China Market situation and outlook

[JRP3]

Fallenone the way I understand your explanation in the quoted post, your explanation does not really differ from the bullet point explanation in my post.

If your post offers the correct explanation, then there is likely some misunderstanding in translation.

The transaction that you described is not a discount, it is a trade in. Trade in is a benefit to a customer, but not for the full value of the price offset on the new car purchase. The offset on the new price is not a discount, it is an exchange.

Tesla will help customer auction his/her old car if the customer so wish, or the customer him/herself present proof of selling his/her old car within the past 3 months. Based on the make and year of the old car, Tesla China gives the customer a discount on the new Model S up to $12.5k. .

That is not a trade in, if it's accurate. Why would Tesla give a discount if you previously sold your car to someone else? If that is what Tesla is doing it's not a trade in and it's frankly rather strange.

 

[Fallenone]

Call it trade-in or discount, whatever. The point is, the customer gets to keep all the resale value of their old car, PLUS a marked down price of the Model S for up to 12.5k USD. Tesla is not gaining ANY money from customers selling their old cars. For example, if you just sold your old car last week and already spent all the money you got from that transaction, present the proof of you selling that ICE car and Tesla will take up to 12.5k USD off your new order on a Model S. Tesla is not getting any money from that transaction. So effectively, no matter what you call it, promotion policy, trade-in, etc., this is a discount without any doubt.

I dug deeper in this and found out from a Tesla China salesman more details.

So, any ICE or hybrid car qualifies this, as long as that car hasn't been traded in the past three months and is currently under the ownership of the customer or his/her direct relatives. So yeh if you were really driving a beaten down $1k ICE car for over 3 months, you can sell that one and get this discount on the new Model S.

If the qualified customer buys a P85D or P90D, Tesla takes 80k RMB or 12.5k USD off the Model S. For 70 and 70D, Tesla takes 50k RMB or 7.8k USD off the Model S.

This offer ends on 12/31/2015.

Fallenone the way I understand your explanation in the quoted post, your explanation does not really differ from the bullet point explanation in my post.

If your post offers the correct explanation, then there is likely some misunderstanding in translation.

The transaction that you described is not a discount, it is a trade in. Trade in is a benefit to a customer, but not for the full value of the price offset on the new car purchase. The offset on the new price is not a discount, it is an exchange.




That is my understanding from Fallenone's explanation and from reading Rob's post.

- - - Updated - - -

Just to make it crystal clear for everyone who wish to learn more about this, here are the marketing words from the original official Tesla China in Chinese (followed by a few paragraphs of introducing Tesla's mission and what Tesla has achieved in China so far):

今天，我们向最终使命再一次加速
我们向每一辆燃油车召唤
2015年11月15日至2015年12月31日
将燃油车置换成特斯拉纯电动Model S
我们将为您提供零费用、零利润、零等待的置换服务
及最高至8万的置换优惠

You can use Google to translate it but here's mine.

Today, we accelerate once again towards our final goal (which is the acceleration of the advent of sustainable transportation)
We are calling to every single ICE car
From 11/15/2015 to 12/31/2015
Trade-in your ICE car for a pure electric Model S
We will provide you with a trade-in service that is 0 cost, 0 profit, 0 wait time
And a trade-in discount of up to 80 thousand (RMB)

And for the fine prints in their official definitions on this one:

The Model S must be a new order therefore cannot be a previous showroom car, test drive car, etc. The owner of the previous ICE car must be the same or direct relative of the buyer of this new Model S. The previous car must not be a full electric car (i.e. hybrid qualifies) and can be of any year. The old car must not be traded after the Model S order confirmed and before delivery. The old car must not have been traded in the past 3 months.

That is not a trade in, if it's accurate. Why would Tesla give a discount if you previously sold your car to someone else? If that is what Tesla is doing it's not a trade in and it's frankly rather strange.

