Luxury Car Tax

[WannabeOwner]

In that case it's pointless on a £100k ca

When I bought mine the only 200 mile EV was a £100K car ...

The Grant (which was £7,500 back then I think) didn't sway my purchase, but I'm sure I had some feel-good-factor when buying something 3x what I normally pay for a car. Government gave me a bunch of other freebies too - company purchase first-year-write-off benefit, cheap BIK (gone back up again momentarily, but coming back down again soon), no congestion charge ...

If people had not bought that car, then, arguably that would have slowed adoption/progress ... but yeah I'm sure economists argue Black-is-White on all this, backwards and forwards amongst, themselves

Either way, we are now at a point where £100K 200 Mile Range car purchase is definitely a luxury item, and we are in the slight catch-22 where the entry-level 200 mile range car is also, just, in the luxury bracket.

I see no point to penalise people who must have 200 mile range car (for work) ... but Rules is like that. I have no defence driving past a school at 50 MPH in a 30 zone just because it is 3 O'Clock in the morning and no one is awake ... Battery Cars are more expensive than ICE, we want ICE gone in a couple of decades, so some continued support of EV is needed IMO.

... in Austria, I think???, EV drivers have been getting off the speeding fines when the reduced-limit was to prevent Smog/pollution

 

[Subevo]

I see that in Canada Tesla had specced a tax-busting low capacity battery option. Looks like not enough thinking about option pricing for the UK has been done.[/QUOTE]

That is what I’m getting at if Tesla can make a workaround for the Canadian market why couldn’t they do it for the uk.

 

[WannabeOwner]

That is what I’m getting at if Tesla can make a workaround for the Canadian market why couldn’t they do it for the uk

Perhaps my earlier answer was not clear:

Luxury Car Tax

I don't think current models would do. Tesla would have to sell loss making vehicles to achieve that, whereas in Canada they offer the loss making vehicle but no one in their right mind is going to buy it BUT just the presence of such a model in the RANGE is enough that the whole range qualifies for subsidy.

Which is right of course. If base model qualifies the one with Metallic Paint ought not to be excluded

But that si the Canadian situation, the UK one is different and its solely based on PRICE, so Tesla would have to make a car, with no options (i would hazard no "just flash a credit card options" either), that was below that price.

 

[Dangerous Fish]

... in Austria, I think???, EV drivers have been getting off the speeding fines when the reduced-limit was to prevent Smog/pollution

Now THAT'S a good idea.

 

[Lasairfion]

Currently resale figures are showing that EVs with under 200 miles of range are losing value whereas those with more than 200 miles of range are holding their value. Penalising the cars that have that range and are therefore more expensive because of battery costs is kind of putting the kaibosh on having the government grant for EVs as an incentive in the first place. I think that's where the argument is here.

Yes, Teslas are kind of fancy (BMW, Merc, Audi and their ilk as competitors) but most EVs with decent range are going to end up above the luxury vehicle tax threshold and it makes more sense to adjust that threshold for EVs due to the expense difference we currently have between EV and ICE vehicles of comparative trim-level.

This odd 'give with one hand, take away with the other' is only made all the more humorous by the new push by the government's committees to accelerate banning petrol/diesel new car sales by an even earlier target of perhaps 2030. If they want to be serious about this so called climate emergency, then perhaps they should do better in offering incentives and infrastructure to enable more to purchase EVs.

 

[LukeT]

Currently resale figures are showing that EVs with under 200 miles of range are losing value whereas those with more than 200 miles of range are holding their value. Penalising the cars that have that range and are therefore more expensive because of battery costs is kind of putting the kaibosh on having the government grant for EVs as an incentive in the first place. I think that's where the argument is here.

Yes, Teslas are kind of fancy (BMW, Merc, Audi and their ilk as competitors) but most EVs with decent range are going to end up above the luxury vehicle tax threshold and it makes more sense to adjust that threshold for EVs due to the expense difference we currently have between EV and ICE vehicles of comparative trim-level.

This odd 'give with one hand, take away with the other' is only made all the more humorous by the new push by the government's committees to accelerate banning petrol/diesel new car sales by an even earlier target of perhaps 2030. If they want to be serious about this so called climate emergency, then perhaps they should do better in offering incentives and infrastructure to enable more to purchase EVs.

Although I wouldn't try to deny a Tesla is a luxury this unfairly penalises EVs. The govt seems to be missing the point, as so many do, that someone who can just afford a £40k EV could not afford a £40k ICE car. Purchase price is not everything. Not only that, many of us are massively increasing how much we'd spend on a car for the pure reason it's an EV, where our shift to EV is for environmental reasons, in a time when such new tech is expensive.

