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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

jeeps17 | 17 settembre 2012

RobertMontreal,

If you read the latest Tesla blog post on service plans (the one that started the firestorm of comments), Montreal is mentionned as one of the upcoming service centers.

pbrulott | 17 settembre 2012

VanSingh

No response on my note to the PM

RobertMontreal

On the Tesla Motors home page, look under Buy/Service Approach and see the map with the announcement of a March 31st opening. they don't say exactly where in Montreal but at least the closest Service Center will not be Toronto or New York.

Question to all from Quebec, with a Service center in Montreal, will we be able to get the $8K government EV incentive when we pay for the car vs having to ask for a reimbursement from the gov. after full payment.

pbrulott | 17 settembre 2012

sorry March 1st not 31st

RobertMontreal | 17 settembre 2012

@pbrulott,

Good question on the reimbursement. That will be up to Tesla if they setup the program with the government. For other EVs and hybrids, it's up to the dealership to simply subtract the amount from the sale price of the car. Don't know if Tesla will do that. Similarly for the wall charger which also has a reimbursement program with the Quebec gov't.

I spoke to Hans today and he confirmed the Montreal service center opening in March and also mentioned that we should be getting a test drive event sometime in October here in Montreal. Woohoo!!

Rob

jeeps17 | 18 settembre 2012

Pbrulott,
RobertMontreal,

The $8K Quebec rebate is mentioned on the pricing tag of the design studio (on the canadian version of the site), the fact that there is a service center in Montreal should not affect it at all, it is not a dealership. The amount is supposed to be deducted from the price at purchase,it is not a tax credit to claim at the end of the year.

WRT the credit for a recharging station, the provincial program has specific criteria that must be met to qualify, and I am not sure if the Tesla HPWC meets them (or for that matter a NEMA 14-50 plug). I have been meaning to inquire, but never have the time to get around to it....

Woohoo indeed for mtl test drives, in the snow!, well maybe...

pbrulott | 23 settembre 2012

Rob

Very good news for the ride in October. Going on vacation for a couple of weeks. hopefully i get a nice suprise email when I'am back.

jeeps17

I'm not saying the Service center will change anything to getting the rebate or not. I was told by a gentleman from Ressources Naturelles Québec that if there are no dealer in the province then we have to pay the full price and ask for a reimbursment afterwards.

RobertMontreal | 10 dicembre 2012

I heard back from the Canadian government today and looks like they won't budge from their position with the duty. Here is the extract from the email I got back from the minister of international trade:

"The Office of Prime Minister Stephen Harper forwarded to me your email
of September 4, 2012, in which you express concerns regarding the 6.1%
duty applied to Tesla electric sedans being imported into Canada.

Most trade in North America is governed by the North American Free Trade
Agreement (NAFTA), which has led to the elimination of barriers to trade
and facilitated cross-border movement of goods and services between
Canada, Mexico and the United States. The duty on Tesla electric sedans
is determined by the NAFTA rules of origin, which were extensively
negotiated, are designed with the interests of all Canadians in mind and
meant to balance the interests of producers and consumers. Rules of
origin ensure that NAFTA's benefits are not extended to goods exported
from non-NAFTA countries that have not undergone substantial processing
in North America.

The Government of Canada is committed to protecting the health and
environment of Canadians. We have passed a series of measures to reduce
emissions from vehicles and engines addressing both air pollutant and
greenhouse gas emissions. The emissions standards in place provide
regulatory incentives to the manufacturers and importers of vehicles
equipped with plug-in hybrid and all electric technology. As a result of
the regulations, it is anticipated that the market penetration of hybrid
and electric vehicles will increase.

Thank you for taking the time to outline your concerns. I invite you to
find more information on the NAFTA rules of origin on the Foreign
Affairs and International Trade Canada website at
http://www.international.gc.ca."

Jewsh | 10 dicembre 2012

Got the same email. Although this wasn't totally unexpected it is truly heinous. There is no way to take advantage of NAFTA with a vehicle of this design type. (IE - BEV.)

Despite the vehicle being labelled as "North American", apparently it doesn't qualify. Sigh.

RobertMontreal | 10 dicembre 2012

My question is, do cars that are manufactured by Ford and Chrysler in the US qualify for NAFTA and not have duty? Guaranteed those cars have parts that originate from China/Japan...

gregv64 | 10 dicembre 2012

@RobertMontreal - it's the percentage of parts by cost that counts. Easy for normal car manufacturers to make sure that percentage is low enough to qualify. Since the batteries are such a huge part of the cost of electric cars and they are all made overseas that's what puts them over the edge.

