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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

dborn @nsw.au | August 16, 2012

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!!!

WattTheHell | August 16, 2012

@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

Teoatawki | August 16, 2012

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.

David M. | August 16, 2012

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.

gfaubert | August 16, 2012

@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.

Jgdixon | August 16, 2012

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.

CraigT | August 16, 2012

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.

VincentA | August 16, 2012

Pricing is there for ALL model variants:

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

toto_48313 | August 16, 2012

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!

Volker.Berlin | August 17, 2012

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.

Brian H | August 17, 2012

Or 3 months before (Elon's ideal). So if orders surge, so must production. If production surges, GB has to work for his salary!
;)

ItsNotAboutTheMoney | August 17, 2012

@Volker
"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..."

The irony: the more efficiently Tesla is able to manufacture their components the more foreign the car becomes.

The hope: as the cells become cheaper the car becomes more domestic.

@Nick Kordich

The parts content is the average for a "carline" (same chassis etc) so changing batteries for the Canadian market wouldn't help avoid the duty.

pbrulott | August 17, 2012

I am with toto_48313. Let's pressure our prime minister and some influencial people in the ministry of international trade and environment.

Anybody knows where to start? Who to contact?

btw, other than the battery and MB steering wheel, what else doesn't help making the cut. I have found that around 20% of cars imported from/to Can-Mexico-USA doesn't qualify to NAFTA (2006 data).

Jason S | August 17, 2012

Leather and glass could be foreign sourced as well. Many of the electronics probably come from foreign factories too.

Theresa | August 18, 2012

It wouldn't surprise me if the touchscreen panel is considered foreign as well since all the LCD material is Far East produced.

Brian H | August 18, 2012

If TM paid import on the components, charging import again is kind of a tax on a tax.

toto_48313 | August 22, 2012

Good news from George Blog :

The Canadian online pricing configurator, showing all pricing and options, went live late last week on our website. Canadian reservation holders can now start choosing their options and colours as they prepare to finalize their Model S. Later this week you’ll also be able to finalize your order online. Hint: Canadian Signature reservation holders should be on the lookout for an important email coming this week ☺

steven.maes | August 22, 2012
Brian H | August 22, 2012

About that "55%" sticker; I guess the current requirement is somewhere around 65%. So there's a ways to go to get it up there. I really think Panasonic would have to put a branch factory in N.A. to get there.

Volker.Berlin | August 22, 2012

I don't know much about North American regulations, but having followed the discussion here and elsewhere, I think you cannot compare the "55%" from the US sticker to the NAFTA requirements that have to be met to avoid the 6.1% duty. If I am not mistaken, the "55%" are based on the number of distinct parts (100 screws of the same type == 1 part) while the NAFTA requirement is based on cost (assuming the battery is 30% of the overall cost to build a Model S, then that's 30% "foreign" by those rules).

I may be wrong but in any event those fractions change massively depending on how they are calculated. You should have a close look at the details, otherwise it's just blue sky guesswork.

RobertMontreal | August 22, 2012

Since the battery is a large part of the cost and weight of the Model S, does it not make sense that the foreign content on the 85kWh model is higher than on the 60kWh model, and similarly from 60kWh to 40kWh? Could it be that the 40kWh model meets the 55% minimum duty specifications, but the higher models don't? We're talking a spread of over $20,000 in car value. The rest of the car stays exactly the same...

jerry3 | August 22, 2012

Well, there is also the German steering gear and air suspension, Italian brakes, and Chinese computer and display parts that add foreign content.

HaroldS | August 22, 2012

I remain very unhappy with Tesla's failure to attend to NAFTA considerations, because I remain convinced (without any substantive knowledge) that between Tesla and Panasonic they could have made the cut with some strategic price adjustments. Component costing is one of the bases for the determination of origin on mixed products.

We should, however, be accurate about the provisions of the treaty. The North American content requirement for cars is 62.5% under the net cost method.

