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Battery size and NAFTA

Battery size and NAFTA

Those of us in Canada are paying an additional 6.1% as an import tariff due to the S falling slightly below the percentage of the car that must be made in North America. This is due to the battery component. Just wondering if the lower number of cells used in 40 and 60 kWh packs might bring the S back into compliance with NAFTA. Any thoughts?

Brian H | January 25, 2013

Not sure it was all that "slight", but interesting thought.

gregv64 | January 25, 2013

Unfortunately, for NAFTA tariff provisions the imported content is averaged across all cars for a given model line, not each individual variation. It's averaged over 12 months, so I suppose that if Tesla sold a large number of 40's it might make a difference, but it looks like most of their orders are for 85s.

Anthony H | January 25, 2013

@gregv64
Respectfully, how do you know this? If correct, that is very enlightening.

Stark | January 26, 2013

Thanks for your insight @gregv64. I'm just angry at my government for this. I think it is crazy to pay an import duty when we have "free trade". I've already written my Member of Parliament and Prime Minster, but I don't think it will make a difference.

Brian H | January 26, 2013

Stark;
The issue is how much of the car is American-built. The imported batteries and a few other items put it below the minimum.

Sudre_ | January 26, 2013

I have been pondering if it would be cheaper if Tesla would sell the cars in Canada without the battery. (batteries sold separately)
The owner would still pick out which battery size they wanted. It would still get fully tested then removed and shipped with but not in the car to a Canadian service center where the two would get reunited.
The battery could be listed on a separate invoice. The car would not get the NAFTA tariff but the battery would.

Brian H | January 26, 2013

Sudre_;
Devious. Possibly workable.

Anthony H | January 26, 2013

Creative. :)

dtesla | January 27, 2013

I confused about the whole NAFTA thing. I though you needed > 50% USA/Canada content to avoid the Canadian import tax. My MS sticker states 55% USA/Canada content.

What am I missing?

stevenmaifert | January 27, 2013

Historically, tariffs are imposed to protect a domestic market producing a similar product from unfair foreign competition. Ask your PM and MP who in Canada is building anything like Model S.

nickjhowe | January 27, 2013

@dtesla - check out this thread http://www.teslamotors.com/forum/forums/canadian-pricing-out-i-am-tears

Somewhere in there is the explanation from George about the exact percentages and why Model S doesn't meet the required target.

Brian H | January 27, 2013

dtesla;
Currently 65%, and rising.