RobertMontreal | 10 dicembre 2012

@gregv64 - and that's why they should modify NAFTA accordingly...

caolivieri | 10 dicembre 2012

- and that's why we should eliminate NAFTA and have real free trade.

mrspaghetti | 10 dicembre 2012

We could at least rename it. How about, "North American Dysfunctional Agreement [NADA]"?

tork | 10 dicembre 2012

but that's already taken up by the north american dealers.... ohhhhh I see what you did there

shop | 10 dicembre 2012

Why blame NAFTA? The Canadian govt could pass a law unilaterally reducing tariffs on electrical cars tomorrow if they wanted to. Tariffs are just another revenue source as far as governments are concerned. "The duty ... is meant to balance the interests of producers and consumers" is complete baloney. If they were honest, they would say, "The duty is the maximum that we could get away with without having a political consumer backlash."

FLsportscarenth... | 11 dicembre 2012

Couldn't Panasonic manufacture the batteries in the US or Canada? Panasonic sells enough volume here in North America... Would help cut import duties and shipping costs for them as well as help Tesla sales in Canada...

RobertMontreal | 11 dicembre 2012

I'm going to reply to that email I got from the trade minister. It definitely doesn't satisfy me.

RobertMontreal | 11 dicembre 2012

My response to the trade minister (CC'ed prime minister):

"Good morning Mr. Fast,

Thank you for your email.

Although I appreciate the fact that the Canadian government is making efforts to support vehicles which reduce CO and CO2 emissions, I believe more can be done, specifically with electric vehicles that (for now) depend on foreign manufacture for the battery cells. Tesla is an innovative company that HAS addressed the problem of emissions from the vehicle (not the plant) but they must for now rely on the manufacture of their battery cells in Japan.

Since the value of those cells is so high, it greatly skews the percentage of foreign content in the car given that the rest of the car is manufactured in the US. Even the battery "pack" itself is completely assembled in the US.

For these reasons (and I know you have received requests from other potential Tesla owners as well), I strongly believe the Tesla Model S should be exempt from the 6.1% import duty. Import duties are in place in order to protect and promote local (and US because of NAFTA) manufacture, but in this case, they hinder trade between the US and Canada for a company that has made every effort to maintain manufacturing in North America and one that has established a true "green" initiative.

I would therefore urge you to please consider making specific exceptions to NAFTA trade rules specifically for electric vehicles manufactured in the US as this is an industry we truly should support, as I feel electric vehicles are the transportation method of the future, not to mention that the car is manufactured 100% in the US with whom we are supposed to have a free trade agreement.

Respectfully,"

sagebrushnw | 11 dicembre 2012

@ RobertM

Good letter! Hope that you get a "positive" response from the Canadian government, or at least start a discussion the will lead to a positive move for Canadians.

Jewsh | 11 dicembre 2012

RobertMontreal I hope you don't mind but I used your letter to reply to the form-letter I received as well. It was very well written and thought out - nicely done.

This is complete BS. Which Canadian battery manufacturer is the government protecting?

Volker.Berlin | 11 dicembre 2012

RobertMontreal, I can't help it to note that your argument would be much more convincing if you were NOT a Tesla Model S reservation holder...

ghillair | 11 dicembre 2012

I know that it will not help the early adapters, but someone needs to make sure the Canadian Gov takes another look at the Model S with the 40 and 60kW batteries.

Since the problem is the cost of batteries is such a high percentage of the cost of the car, that percentage should drop for the smaller batteries.

pbrulott | 11 dicembre 2012

Never got a response from the PM or Ministry of Finance to my notes... glad to see you got one.

pbrulott | 11 dicembre 2012

@ ghillair good question. There were attempts at knwoing what the real numbers were but it was only speculations. No official numbers were released.