For more than you will ever want to know about NAFTA, here's a link to the relevant section of the treaty:

http://www.nafta-sec-alena.org/en/view.aspx?conID=590&mtpiID=128#A403

pbrulott | August 22, 2012

+1 HaroldS

olanmills | August 22, 2012

@HaroldS and pbrulott

I had a long-ish post that supported my point, but I lost it. To summarize though, I basically disc agree.

Having the 6.1% import tax is certainly undesirable, as it does not add value for Tesla or its potential customers.

However, that undesireable factor must be weighed against whatever benefits there were to choosing the parts they did and assembling the car that they did.

Given that this is a luxury car for a niche market (20,000/year is niche) with a shortage of supply and an excess of demand, I think the potential frustration and even potential cancellations of Canadian customers would be very, very low on the list of concerns when compared to the desire to build the car with the right parts, in the right way, for the right amount of profitability.

The assertion that Tesla could have simply and easily used different parts or made "some strategic price adjustments" to avoid the import duty doesn't really have any substance unless you know private facts about Tesla's business that we don't

olanmills | August 22, 2012

Haha. "I disc agree." That's a good one.

That should say "disagree" up there.

Brian H | August 22, 2012

" olanmills | August 22, 2012 new
...
I had a long-ish post that supported my point, but I lost it. "

Lazarus Add-On. Lose nothing. Ever. Save yerself scadoodles of time an' aggervation. Promise.

brianman | August 23, 2012

r: Lazarus Add-On
It resurrects lost family members?

Brian H | August 23, 2012

No, records keystroke-by-keystroke your entries in Comment boxes, etc. So if you delete, crash, or just mis-click and lose one, it's easy to recreate it, or copy-paste it, etc. Searchable data file for old posts, if you choose to keep them longer than the default 14 min. (Site URL also saved, so you can go back exactly where any of them were being entered.) My setting is for 54 weeks.

Fortega | August 23, 2012

@Volker.Berlin
http://www.teslamotors.com/en_CA/forum/forums/incentives-verg%C3%BCnstig...

I don't have permission to see this. Can you give a small resumé?

Volker.Berlin | August 23, 2012

Fortega, I invented a country-specific "Tesla factor", and went 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 absorbs all duty, taxes, shipping, fees and assumed mid-term currency conversion rates that I don't know of in detail, but excludes VAT.

Then I applied that factor to the US pricing for the Model S and added 19% VAT to get some idea of where Tesla's pricing for Germany *might* end up.

steven.maes | August 23, 2012

Sounds logical Volker, but at this time $1 is €0.79 . I guess the factor will be a little higher ...

Volker.Berlin | August 23, 2012

steven.maes, I agree. Obviously it's all guesswork, anyway. I try to make as little assumptions as possible. Roadster prices don't need assumptions, that's hard data I have. I feel better using whatever results I get based on actual data, and knowing that I'm very likely quite a bit off, than adding a number of weak assumptions to the mix and getting to a number which suggests it might be more accurate, but actually implies a far greater margin of error.

Which is actually to say: I'm horrified of the results from taking the currency rate development into account... I'm just afraid and imploringly hope that Tesla goofs up and accidentally uses the conversion rate from 2008 when calculating the prices for Europe!

steven.maes | August 23, 2012

:-) tumbs up !

Volker.Berlin | August 23, 2012

There's also something else to consider: The €50.000-€70.000 price range for the base Model S aligns very nicely with "comparable" offerings (if you allow the term comparable here) for the E-class and 5-series. I assume that Tesla has an eye on those prices as well and I hope they take some guidance from the "competition".

MB E200 CDI: €40.000
MB E300: €52.000
MB E500: €71.000

BMW 520i: €40.000
BMW 535i: €51.000
BMW 550i: €71.000

(all prices including VAT, excluding options)

Straight Shooter | August 23, 2012

I'm sure all other Canadian prospective owners worked the numbers through like me in our trusty Excel workbooks where we have been earerly pricing out options lists.

