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Canadian Pricing and Delivery

Discussion in 'Canada' started by Doug_G, Apr 27, 2012.

  1. Doug_G

    Doug_G Lead Moderator

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    As mnx pointed out on the prototype tour thread, Canadian pricing is due out soon. I've heard that they are indeed working on it.

    I'm concerned that Tesla is going to overprice the car. A fellow I know was told they were thinking of averaging the last 5 years exchange rate. But that would be highly biased as it includes the turbulence around the 2008 financial crisis. For the last couple of years the dollar has been within two cents of parity, and we're often above parity. The Canadian buck is now considered a "petrodollar".

    I can also point out that Tesla was excessively conservative on the exchange rate for my Roadster. They priced in a possible worsening exchange rate, and it went entirely the other way.

    Canadians don't like getting screwed on the exchange rate, and overpricing the Model S could cause a backlash. Surely if the margins on this car are as good as planned they can afford to take a tiny risk on exchange fluctuations.

    I'm also wondering how soon the cars will launch here. They said "three months after the US introduction", which makes it early October? I'd sure want to have the car before the snow flies! But I was also noticing that the owner of US Sig Special #114 said on these forums that he was told his delivery would be mid-August. This suggests that the early production rate will be at best 200 cars a month.
     
  2. RKM

    RKM Member

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    I share your concern re. Canadian pricing. There would be no reason (other than gouging) for CDN pricing to be higher than US pricing, given the strength of our dollar. The S is a stretch for us, regarding price. I'd hate to see TM boost the Canadian price beyond the US price. I'd asked a sales rep about the Canadian price for a 370 km pack several months ago. His response was that he estimated it would cost in the mid sixty range. Ignoring options, this would be very comparable to US pricing, unless he was factoring in the UF Fed $7500 credit (?).

    If Tesla is concerned about the risk of currency fluctuation, is it an option for Canadians to purchase with US funds for the US price?

    Rob
     
  3. Jeeps17

    Jeeps17 Cath Jockey in a P85

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    #3 Jeeps17, Apr 27, 2012
    Last edited: Apr 27, 2012
    +1 to that.

    The US / Canada price differences on cars have traditionally been "explained" by (1) the relative strength of the currencies, which are not currently an issue, as pointed out by Doug, and (2) the radically different market sizes between the two countries.

    Because of the latter, I was able to import a new Toyota Sienna in 2008 for a whopping 25% saving on the final price of the vehicle, compared to what I would have paid at a local dealership. The potential savings only increase with more luxurious vehicles, but since you have to purchase the car (i.e. no leasing), not everyone can afford the lump-sum expense.

    Since then consumer backlash about perceived gouging in Canada forced most manufacturers to adjust their prices to be more comparable to those in the US, especially for mainstream vehicles (but even Porsche added rebates!). The differences are now generally smaller, but still persist.

    The market for Tesla is much smaller, and I agree that any price substantially greater than that in the US would be a major turn-off for many, including myself, especially when considering the much higher tax rates we have to contend with on such a purchase (current combined sales tax in Quebec are over 15%).

    This is one of the few things that would make me seriously think about cancelling my reservation.
     
  4. mnx

    mnx 2013 P85

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    I'm going to be pissed if they hose us on exchange rates. I'm more than willing to pay in USD if they're concerned about currency fluctuations.

    If the Canadian price is much higher than the US price, I'll be downgrading my Sig reservation in a heartbeat to make up for the difference.

    Also agree with your comments on having the car before the snow flies.... If not, hopefully they can deliver it with a set of winter tires installed!

    (oh and btw thanks for starting a new thread Doug, I should know better. :)


     
  5. neroden

    neroden Happy Model S Owner

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    A very valid concern. Tesla's been making a habit of overpricing in certain ways. I understand that this is understandable financial conservatism from a startup, but it's dangerous.

    What I'd suggest Tesla do is to hedge against currency fluctuations: I believe Tesla has a planned number of Canadian models to be produced per year, and I assume they can sell them all. So sell Canadian dollar futures and buy American for the appropriate amount of money. They'll have to incorporate a small premium for the cost of the hedging, but that shouldn't be large. They only lose if they fail to sell the cars.
     
  6. mnx

    mnx 2013 P85

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    Excellent suggestion.

