EU Market Situation and Outlook

[SebastianR]

So, the tax (import duty) is 150% ?
Wonder how the warranty works for used Teslas. Can Danes get them repaired at Danish service centers if it was bought in some other country?

It is not technically an import duty but a registration fee. So you can import a car any day, no problem. Just the second you get the plates, you need to pay.

Details on that here: SKAT: Registreringsafgift (in Danish from the Danish Tax authorities)

It is not a "straight" % but rather as per the following:

Personbiler

105 % af afgiftsværdien op til 81.700 kr. og 180 % af resten

(105% of the value for the first 81.700 DKK / 180% of the value above that value). This way cheaper cars are also cheaper to buy.

You can do warranty in other service centres (e.g. in Germany) - the issue are loaners: if you live in DK and give your Danish Model S to the Hamburg Service Centre for service you may get an ICE loaner - of course with German plates. The probelme is, that you are not allowed to drive a foreign car in DK as a resident without risking to pay the full registration fee. This is to avoid people just registering their cars in Sweden or Germany and skipping the Danish registration costs. So you would need to stay outside DK with your German loaner until your own car is done.

 

[matbl]

It is not technically an import duty but a registration fee. So you can import a car any day, no problem. Just the second you get the plates, you need to pay.

Details on that here: SKAT: Registreringsafgift (in Danish from the Danish Tax authorities)

It is not a "straight" % but rather as per the following:

Personbiler

105 % af afgiftsværdien op til 81.700 kr. og 180 % af resten

(105% of the value for the first 81.700 DKK / 180% of the value above that value). This way cheaper cars are also cheaper to buy.

You can do warranty in other service centres (e.g. in Germany) - the issue are loaners: if you live in DK and give your Danish Model S to the Hamburg Service Centre for service you may get an ICE loaner - of course with German plates. The probelme is, that you are not allowed to drive a foreign car in DK as a resident without risking to pay the full registration fee. This is to avoid people just registering their cars in Sweden or Germany and skipping the Danish registration costs. So you would need to stay outside DK with your German loaner until your own car is done.

So is the registration fee adder 180% of the price? Or is it a 80% adder (making the total 180%)?
I checked a standard VW Passat (pretty common car) in denmark and sweden. The price in denmark was around 80% higher in denmark, not 180%.

 

[schonelucht]

You can do warranty in other service centres (e.g. in Germany) - the issue are loaners: if you live in DK and give your Danish Model S to the Hamburg Service Centre for service you may get an ICE loaner - of course with German plates. The probelme is, that you are not allowed to drive a foreign car in DK as a resident without risking to pay the full registration fee. This is to avoid people just registering their cars in Sweden or Germany and skipping the Danish registration costs. So you would need to stay outside DK with your German loaner until your own car is done.

the Netherlands has the same thing (BPM = registration tax on cars and motorcycles). Dutch tax authorities also levied the registration tax on non-domestically registered cars that residents used in the country, just like Denmark does. This has, rightly in my opinion, been rejected by the European court of Justice. See : Staatssecretaris van Financiën versus L. A. C. van Putten (C-578/10), P. Mook (C-579/10) en G. Frank (C-580/10) for the relevant case. The Danish government has no right to levy this kind of tax anymore and if they still do, I would suggest judicial action. There is no doubt European courts sides with the citizen in this particular issue.

edit : just to clarify, this is not about the tax on cars domestically registered, this is about cars registered elsewhere in the EU and then temporarily loaned to a Danish citizen.

 

[SebastianR]

So is the registration fee adder 180% of the price? Or is it a 80% adder (making the total 180%)?
I checked a standard VW Passat (pretty common car) in denmark and sweden. The price in denmark was around 80% higher in denmark, not 180%.

My understanding is, that it is 180% of the price. If you compare cars prices, make sure you compare the exact same level of extras. Typically the cars offered in DK are bare-bone, stripped down cars. And yes, DK is known to have extremely low pre-registration fee car prices: for years Germans have imported their cars from DK as without the crazy fees they were way cheaper than buying that same car in DE.

 

[jhm]

I do wish that Tesla would sell services on a subscription basis rather than bundling them into the price of the car. If you are paying a large tax on the price or value of the car, then it would be better to save $2000 on the purchase price and subscribe to lifetime access to the Supercharger network $2000. This way you avoid taxes on $2000, which at 180% would be a $3600 savings.

 

[Auzie]

I do wish that Tesla would sell services on a subscription basis rather than bundling them into the price of the car. If you are paying a large tax on the price or value of the car, then it would be better to save $2000 on the purchase price and subscribe to lifetime access to the Supercharger network $2000. This way you avoid taxes on $2000, which at 180% would be a $3600 savings.

Great idea jhm.

All add on costs, like supercharger access, service, anything else that can be stripped off the basic car cost, should be sold separately, at least outside of US, as these items are unlikely to attract import duty if they are sold separately.

It does not make sense to pay import duty on locally consumed services, like regular servicing and supercharging.