I'm the proud owner on reservation #49 for a Signature Performance, so you know I've been on the waiting list for a VERY long time.

My car just increased from $114,777 to $127,270 which is 10.9%. Although not outrageous, it is still very disappointing.

I've heard some commenters say they will downgrade their car or deeply cut their options list to make up for the difference. The Telsa was suppose to be about no compromise.

I don't really want to remove $13k in options for a car that I'm just 89.1% happy with, which it will because things like that tend to eat away at me and bug me.

I'll be talking it over with my wife, but most likely we are walking away.

Brian H | August 23, 2012

I wonder what the net-net effect in Canada will be of the boost from pricing certainty for new buyers vs. the retro-sticker-shock for existing reservers.

RobertMontreal | August 23, 2012

I put my deposit down in April and at the time budgeted the 60kWh. But as time went by and reviews came out, I had convinced myself to get the Performance. But with the price "increase" that was recently released, I'll be downgrading to the 60kWh or walking away. Simply because I will regret not having gotten the performance. But at this price point, I really can't justify the price...

Jgdixon | August 23, 2012

Just got my Time to Build email Signature #152
Here we go!

pbrulott | August 23, 2012

@ Straight Shooter,

I ripped the tech package and potentially the Air supension to make up for the unexpected duty :-( and with 15% sales tax and 1% luxury taxe + unknown Maintenance charges and Personal Delivery fee, this baby is going way overboard for my own limits

And yes, I update my Excel based business case with the new figures

jpturf | August 23, 2012

There should be no duty on a US made car. I just called my customs broker and he confirmed it and there is even a NAFTA file on this. 6.1% is a chunk of change. Also, there is a 8k and 2k gov tax credit available on the 2010 and 2011 roadster but I did not see the Model S on the list and have advised Tesla about it.

RobertMontreal | August 23, 2012

JP,

In various provinces, the govt credit is different. In Quebec, it is not a tax credit but a straight $8000 cash refund at the time of purchase. I'm not sure how it works in other provinces. Quebec will also pay $1000 towards the installation of a EV charger at home.

I've asked my customs broker about the import duty as well and will follow up in this forum and with Tesla directly if he confirms there should be no duty on a US-made (with partial foreign components) car.

Rob

cablechewer | August 23, 2012

The Duty and job insecurity combined to cause me drop from a Sig to regular production. I am just waiting to see what my new P number will be.

brianman | August 23, 2012

@BrianH - I guess I misunderstood the scope of "Lose nothing. Ever."

LottDenn | August 24, 2012

I received my "Time to Build" email yesterday and am also very disappointed in our (Canadian) government's tax grab of the "NAFTA" duty.

We had planned on getting a Signature car, however now cannot justify the additional $10k over a P car and the duty, so now we're looking to give up our S spot.

Seems like a lot of people are doing this. Tesla Canada reps told me that was why so many S slots were coming available in the US. People are "voting with their feet" and moving to P cars.

I tried calling the 1.888.771.2505 number to talk to a rep and received a "not in sevice" automated answer. Has anyone else tried the number? I'm in BC.

bortolottom | August 26, 2012

It does not matter where the parts come from or why the 6.1% was applied or if we should petition the Canadian government to change their ruling on the import duty.
It also does not matter how well explained the prices and increases are by anyone! I do not care whether Mr. Blankenship can explain "the where's" and "the how's" behind the new prices.
It also does not have any significance in trying to justify the new prices for Canadians based on how other countries across the world will get even worse pricing!
This is what matters: When I placed my down payment 13 months ago, my out of pocket expense for the purchase of the vehicle was based on the US price with our Canadian taxes and rebate calculated in appropriately. Essentially it is like getting a quote from any other company for any other product or service.
Now. My NEW out of pocket expenses for the same purchase end up being 17.8% more!
That’s bad business.