 

[JRP3]

Just to make it crystal clear for everyone who wish to learn more about this, here are the marketing words from the original official Tesla China in Chinese (followed by a few paragraphs of introducing Tesla's mission and what Tesla has achieved in China so far):

今天，我们向最终使命再一次加速
我们向每一辆燃油车召唤
2015年11月15日至2015年12月31日
将燃油车置换成特斯拉纯电动Model S
我们将为您提供零费用、零利润、零等待的置换服务
及最高至8万的置换优惠

You can use Google to translate it but here's mine.

Today, we accelerate once again towards our final goal (which is the acceleration of the advent of sustainable transportation)
We are calling to every single ICE car
From 11/15/2015 to 12/31/2015
Trade-in your ICE car for a pure electric Model S
We will provide you with a trade-in service that is 0 cost, 0 profit, 0 wait time
And a trade-in discount of up to 80 thousand (RMB)

And for the fine prints in their official definitions on this one:

The Model S must be a new order therefore cannot be a previous showroom car, test drive car, etc. The owner of the previous ICE car must be the same or direct relative of the buyer of this new Model S. The previous car must not be a full electric car (i.e. hybrid qualifies) and can be of any year. The old car must not be traded after the Model S order confirmed and before delivery. The old car must not have been traded in the past 3 months.

OK, so that is not what you previously wrote, in fact it's the opposite:

Tesla will help customer auction his/her old car if the customer so wish, or the customer him/herself present proof of selling his/her old car within the past 3 months.

 

[Fallenone]

I don't even know why I wrote that yesterday... Must be brain fart... The three months thing is to prevent a customer buying a $1k beat down car then selling it to get the 12.5k discount on the P85D. But if you have a car that is purchased more than three months ago, and you sell it yourself elsewhere after you made your order of the Model S, Tesla China is not saying you can't get the discount in their terms.

OK, so that is not what your previously wrote, in fact it's the opposite:

 

[Auzie]

Call it trade-in or discount, whatever. The point is, the customer gets to keep all the resale value of their old car, PLUS a marked down price of the Model S for up to 12.5k USD. Tesla is not gaining ANY money from customers selling their old cars. For example, if you just sold your old car last week and already spent all the money you got from that transaction, present the proof of you selling that ICE car and Tesla will take up to 12.5k USD off your new order on a Model S. Tesla is not getting any money from that transaction. So effectively, no matter what you call it, promotion policy, trade-in, etc., this is a discount without any doubt.

I dug deeper in this and found out from a Tesla China salesman more details.

So, any ICE or hybrid car qualifies this, as long as that car hasn't been traded in the past three months and is currently under the ownership of the customer or his/her direct relatives. So yeh if you were really driving a beaten down $1k ICE car for over 3 months, you can sell that one and get this discount on the new Model S.

If the qualified customer buys a P85D or P90D, Tesla takes 80k RMB or 12.5k USD off the Model S. For 70 and 70D, Tesla takes 50k RMB or 7.8k USD off the Model S.

This offer ends on 12/31/2015.



- - - Updated - - -

Just to make it crystal clear for everyone who wish to learn more about this, here are the marketing words from the original official Tesla China in Chinese (followed by a few paragraphs of introducing Tesla's mission and what Tesla has achieved in China so far):

今天，我们向最终使命再一次加速
我们向每一辆燃油车召唤
2015年11月15日至2015年12月31日
将燃油车置换成特斯拉纯电动Model S
我们将为您提供零费用、零利润、零等待的置换服务
及最高至8万的置换优惠

You can use Google to translate it but here's mine.

Today, we accelerate once again towards our final goal (which is the acceleration of the advent of sustainable transportation)
We are calling to every single ICE car
From 11/15/2015 to 12/31/2015
Trade-in your ICE car for a pure electric Model S
We will provide you with a trade-in service that is 0 cost, 0 profit, 0 wait time
And a trade-in discount of up to 80 thousand (RMB)

And for the fine prints in their official definitions on this one:

The Model S must be a new order therefore cannot be a previous showroom car, test drive car, etc. The owner of the previous ICE car must be the same or direct relative of the buyer of this new Model S. The previous car must not be a full electric car (i.e. hybrid qualifies) and can be of any year. The old car must not be traded after the Model S order confirmed and before delivery. The old car must not have been traded in the past 3 months.