 

[RobStark]

No import duty for Tesla in EU,Norway,Japan,or Australia. Tesla should have enough North American content to export into Canada and Mexico duty free "soon."

Australia has luxury tax of 33% for the amount above $(AUD)75k for fuel efficient vehicles. Non fuel efficient vehicles the threshold is $63k.

Switzerland has a 4% import duty.

I guess the big one is China's 26% import duty.

We have discussed the Danish luxury tax.

It may make sense to unbundle in certain markets but not everywhere.

There are too many people that will drive for the lowest price or payment then have an awful experience because they did not get Supercharger Access or x,y,z option then tell friends and family they had an awful experience with Tesla.

 

[Auzie]

Australia has luxury tax of 33% for the amount above $(AUD)75k for fuel efficient vehicles. Non fuel efficient vehicles the threshold is $63k.

Switzerland has a 4% import duty.

I guess the big one is China's 26% import duty.

It may make sense to unbundle in certain markets but not everywhere.

Unbundling makes a lot of sense to people paying either import tax or luxury tax (or tax by any other name) on a nominated car price

My view is that the satisfaction derived from any tax minimization or avoidance is likely to be great regardless of the tax level (33% or 4%) or the dollars saved

I wonder what are fuel efficient and non fuel efficient vehicles

It may make sense to unbundle in certain markets but not everywhere.

There are too many people that will drive for the lowest price or payment then have an awful experience because they did not get Supercharger Access or x,y,z option then tell friends and family they had an awful experience with Tesla.

If too many people choose certain experiences, it is their right to choose as they wish. In my view, giving people choices is likely to be a better option in this case.

There might be a business reason for restricting choices, but paternalistic reasons for taking choices away is unlikely to appeal to customers.

 

[RobStark]

Unbundling makes a lot of sense to people paying either import tax or luxury tax (or tax by any other name) on a nominated car price

My view is that the satisfaction derived from any tax minimization or avoidance is likely to be great regardless of the tax level (33% or 4%) or the dollars saved

I wonder what are fuel efficient and non fuel efficient vehicles

My view is avoiding 4% on $2k on a $106k purchase will not be noticed.

For the purposes of calculating Australian Luxury Car Tax (LCT), cars with a combined-cycle fuel consumption of 7L/100km or less (as calculated according to the the vehicle standards in force under section 7 of the Motor Vehicle Standards Act 1989) are classifed as fuel-efficient "green" cars. All BEVs qualify.

If too many people choose certain experiences, it is their right to choose as they wish. In my view, giving people choices is likely to be a better option in this case.

There might be a business reason for restricting choices, but paternalistic reasons for taking choices away is unlikely to appeal to customers.

Tesla limits color choices to 8 to streamline production. It encourages people to choose either sold white or black by charging $1k for 4 metallic colors or $1500 for pearl colors.

Most Tesla buyers have never owned a BEV and almost certainly not a long range BEV. They are making decisions without the informed experience. Tesla is correct in making Supercharger Access and Navigation standard in most markets.

If you offer Porsche number of options you end up charging Porsche prices because of the manufacturing complexity.

Tesla has been quite paternalistic and has a hardcore enthusiast group that is growing by the day. Yes, everyone is free to buy a Panamera PHEV or ELR PHEV(in North America) or wait for Audi Vaporware to actually reach dealerships. Maybe. Someday. Soon.

 

[Auzie]

Thanks Rob quite informative.

I disagree on potential appeal of avoiding 4% tax on $2000 or similar add-on costs. It is my experience that people's happiness due to any price (tax) minimization through choices is dispropotionate and often disconnected to the dollar amount. Simply put, it is not rational.

When people commit to a large transaction they do not ignore the details, quite the opposite, people pay more attention to larger transactions and scrutinize them more than smaller ones. If Tesla wishes to make customers happy, that would be one small way to go about it.

Tesla can get away with being paternalistic because there is no competition. Their aggregate value offer to customers outweighs small annoyances, like bundling, long wait times, overpromising sometimes, poor communication, lack of transparency etc. Just because they can get away with doing business that way does not make it the sustainable long-term strategy. I understand the need for long wait times, lack of color choices, but bundling is something that they can improve on over time and in some markets when they are ready.

 

[RobStark]

Auzie,

My experience is the opposite with tiny amounts and large purchases. Like homes and $80 fees. Particularly when it comes to prices one would consider luxury goods.

Tesla's main goal is not to maximize profits or customer satisfaction or happiness. Those are by products of the main goal; transition to the world to sustainable transportation. If it ruffles some customer feathers to write a letter not to abuse Superchargers that is ok. If the brain trust believes the it furthers the main goal. That goes smack against corporate philosophy 101 and luxury goods company philosophy 101. Elon don't care.

When Tesla does have true competition not only in hardware but software and product support i.e. Supercharger Network that marketplace will be a different reality. In a different reality you reexamine your strategy and make adjustments as you see fit.