    They many not even lose on the currency forward (hedge) if they fail to sell cars, it could work out in their favour...
     
  7. agileone

    agileone CDN P#40

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    Totally agree. Could be a deal breaker for me too!
     
  8. hcsharp

    hcsharp Active Member

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    +1. I would think this would be standard practice rather than overpricing.

    About 10 or 15 years ago a friend of mine loaned me his Chevy Suburban for a day. I noticed the speedometer was in km and asked why. He said he saved almost $10,000 by buying the car in Ontario and bringing it to the States. Neither of us could think of a good reason why the car was so much cheaper in Canada. He said other dealers in Ontario were charging about the same price. Apparently things have changed.
     
  9. clea

    clea Member

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    Well one can always hope that they return to the good old days :wink:
     
  10. njligernj

    njligernj Member

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    I'm a Model X reservation holder -- if the S comes out overpriced I will probably cancel my reservation. Man it would be nice if a company just decided to actually appeal to the Canadian market and priced it fairly. Hell make it lower (not saying it has to be 40% lower -- just a couple of points) and you could probably get a whole ton of publicity purely out of the idea of being pretty much the one company in the US that doesn't feel the need to screw us over. We've had two-three years of par or above now I think -- it's not a huge risk and would create a lot of goodwill. I'm in a province with no rebates so if they over-price (plus add in higher Canadian taxes) I could easily be looking at paying $15k-$20k more than the publicized (with rebate) price (and the actual price I would pay if I lived in the US). That's a pretty big pill to swallow. Oh well ... fingers crossed.
     
  11. Spurkey

    Spurkey P04251

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    This is exactly what Tesla faces - they stand to lose twice their reservations if Canadians see price gouging on the S. There isn't just Canada to worry about, Europeans will potentially be affected similarly.

    I for one am not too concerned, Tesla to this point has proven to be fairly far-sighted in its actions and I would be quite surprised if the S comes in substantially higher than the US price. They learned a lesson on the Roadster pricing, I don't see the S or the X, which will be substantially higher-production-volume cars, having the same issue.
     
  12. Doug_G

    Doug_G Lead Moderator

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    They may have learned the lesson on Roadster pricing, or perhaps more likely they figure the Canadian market is insignificant, leading to a self-fulfilling prophesy... If they make that mistake it would really be too bad, because I think the X especially could be a big hit here.

    On the other hand, at least the S should qualify for NAFTA. A good chunk of the Roadster price difference was import duty.
     
  13. KBF

    KBF Model S 2017

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    Canadian pricing for me is definitely a major factor in whether I downgrade to production or not. I'm hopeful Elon Musk's time in Canada has given him an understanding of this US-Cdn pricing issue, and now that they have an American factory we should see par. If they don't understand the issue, their short-term money-grab will backfire, and they'll lose at least $10k from me!

    I really wish I knew even a ballpark figure regarding time difference between Canadian Sigs and Production - Tesla wouldn't give me an answer, although the term "a few months" was mentioned in passing. The entire Canadian Sig run will probably take one-two weeks max to complete, but I'm concerned that there will be a LOT of US "P's" done before Canadian ones. And I'd love to drive my car before winter!
     
  14. Alex_C

    Alex_C Member

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  15. Local host

    Local host Member

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    I had a friend stop by the S on display at the Rideau Centre. She was told the price of the S was 60 - 90. I am not sure if that is before or after the Ontario EV tax credit.
     
  16. Doug_G

    Doug_G Lead Moderator

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    That's just a ballpark - corporate hasn't spit out the final numbers yet.
     
  17. Doug_G

    Doug_G Lead Moderator

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    I hope not; unless they have a very good explanation for why it is so much more expensive to have daytime running lights, that is simply gouging.
     
  18. Jaff

    Jaff Active Member

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    Agreed...Canadians are tired of hearing illogical arguments as to why U.S. manufactured goods cost more up here...

     
  19. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    Compared to when I lived in Canada, 8.5% difference seems really good. It used to be 25%. Of course, there should be no difference.
     
  20. KBF

    KBF Model S 2017

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    CAD has been low lately. Its trending back to par again, but at this crucial time (I assume we'll see prices soon for the S), will this affect our chances of seeing comparable prices? Or is the rate totally irrelevant?
     

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