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EU Market Situation and Outlook

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Tesla is doing really well in Belgium and Switzerland.

What are the special incentives in Belgium and Switzerland that are pushing Tesla forward?

Belgium also has a very favourable tax regime for company cars. You'll find that most Tesla's sold in Belgium are through this scheme. Switzerland is a rich country whose currency massively appreciated overnight (literally!) which gave everything foreign a 10-20% discount. It's also a very decentralised country where some cantons will give EVs differing fiscal incentives. You'll find an overview (not in English) on the website of the department of energie.

It seems Tesla is also starting to gain traction in Sweden and Austria. What are the special incentives here?

I don't know enough about these countries. Maybe someone else can answer that question. Also, I want to point out that while Belgium, Sweden and Austria are doing ok, there is no way to compare their numbers per capita with the leading countries were incentives have been absolutely massive (read worth over 100% of the car).
 
Belgium also has a very favourable tax regime for company cars. You'll find that most Tesla's sold in Belgium are through this scheme.

This is what I found for Belgium

"The deductibility rate for expenses related to the purchase and use of company cars is 120% for zero-emissions vehicles and 100% for vehicles emitting between 1 and 60g/km of CO2. Above 60g/km, the deductibility rate decreases gradually from 90% to 50%."


The Mercedes S550 PHEV qualifies for 90% deductibility.

The 2016 BMW 740e PHEV qualifies for for 100% deductibility.

20% and 30% is significant but not Norwegian massive where PHEVs get penalized for added weight vs their conventional counterparts.




schonelucht; said:
Switzerland is a rich country whose currency massively appreciated overnight (literally!) which gave everything foreign a 10-20% discount.

Swiss Franc to US Dollar
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Swiss Franc to Euro

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Germans should have an advantage no?



schonelucht; said:
Also, I want to point out that while Belgium, Sweden and Austria are doing ok, there is no way to compare their numbers per capita with the leading countries were incentives have been absolutely massive (read worth over 100% of the car).

Never said Belgium is doing as well as Norway. I said Tesla is doing really well here and it is per capita in relation to all the countries in which Tesla operates.

And I said Tesla is starting to gain traction in Sweden and Austria. Not that these are top Tesla markets.
 
I looked into Switzerland.

BEVs are exempted from 4% import tariff, partial and in some cantons complete exemption from road tax that can save a BEV owner up to 300 Swiss Francs per year, and obviously you don't pay petrol/diesel taxes which save a BEV driver roughly 100 Swiss Francs per 1k miles driven. I take it they tax electricity in Switzerland too? All in all not that great incentives.
 
In Sweden a BMW 730d starts at 898,200 sek.

In Sweden a Tesla Model S 70d starts at 854,950 sek.

In Sweden an Audi A8 starts at 828,000 sek.
I never said 70D. I said 70...
Anyway. I know they are there price wise. But for the bmw or audi you really need to add a lot of options to get a decent car. With a Tesla, not so much...
Also, the current company car taxation make a tesla affordable if you're a small business owner or can get a company car. Tye others, not so much.
 
I don't think incentives are so great in Switzerland or Sweden or Austria or Belgium that it was a no-brainer to buy a Model S. It's just a great product with a great brand image. And people who can afford it, get to know Tesla and realize just that. Either way, Tesla is an increasingly compelling brand with a compelling product which many people, even those who cannot afford it, want to have.

It's like with the iPhone. There's still many average lower middle-class folks in Europe who cannot afford to spend ~$900 on a smartphone and therefore buy cheaper smartphones of Huawei, Samsung or less known brands. Or they get the 5s or a used 5 or 4s.

Therefore, I think there's zero chance that Tesla will suffer from demand issues in the foreseeable future (~5 years).
 
I never said 70D. I said 70...
Anyway. I know they are there price wise. But for the bmw or audi you really need to add a lot of options to get a decent car. With a Tesla, not so much...
Also, the current company car taxation make a tesla affordable if you're a small business owner or can get a company car. Tye others, not so much.

You don't need to add a bunch of options to a 7 Series or Audi A8 to get to a base Model S.

That contention borders on the absurd.

The luxury levels of materials,fit and finish can't currently be reached by Tesla.

Tesla's ace in the hole is "free long distance travel for life" included in the base price.

BMW ,Mercedes,and Audi also offer rather large discounts off MSRP especially to business customers, Tesla not so much.

And you can get a German car that gets favorable tax treatment.
 
It has been going on 5 years now and EVs have slowly ramped up in sales. But sales certainly should not be hoping for a future that heavily relies on these subsidies (ie. schemes). To be fair, the industry has begun and companies are building cars. Cost of scale of EVs is definitely not there yet (until brand-models reach 100,000 per year, scale is not there yet). But once scale is reached, input costs should be smoothing out and going down and subsidies should be lifted. We all know that if a subsidy is in place, the MSRP of the product benefitted by the subsidy can be raised by that subsidy. It is the "retail way" - wholesale price plus profit motive = selling price. We also know Telsa has stated a quite large Gross Margin on the Model S. As such, there is room to lower the price - in order to create an economic demand cycle. Lower price = more demand = more sales. The only way I see EVs growing in sales is to lower the prices at least as much as the biggest market's subsidy. that means everything from Leaf to Volt to Model S and X should have their prices pared by 7500 before the tax credit dissolves. Since that comes with cost of scale, Model 3 needs to be ready to be sold without incentives by 2020 at a price many can afford (and gas prices will recover and raise to cause demand).