You could ask your question to the Bulletin Board in this forum

PB

Stark | 12 dicembre 2012

I wrote this to my Member of Parliament, Mike Wallace, Burlington Ontario, but have not received a response. Who else should I send a letter to?
Good morning Mr. Wallace,
I have a question regarding the North American Free Trade Agreement and the import of consumer vehicles from the United States. I’m interested in purchasing a new car from a car company called Tesla Motors. If you have not heard of this amazing car company and car (the Tesla Model S), I highly recommend you have a look (www.teslamotors.com/en_CA). The Model S is a 100% battery electric vehicle and does not burn any gasoline. The vehicle itself is 100% designed and built in the United States. Telsa bought a retired GM/Toyota factory in California where they build the Model S.
You can imagine my dismay when I noticed a large discrepancy between the U.S. and Canadian pricing, especially since the exchange rate is so close to parity. The U.S. base model is $49,900 while the Canadian is $64,500. A difference of $14,600. I contacted Tesla Motors to enquire why this was the case. Their explanation was that the Model S falls slightly below the percentage of the car that must be made in North America to qualify. This is due to the battery component (the batteries are made by Panasonic, although the actual battery pack for the vehicle is constructed in the Tesla factory). This means there is a 6.1% import duty for this vehicle.
I must admit that I find this decision to be counter the Ontario Ministry of the Environment’s plan to reduce production of greenhouse gases, Natural Resources Canada’s plan to reduce greenhouse gas emissions and smog forming pollutants, and to Ontario’s Climate Change Action Plan which states “The government's vision is for one of every 20 vehicles on our roads to be an electric vehicle by 2020”,
I am aware of the Ontario Electric Vehicle Incentive Program which lists the Tesla Model S as qualifying for an $8,500 incentive, however this incentive is supposed to support the move to electric vehicles, not to offset an import tariff (of which this only covers a part of). From the Ministry of Transportation’s web site “The intent of the electric vehicle program is to reward early adopters and make it easier for people to buy and drive electric vehicles.”
I urge you to look into this issue and propose that the Tesla Model S be exempt from any import duties. The current import duty raises the barrier of adoption for myself and many like-minded Canadian’s who look forward to a cleaner and sustainable future for our children and generations to come. Canada should be seen as a world leader in the production and consumption of green energy.
I thank you for your time and consideration. Please feel free to contact me if you have any questions or concerns, or would like to discuss in further details.
Thank you

stephen.kamichik | 12 dicembre 2012

Send a copy to Thomas Mulcair (heads of NDP) and May (head of green party) and Bob Rae (head of liberal party) and possibly to PM Stephen Harper. Great letter.

Brian H | 12 dicembre 2012

The difference you cite is 29.2%, so the import duty of 6.1% hardly is to blame for most of that. It's barely over a fifth of it.

RobertMontreal | 12 dicembre 2012

Just have to be careful with the base price comparisons.

The base price is the US is actually $57400 (Tesla often quotes $49900 but that includes the $7500 tax break).

The base price in Canada also includes the leather option of $1500 US.

So the comparable prices are $58900 vs. $64500, a difference of $5600 which is that 6.1%, a "region specific fee", and any possible exchange rate. Right now I think it should be working in our favor, but Tesla doesn't seem to be adjusting their price accordingly. (I have a bone to pick with GB about that. :))

Stark | 12 dicembre 2012

Oops, I see what I did wrong... the pricing posted on the US page includes the $7500 federal tax credit. The Canadian pricing does not include the tax credit. It should actually be $57400 for the US Base model price. The 6.1% on the non-tax credit US price is $3501.00. That seems a little more in line with the Canadian pricing (including interior upgrades etc.). I hope our polititions are as bad at math as I am! :)

Stark | 12 dicembre 2012

Thanks RobertMontreal, just saw your post after I submitted mine!

ColinBowern | 12 dicembre 2012

Not surprised to see responses from gov't officials that are full of talking points and spin.

cathy | 12 dicembre 2012

Stark, I, too wrote a letter to Mike Wallace. Here is the brief response I received just a couple of days ago:

Thank you for your e-mail. After discussing the issue with the Caucus Liaison Officer in the Finance Minister’s office, he has suggested that, due to the technical aspect of import duties, the Department officials in this area should respond to you. I am therefore forwarding your correspondence to them.
Sincerely,
Mike Wallace

I guess that is why this was followed a few days later with the same letter listed elsewhere on this thread from Mr. Fast.

Brian H | 13 dicembre 2012

Yes, the 6.1% is $3593. So hardly a deal-breaker on its own.

Stark | 13 dicembre 2012

Cathy, you got a nicer response than I did:

Thank you for your e-mail. Due to the technical nature of duties, I am forwarding it to the Department of Finance for a response.

Mike Wallace

Hopefully something can be done. Brian H, I know in the grand scheme of things it isn't that much, it's the principle that is bugging me personally. We already get taxed to death up here. Us in Ontario will also be paying 13% Goods and Services Tax (GST). So throwing another 6.1% on top of that for something that should really fall under "free trade" irks me. Of course, maybe I'm just cheap! On a sunnier note, I'm meeting with a solar company tonight to plan my solar install which will take advantage of feed in tariffs offered by the government.