Oh and my wife. Ha! She is so angry she doesn’t even want to hear the name Tesla spoken! Especially after our test drive, she was very impressed! So was my co-worker (my Captain) who came along for the test drive.
To say that I am appalled is an understatement. I have been looking forward to this vehicle becoming part of my life for YEARS. Now on the basis of principle alone I am never going to own a vehicle or anything else for that matter that comes from somebody who tries to wrangle nearly 18% more out of my pocket for nothing in return.
I have discussed this with everyone I work with and have had my calculations reviewed by my friends who include MBA accountants and myself (a former engineer).
I am a normal person with an average income. I try to be a good person and simply cant believe something like this would happen to me, my wife and my new family.
I am saddened to say but tomorrow I am going to the Tesla store in Toronto to tell Sarah "We need to start the down payment reimbursement process."

Mr Musk, please do something. I have been in love with your car for a long time. You are surrounded by wonderful employees. Everyone I have had the pleasure of meeting is a great person!
I want you to know that all of my family, friends and co-workers are urging me to take my money back. They all agree that these increases are not only viewed on as a financial slap in the face but more. Much more. They all see it as deception and or worse.
I truly hope that something can be done to rectify this issue. Im sure you guys at Tesla can do something. After all, like David vs Goliath you made the impossible possible and spat in the face of the worlds largest auto makers!

My Res # RN071337
Mark B

Jgdixon | August 26, 2012

You are naive to have thought that because they took your deposit that was the same for the U.S. that our price would be the same. My wife deals with clothing manufacturing and she has to deal with the Canadian duties all the time. It is a pain but it's reality. The import duty is out of Tesla's control. I'm sure they were waiting for Canadian certification before they could finalize the price the duty would be based on.
I don't know how you did your calculation but I have done it and so have others on this forum as well as the Tesla Motors Club forum, and it certainly is not the 17.8% that you quote. You should post your calculation here for us to verify. You say you don't care about the excuses about the duty etc but do you really think that Tesla should just absorb the increase? Especially for a market that won't even be 10% of the American market.
Don't get me wrong, I'm not happy with the price either but we have to face the reality of the Canadian marketplace. If getting your money back and cancelling your order makes you feel better that's fine.
I will have long forgotten my issues over pricing once I' m driving my car in a few months.

jerry3 | August 26, 2012

And it's not like the money is going to Tesla. I'd have a problem if the price plus the exchange, plus duty only came to 80% of the total Canadian price, but that's not how it is. (However, when I lived in Canada many companies did just that.)

ggr | August 26, 2012

How does a 6.1% tariff turn into an 17.8% price hike in your pocket?

Volker.Berlin | August 27, 2012

bortolottom, I understand your feelings. We have a broad consensus that the Model S should have been available 5 years earlier and for half the price. At the same time, we have an almost as broad consensus that it is much better to have a Model S now, at the price it has, than to have no Model S available at all.

Mr Musk *is* doing something about it. He is dedicating, well, you could say without much exaggeration, his *life* to creating a market for better and cheaper EVs. The Model S is part of this strategy, but only part of it. It's the second step after the Roadster. I would have loved buying a Roadster when it entered the market, but the was no use in complaining that it only had two seats (ah, and I couldn't afford it anyway ;-).

The next step is a smaller vehicle code-named "Bluestar" or "GenIII". It will be smaller and lighter than the Model S, and will target the $30,000+ price range. At the same time, the Roadster, the Model S, and the announcement of GenIII all have considerable impact on offerings from competing manufacturers. It's not unlikely that there will be some EV offering for your requirements and budget, soon. And even if that offering is from one of Tesla's competitors, it must still, to a certain degree, be credited to Tesla that such offerings are happening now.

Here's an even longer rambling addressing some very similar disappointment when Tesla revealed their US prices:
http://www.teslamotors.com/forum/forums/oct1event%E2%80%93-model-s-exter...
(Look for my post that starts with "das Leben ist kein Ponyhof", the rest of the Post is in English.)

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