The crucial difference between trade-in and a discount is who gets to keep the auction proceeds.

If customers keep the proceeds then Tesla discounted the sales price in China. The discount value is equal to auction proceeds but is capped to $12.5k.

Thanks for the clarification.

There seem to be a lot of confusing info coming from non-English language markets, mainly due to translation errors. My confidence in the information accuracy is not high, but I appreciate the information.

 

[Fallenone]

Exactly. And from all the Chinese sources I found (all from Tesla, be it their different marketing platforms or official website or salesman), Tesla is not getting the proceeds from the auction, so this is effectively a discount.

The crucial difference between trade-in and a discount is who gets to keep the auction proceeds.

If customers keep the proceeds then Tesla discounted the sales price in China. The discount value is equal to auction proceeds but is capped to $12.5k.

Thanks for the clarification.

There seem to be a lot of confusing info coming from non-English language markets, mainly due to translation errors. My confidence in the information accuracy is not high, but I appreciate the information.

 

[JRP3]

But if you have a car that is purchased more than three months ago, and you sell it yourself elsewhere after you made your order of the Model S, Tesla China is not saying you can't get the discount in their terms.

From your translation:

Trade-in your ICE car for a pure electric Model S
We will provide you with a trade-in service that is 0 cost, 0 profit, 0 wait time
And a trade-in discount of up to 80 thousand (RMB)

That does not say you can sell or trade your car in somewhere else. I don't see any mention of selling or trading your car to anyone other than Tesla. The way I read your translation is:

"Bring in your car to Tesla, we will buy it from you on the spot with no transaction fees, plus we will give an additional discount possibly worth 80k RMB"

 

[Fallenone]

First this is just their marketing flyer language. Second it also doesn't say you disqualify yourself for this discount it you sold your car directly to a third party.

And even if you cannot sell your car yourself, how is this not a discount when Tesla promises 0 profit from the trade in AND offers an up to 12.5k discount on the new Model S?

From your translation:



That does not say you can sell or trade your car in somewhere else. I don't see any mention of selling or trading your car to anyone other than Tesla. The way I read your translation is:

"Bring in your car to Tesla, we will buy it from you on the spot with no transaction fees, plus we will give an additional discount possibly worth 80k RMB"

 

[Auzie]

From your translation:



That does not say you can sell or trade your car in somewhere else. I don't see any mention of selling or trading your car to anyone other than Tesla. The way I read your translation is:

"Bring in your car to Tesla, we will buy it from you on the spot with no transaction fees, plus we will give an additional discount possibly worth 80k RMB"

I am inclined to think that Tesla offered trade-in service rather than a discount.

Discount on the price of new car conditional on the auction price makes little sense. I could be wrong.

 

[JRP3]

First this is just their marketing flyer language. Second it also doesn't say you disqualify yourself for this discount it you sold your car directly to a third party.

No, nor would I expect it to, since I've never heard of any car dealer giving you a special deal if you sell your car to someone else. What they do say is how to get the deal, i.e. trade your car in to Tesla.

And even if you cannot sell your car yourself, how is this not a discount when Tesla promises 0 profit from the trade in AND offers an up to 12.5k discount on the new Model S?

I never said it wasn't. I'm just saying the idea that Tesla is allowing people to sell their old car to someone else and still claim the discount doesn't make much sense, nor is there any wording suggesting that. I'm also not sure what it means that Tesla will have no profit from the trade. If they can somehow sell the car for more than they gave you why wouldn't they? They may be offering such a high trade in value that it's unlikely they could sell it for more than that.

 

[stopcrazypp]

Rather than arguing about it, does anyone have a direct link to Tesla's website that shows this program or at least a screenshot of marketing's email that has all the fine print. All the direct statements posted so far said there is up to 80k RMB on the table, but doesn't say the exact amount and the conditions. And everywhere it mentions it, it says trade-in, it doesn't say you can just sell the old car to someone else and then still claim the amount.

 

[Fallenone]

Thing is, the final terms haven't come out yet. It is expected to be out sometime within 24 hours.

