European Pricing Rationale

European Pricing Rationale

According to TM press releases on European pricing "...the goal is to make the same level of profit per car no matter where it is ultimately delivered around the world".

In Denmark this translates into an entry price of 100.600 USD for a bare bone 60kWh Model S. ( including 25% VAT and 0% tax on EV). That is approx. 80.000 USD without VAT. In the US this car would be 70.000 USD without the tax incentive, right?

The car has to travel half way around the world, I have no clue what this costs. But I do know I can by a car produced in the far east, shipped to Denmark, sold by a dealer who makes a profit for a total of 15.000 USD!

But what I really cannot understand about the pricing is that the extras are also marked up considerably. The tech package is 30.100 DKK or 5.400 USD! Up almost 50% from the US price. The danish VAT accounts for the first 25%, but still! I cannot see the business rationale behind this? Tesla wants to ship cars with as little extras as possible? Not exactly best practice as I was taught at the business school...

jat | 2013年1月13日

This has been discussed in other places, but the US prices do not include any sort of tax or registration fees, as they are different in different states. So, comparing the price including VAT in Denmark to the price before taxes in the US is misleading. In addition, Tesla accepts a significant amount of currency exchange risk, so they have to pad the prices in case the exchange rates move significantly.

Regarding options, doesn't VAT apply to them as well?

gregv64 | 2013年1月13日

He took into account VAT. However, the flaw in the math is that even though one isn't charged the registration fee for an EV, Tesla is still charged a 10% import duty that is due for a foreign manufactured personal cars.

gregv64 | 2013年1月13日

Actually it looks like it could even be worse. According to the US government trade website, here are the charges:

• The European Union tariffs are in force in Denmark. They range from 5.3 to 22 percent (passenger cars- 10 percent; electric motor cars- 12.5 percent; trucks- 11- 22 percent).
• VAT: 25 percent
• Vehicle registration tax (based on price)

So even though they exempt the registration tax, they partly make up for it by charging a higher import duty.

gangawu | 2013年1月13日

Comparing to the US price, first you have to subtract the taxes, then you have to deal with the exchange rate risk.

And imagine shipping a 2.5 ton vehicle across the world in pristine condition. It isn't cheap. TM already stated, they are making the same profit rate in the US and in Europe.

bob | 2013年1月13日

The price is perfectly fair. The price for a tech Package is 3750 $. A dollar is around 5,7 danish crowns, then you have to add customs 10% on top of that you have to add tax 25%
3750 x 5,7
21.375,- DKR
2.138,- DKR 10% Customs
5.878,- DKR 25% Tax
29.391,- DKR

I did't go to business School, but i hope it make sense to you?

Jeg går ud fra du er dansker så derfor skriver jeg den også lige på dansk. Hvis jeg regner med ovenstående på deres priser kommer det til at passe meget godt. Man skal også betale moms af told'en, lidt uretfærdigt men sådan er der så meget i det danske skatte/afgift system. Det koster ca. 1500$ at flytte en bil til DK fra USA. Så det er ikke det der koster... Håber det giver mening!

fishtank | 2013年1月13日

Thank you, I stand corrected. It's the 10% import duty I did not take into consideration.

Pricing seems fair with this in mind.

DTsea | 2013年1月14日

Well, fishtank, it's fair in how calculated, but it's NOT fair that your government charges an import duty. Why do you (Danes) tolerate this? (We don't have import duties on cars in the US).