Customers will very likely have a different view of Tesla. And long range BEVs and QC chargers.

BTW Most popular car brands by google searches. Always our immortal beloved, Norway.

 

[mwulff]

My understanding is, that it is 180% of the price. If you compare cars prices, make sure you compare the exact same level of extras. Typically the cars offered in DK are bare-bone, stripped down cars. And yes, DK is known to have extremely low pre-registration fee car prices: for years Germans have imported their cars from DK as without the crazy fees they were way cheaper than buying that same car in DE.

An added twist to the danish tax is that is is 105/180% - (4000 dkk * (km/l above 16)). So there is a tax break for fuel efficient vehicles. If you do the math on a Tesla it comes out to about 65 km/l which means a 4000 * (65-16) = 196.000 DKK tax break on the final registration fee.

But with the current political climate in Denmark I think we should prepare for the worst and expect that sales will drop to about 0-5 a year. Mostly imported second hand vehicles.

Effectively without the tax break on EV's they are dead in Denmark.

 

[hobbes]

Update from Norway by MrBarcardi: 165 Model S registered in August through 8/23

(Nesten) 1500 nye Model S registrert i Mars!

 

[Gerasimental]

Update from Norway by MrBarcardi: 165 Model S registered in August through 8/23

(Nesten) 1500 nye Model S registrert i Mars!

That points to only 215 for the month. Worrying?
European demand in general still seems to be growing healthily, but Norway certainly looks very saturated and perhaps to see a slight pull-back. Could be a simple case of supply prioritisation. Wonder if the delivery times thread supports this.

 

[RobStark]

That points to only 215 for the month. Worrying?
European demand in general still seems to be growing healthily, but Norway certainly looks very saturated and perhaps to see a slight pull-back. Could be a simple case of supply prioritisation. Wonder if the delivery times thread supports this.

Delivery if you order today in the US is late September.

Delivery if you order today in Norway is November.

 

[hobbes]

That points to only 215 for the month. Worrying?
European demand in general still seems to be growing healthily, but Norway certainly looks very saturated and perhaps to see a slight pull-back. Could be a simple case of supply prioritisation. Wonder if the delivery times thread supports this.

Had the same thoughts. In July (first month of Q3) there were only 220 and we had still a Europe total higher than that of the second month of Q2 though, so I guess no reason to worry.
I think delivery timing for non-US is too much determined by batching the shipping to be an accurate measure of demand.

 

[RobStark]

Top 12 European BEV/PHEV Sales July and YTD

Pl Europe...............................July... 2015 % '14Pl
1 Mitsubishi Outlander PHEV ...1.698 15.567 17 1
2 Nissan Leaf ........................1.031 9.665 10 2
3 Renault Zoe e) ....................980 9.459 10 3
4 Tesla Model S .....................1.106 8.513 9 4
5 Volkswagen Golf GTE............1.599 8.349 9 22
6 Volkswagen e*Golf 917 ........6.584 7 9
7 Audi A3 e*Tron 1.285.......... 6.040 7 19
8 BMW i3 ..............................694 5.498 6 5
9 Volvo V60 Plug*In............... 337 2.806 3 7
10 Volkswagen e*Up!............. 230 1.864 2 6
11 Nissan e*NV200 / Evalia......181 1.814 2
12 Renault Kangoo ZE e).........200 1.811 2 8


* Belgium has not reported so its numbers are not included.

 

[Benz]

Top 12 European BEV/PHEV Sales July and YTD

Pl Europe...............................July... 2015 % '14Pl
1 Mitsubishi Outlander PHEV ...1.698 15.567 17 1
2 Nissan Leaf ........................1.031 9.665 10 2
3 Renault Zoe e) ....................980 9.459 10 3
4 Tesla Model S .....................1.106 8.513 9 4
5 Volkswagen Golf GTE............1.599 8.349 9 22
6 Volkswagen e*Golf 917 ........6.584 7 9
7 Audi A3 e*Tron 1.285.......... 6.040 7 19
8 BMW i3 ..............................694 5.498 6 5
9 Volvo V60 Plug*In............... 337 2.806 3 7
10 Volkswagen e*Up!............. 230 1.864 2 6
11 Nissan e*NV200 / Evalia......181 1.814 2
12 Renault Kangoo ZE e).........200 1.811 2 8


* Belgium has not reported so its numbers are not included.

Total Plug-In sales in Europe in 2015 are more than 75,000. That's even more than in the US !!!

 

[schonelucht]

Some small bits of information from the Netherlands. Plugin hybrids will loose a lot of their fiscal benefits in 2016 while full electric cars won't. This will make a Tesla S/X more competitive, I expect sales to increase quite a bit next year. Secondly, the CPO program is underway in Europe. Tesla is currently emailing current owners to offer their car for a trade-in.

 

[Johan]

I like the sound of a European CPO program underway. There will be lots of demand for that now with the X coming and many people looking to upgrade/trade an S for an X.