FLsportscarenth... | 13 dicembre 2012

Perhaps a GST exemption for north american made (over 50% parts content, assembled in NA) plug ins would be make a good piece of legislation... It would be a tax relief and encouragement of North American manufacturers so I see no reason why a centre-right guy like PM Harper would not like it. If he took the lead on this no way NDP and Liberals could say no on a green issue like this, a real political winner. PC's seem to have more sense then their cousins to the south who lost the election miserably by not learning from Reagan or Clinton and failing to win the centre by practical smart moves like what I am suggesting. However if proposed by opposition it might die as the Left might have other programmes it wants to protect more than a common sense measure that boosts jobs AND the environment.

pasan | 20 agosto 2013

Any updates about this? I am looking at all the 3 models, and each of them have the 6.1% duty. If the Canadian government is being difficult about the current battery, I can appreciate Tesla's pricing position. My question is, is Tesla going to do something about it to make the battery "US manufactured". Or at least enough to bypass this stupid duty. Or are we Canadians too "small fry" for them to care about this market?

One would argue that for someone spending 100K on a car, what's another 6K? You'd be surprised how many of us don't want to make the leap just purely out of principal of not getting robbed by the government.

PorfirioR | 20 agosto 2013

@pasan
Sorry to jump in this thread. I have no dog in this fight but I was curious if this is another example of rules and laws that never envisioned EVs when they were created. For example, the "turn off engine" rule when driving through some military check points.

My observation is this, what if you bought a $50K ICE vehicle for Canadian use that was 100% American made but included a $20K lifetime supply of (probably foreign) gasoline? Would that affect the 6.1% tax calculation? Does that make that car 60% American made?

Some could argue that the battery is not equivalent to a gas tank and it is actually an energy source, like gas. It is a stretch, I know, but it is still not fair to treat the battery as equivalent to a gas tank. So the truth may lie somewhere in between.

The other point I was wondering is, who decides what percentage of the car is American made? Google to the rescue. It seems to me that Canadians might indeed have a bone to pick with us in the US, because it seems that we are the ones deciding what percentage of the car is US/Canadian made, according to Part 583 of the American Automobile Labeling Act (AALA): http://www.nhtsa.gov/Laws+&+Regulations/Part+583+American+Automobile+Lab...

Here is another one for a lawyer to chew on. The AALA states that the content is measured by value. It also states that "when optional equipment is offered for vehicles within the carline, the vehicle manufacturer estimates the installation rates for that equipment." The battery is an "option", right? I mean, the only battery that was "included" in the base model was the 40kwh battery. All the other sizes are optional upgrades. Therefore, can the extra $10K or $20K be computed as an installation rate and part of the American content of the vehicle? Even though the 40kwh model is not currently offered for sale, it is still part of the Model S carline.

By the way, Tesla is not even listed in the 2013 or 2014 AALA reports.

Just curious. Happy motoring.

pasan | 21 agosto 2013

@PorfirioR. Thank you - these are all great points.

Will follow up and see if something can be done about this. I suggest the other readers to do the same.

JacquesBeaudoin | 16 gennaio 2014

I am in tears as well. Why is the tesla I would like to buy is like 20K plus than the exact car in the USA.

Brian H | 17 gennaio 2014

Not NAFTA-qualified. Yet. When the battery giga-factory gets going, assuming it's in NA, that should change.

mark23 | 17 gennaio 2014

have a look at UK pricing (noting that 1GBP = 1.64USD) and tell me who should be crying... we Brits and other Europeans are really paying up for the privilege of driving the S!

wenright | 17 gennaio 2014

I bought a tesla in Canada - and I felt the price was very fair relative to the USA. The price advertised in the USA is after the reduction from electric vehicle incentives ($7500) whereas the price advertised in Canada does not have the incentives deducted. Also when you look at exchange rate, etc. it is even more fair now.

Bernard Hong | 17 gennaio 2014

The price is higher a bit compare to US models but Tesla made some compensation as Leather seats was standard when the time I placed the order on all models. Never seen one with textile in Canada.

Tanchico | 17 gennaio 2014

You need compare to other Canadian auto pricing not Tesla US. Just an example, the Avalon is about $5k less in the US.

I have one with textile in Toronto. It's just personal but I'm not fond of the feel of leather. Honestly I find the look of Tesla's textile seats much more attractive than most others manufactures.

Brian H | 17 gennaio 2014

Anyone who has fully deconstructed non-US prices has found that TM is keeping their promise to hold prices stable and add only taxes, duty, and shipping.

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