Rather than arguing about it, does anyone have a direct link to Tesla's website that shows this program or at least a screenshot of marketing's email that has all the fine print. All the direct statements posted so far said there is up to 80k RMB on the table, but doesn't say the exact amount and the conditions. And everywhere it mentions it, it says trade-in, it doesn't say you can just sell the old car to someone else and then still claim the amount.

 

[Auzie]

This is typical tesla cheerleader FUD. Yes, Fear, Uncertain and Doubt for the fact. That's no wonder why those FUDster lost money this year. Can't LoL more!

usually FUDseter is LOSER and keep denying! Haha, can't LoL even more!

No, it's right standard to right poster in this forum.

My view is that each one of us speak for ourselves only when we set personal standards

Your posts make it perfectly clear where your standards are

If you blindly trust what Elon said about production rate, model S demand, model X ramp up, gigafactory and tesla energy since H2 of 2014, you'll screw up yourself.

I am curious, what makes you think and say that anyone here blindly trusts anyone else's statements on anything?

I often do not trust myself and keep checking and rechecking, let alone anyone else. I do trust my bank account statements tough.

That's because you made money in earlier years.

It can only be some clairvoyant skills that enable you to tell me how I made money in trading.

Sorry to break it to you, but your clairvoyance is incorrect. I have a trading tool that guides me in trading decisions

 

[Fallenone]

Another possibility on this one is, China has a purchase tax on cars and all domestic electric cars are exempted from this. This tax is about 10% of the price after considering import duty. Tesla said they are working closely on this one and is optimistic of letting Tesla being exempted from this purchase tax by the end of this year. The discount here is about 8% of the price after import duty. So it could be Tesla already has a nod on the purchase tax exemption and basically returning this tax to customers in the form of a discount to attract buyers.

 

[electracity]

Another possibility on this one is, China has a purchase tax on cars and all domestic electric cars are exempted from this. This tax is about 10% of the price after considering import duty. Tesla said they are working closely on this one and is optimistic of letting Tesla being exempted from this purchase tax by the end of this year. The discount here is about 8% of the price after import duty. So it could be Tesla already has a nod on the purchase tax exemption and basically returning this tax to customers in the form of a discount to attract buyers.

Good insight. Whether Tesla get the exemption or not, it is still removing that objection from the sales process.

 

[schonelucht]

I am inclined to think that Tesla offered trade-in service rather than a discount.

Discount on the price of new car conditional on the auction price makes little sense. I could be wrong.

I am inclined to believe the two native Chinese speakers here who are saying that this is a discount you get on the condition that you sell your ICE car based on their reading of Chinese marketing material and forums. I do agree it's strange why Tesla would do it this way. Maybe there is a kickback for Tesla where the state will grant them some tax relief or whatever provided they are able to convert a given number of ICE drivers into EV drivers?

 

[maoing]

Unless Tesla China would like to get more trouble of cheating customers, the Chinese information available so far is to offer up to 80K RMB ($12.5K) incentive to customers, period.

 

[JRP3]

I am inclined to believe the two native Chinese speakers here who are saying that this is a discount you get on the condition that you sell your ICE car based on their reading of Chinese marketing material and forums.

Except we are getting different interpretations from them.

Unless Tesla China would like to get more trouble of cheating customers, the Chinese information available so far is to offer up to 80K RMB ($12.5K) incentive to customers, period.

So you are saying the incentive is not dependent on selling or trading in another vehicle.

 

[stopcrazypp]

Unless Tesla China would like to get more trouble of cheating customers, the Chinese information available so far is to offer up to 80K RMB ($12.5K) incentive to customers, period.

That is a mis-characterization. The direct quotes posted so far say it is tied to a trade-in. There are no quotes so far that show that you can get up to 80K RMB with no strings attached. So no, it is not: "up to 80K RMB ($12.5K) incentive to customers, period". And notice even in that statement it says "up to" and so far Tesla has not posted official fine print (according to Fallenone) as to the criteria to determine the specific amount.

 

[maoing]

So you are saying the incentive is not dependent on selling or trading in another vehicle.

That is implied in this topic and I don't want to re-type. Also nobody would like to lose the incentive not trading in the ICE car.