

In Quebec, the rebate is $8000 after taxes and we pay SAAQ 1% luxury tax.

75,400
+ 15% tx
= $86,700
less $8,000 rebate
= 78,700
+ 1% luxury tax (over 40K)
= 79,200

EdG | August 15, 2012

It would really make things interesting if the percentage North American made the cut to avoid the 6.1% with the 40kWh battery, but not with more battery cells. This assumes the battery part count/value is throwing things over the edge.

vouteb | August 15, 2012

volker.berlin:

On the basis of the Canadian info can we compute an estimated price for europe (or the UK)?

GB?

toto_48313 | August 15, 2012

@George:
You stated: " Model S falls slightly below that percentage, so our cars cannot be brought into Canada duty free. We must pay the 6.1% import duty."
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.

Looking for the performance, you arrive a 100,400$. I'm not a maketing expert, but for sure putting it as 99,900 would have been much more smarter... or at least just a little bit less scary.

As I'm expecting to buy a performance... I'll more likely downgrade from sig to general production to be under the 110,000 budget I was planning.

mknox | August 15, 2012

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.

VincentA | August 15, 2012

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.

stephen.kamichik | August 15, 2012

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.

pbrulott | August 15, 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

olanmills | August 15, 2012

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.

olanmills | August 15, 2012

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.

pbrulott | August 15, 2012

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."

Jason S | August 15, 2012

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.

HaroldS | August 15, 2012

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.

NotTarts | August 16, 2012

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.

Volker.Berlin | August 16, 2012

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.

Volker.Berlin | August 16, 2012

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.

Volker.Berlin | August 16, 2012

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...

Nick Kordich | August 16, 2012

@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.

Volker.Berlin | August 16, 2012

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.

vouteb | August 16, 2012

volker.berlin:

Herzlichen Dank!

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

Thanks!

Nick Kordich | August 16, 2012

@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).

Volker.Berlin | August 16, 2012

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.)

vouteb | August 16, 2012

volker berlin:

The UK Bad news: Typical price Roadster

£101,900

gfaubert | August 16, 2012

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.

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