Biggest issue are the huge incentives of Denmark and Norway. I have to wonder if they can ever drop those incentives without a big impact on EV sales. Their taxes and import costs of ICE vehicles is unnaturally huge. It's not like 7500 tax credit like the US. It is more like a 50% tax credit if we were to look at it this way in the USA. The only way to match it here is to change our fed tax rebate. We now see that businesses are being said to be able to take $25k tax credit for the heavier Model X if they use the old credits available from 10+ years ago (the Hummer credits).

I am a big advocate of trying to get input costs down on EVs to get their prices lowered in order to get more people interested. However, here in the USA, the biggest hurdle is our low gas prices (economic decision point) and the nasty dealerships who know an EV sold is equal to a loss of a few hundred to $1000+ loss in future service for that vehicle. Low # of brake jobs, oil changes, thrown timing chains, oil leaks, etc. Biggest hurdle is the NADA, dealerships and mis-construed public education on the topic (or lack of).
 
It seems to me the big "incentives" of NO & DK are similar to the relief one would get from no longer hitting self over the head with a hammer.

In those countries, all cars are hit with shockingly penalizing taxes -- with the present exception of electric vehicles, which are sold more or less at actual price or at least more mildly taxed. That exception not really a subsidy, as I see it. But it does contribute to the sales of those cars!
 
It seems to me the big "incentives" of NO & DK are similar to the relief one would get from no longer hitting self over the head with a hammer.

In those countries, all cars are hit with shockingly penalizing taxes -- with the present exception of electric vehicles, which are sold more or less at actual price or at least more mildly taxed. That exception not really a subsidy, as I see it. But it does contribute to the sales of those cars!

To be honest, I don't mind. As these "absurd" taxes/fees help get many of the other aspects of the country going really well. Also, keep in mind that neither Norway nor Denmark has any domestic car industry, so penalizing a "foreign" product is not really that bad if the substitute is a national product (at least from a nationalistic point of view). Also, since health care is paid for by the state, they have a natural incentive to have a healthy population which is clearly contributed to by encouraging people to ride their bikes (as they do here in CPH). I believe I read some time ago, that Copenhagen did some calculations and come up with about 1 USD of health-care cost savings for every 1km bike ride / day for each of the inhabitants. In light of that, they invested heavily into safe, convenient and comprehensive bike infrastructure and frankly, I love it! This is the only country I ever have seen having multi-lane bike paths...

Anyways, I agree with you that you could argue that it is not really a "subsidy" in the classic sense and merely a tax incentive.
 
We seem to be very much in agreement. Although IIRC Norway had a budding domestic electric car industry some years ago, which fizzled out, and that's where the incentives originated. That those are still around is serendipitary and very good for present electric car vendors.

I only wish my Swedish (partly Green) gov't would stick to its promises and deal some more carrots (for green cars) along with all the sticks (added tax penalty for fossil fuels). All their talking hot air could run a few windmills ... :wink:
 
The Hummer $25k tax incentive is a business tax deduction not a credit or rebate and can't be combined with the personal $7500 tax credit. Which amounts to the same thing, $7500 off your tax bill. The difference is this incentive does not have a sunset provision.

Regarding making people walk or ride bikes through the tax code; the freedom to be perfect is no freedom at all.


In the name of reducing government healthcare cost governments can force you to give up salt, fats, meats, tobacco,sugar etc. How about taxing television and television service;mobile phones and mobile phone service to encourage people to get off the couch and exercise?

The only thing fun to do that won't possibly be taxed is sports and sex?

Or maybe the State wants to lower rates of STDs?
 
Regarding making people walk or ride bikes through the tax code; the freedom to be perfect is no freedom at all.

In the name of reducing government healthcare cost governments can force you to give up salt, fats, meats, tobacco,sugar etc. How about taxing television and television service;mobile phones and mobile phone service to encourage people to get off the couch and exercise?

Rob, I appreciate most of your posts, but here you clearly veer off-topic. Taxes are almost always connected with promoting / discouraging certain behaviors and from a conceptional / philosophical point of view I don't see any danger for freedom here: If a bank levies a ATM cash withdrawal charge of $1 for each time you take out money (to encourage you to take fewer times bigger amounts) - that's heralded as "a good business move" as it aligns the banks and your interest through an incentive. If a government now supports healthy behaviors to save tax payers money that's all bad?!? I lived in NYC for many many years and I hate if people start to legislate what you can/can't buy for "health reasons" - ref. Bloomberg's big soda ban. But if you align incentives, I can't see any fault with that - so I would be ok if you tax the living daylights out of oversized sugar drinks (let's ignore the practical impossibility of such an endeavor for a second).

Anyways, back on topic: Are any numbers from Norway known for October yet? I'm personally quite curious how DK did this month, too. I heard rumors that Tesla DK ordered a large number of "typical configurations in typical colors" before the change of the law was decided to allow for a large number of deliveries until the end of the year. Let's see how that will unfold.
 
If a bank levies a ATM cash withdrawal charge of $1 for each time you take out money (to encourage you to take fewer times bigger amounts) - that's heralded as "a good business move" as it aligns the banks and your interest through an incentive. If a government now supports healthy behaviors to save tax payers money that's all bad?!?

Difference is it is very easy to switch banks.

Much more difficult to switch countries.



BTW Pot meet kettle.