Also disappointing I think that this on the surface progressive tax is in fact a regressive one on any 2 comparable cars except 2 that just straddle the threshold.

And frozen fuel duty for so many years tells us a lot about our recent governments' views on emissions.

 

[WannabeOwner]

frozen fuel duty for so many years tells us a lot about our recent governments' views on emissions.

That SO annoys me ... but I don't think it is the governments view (UK has done better than most on addressing climate change [still not enough ... but]). I reckon it is all about the transport industry lobby on government for operating costs.

If you want to take something away (ban a weedkiller / pesticide) you really need to be able to offer an alternative, of come sort.

So perhaps rather than tax transport industry, thereby inflating cost of all goods, perhaps subsidise BEV construction within our shores.

Not much wrong with the Jag iPace (except rapid charging, but that aint Jag's fault)

 

[Lasairfion]

The government should be falling over itself to attract EV factories here. I mean Tesla is pondering a European Gigafactory, for pity's sake. Why on earth are we not offering them a massive tax break? [Note: yes, sort out Brexit first]

 

[banned-66611]

The government should be falling over itself to attract EV factories here. I mean Tesla is pondering a European Gigafactory, for pity's sake. Why on earth are we not offering them a massive tax break? [Note: yes, sort out Brexit first]

Well they aren't going to build it here until brexit is sorted out, and that will still take a couple more years minimum to thrash out the final trade deal and customs arrangements.

The main issue for location is going to be finding a partner to build it with. Tesla can't just build a battery factory because all the technology belongs to Panasonic, and so does most of the know-how and industrial process experience. So they will need to find another partner, probably a European one, and then they will have their own ideas about where they want the factory to be.

If one does get built I imagine it will be a generic factory that supplies other manufacturers too, and will probably be turning out pouch cells too. Other battery manufacturers aren't going to make the same mistake as Panasonic and get locked in to supplying just Tesla at whatever price Tesla deems fit to pay.

I expect shipments from China will ramp up a lot too, although again mostly pouch cells. I imagine Tesla will start using pouch cells for some models... I wonder if the 100kW charging limit on the SR+ could be in expectation of that.

 

[WannabeOwner]

Could invest solely in the Research side, so we become a leader in the technology (and Intellectual Property). After all, we Brits hate getting our hands dirty actually making anything these days ...

Cheap Pound, after Brexit referendum vote, had money flooding into the UK for investment into research

 

[googlepeakoil]

Few things have changed in the UK overnight.
Std range plus UK price has just come down to £36490. This puts the list price at £39990. BELOWWWWWWW the luxury tax threshold of 40k which means no 5yrs x£320 road tax. Also the white multicoat is now the standard colour. So as long as you tick no options or extras then the car is a better deal now. Feel sorry for anyone who ordered in last 3 months - but then you've had the luxury of being the first in your street with a model 3.
Think this is enough for me to order one finally - though I am disapointed to not have a hatchback! Wonder if someone will do a Truckula conversion to a hatchback!

 

[Wicko87]

Few things have changed in the UK overnight.
Std range plus UK price has just come down to £36490. This puts the list price at £39990. BELOWWWWWWW the luxury tax threshold of 40k which means no 5yrs x£320 road tax. Also the white multicoat is now the standard colour. So as long as you tick no options or extras then the car is a better deal now. Feel sorry for anyone who ordered in last 3 months - but then you've had the luxury of being the first in your street with a model 3.
Think this is enough for me to order one finally - though I am disapointed to not have a hatchback! Wonder if someone will do a Truckula conversion to a hatchback!

You have to take into account the delivery fee, which even for the SR+ in white pushes the price to over £40k so no tax break. I have one on order and they will reinvoice at lower price so those who have ordered but not delivered are not penalised.

 

[Rooster6655]

The whole thing could be solved with SR+ if they had just reduced the price and took off Autopilot and had it as an additional upgrade instead of reducing it with Autopilot.

Everybody would be happy to pay £3999k+2k ap rather than pay £41k + £1.6k tax, giving an extra £1k to Tesla. their bean counters should have worked this out with the customer in mind, perhaps they just hired the price manager for the Leaf+Pro Pilot prices

 

[MrBadger]

Or get a cheaper EV? Other cheaper EV's are on the market with similar/better range and just as hard to get hold of as a Model 3. I didn't think so, cos people want a Tesla and I would think Tesla like being in the luxury sector.

 

[Jason71]

The whole thing could be solved with SR+ if they had just reduced the price and took off Autopilot and had it as an additional upgrade instead of reducing it with Autopilot.

Everybody would be happy to pay £3999k+2k ap rather than pay £41k + £1.6k tax, giving an extra £1k to Tesla. their bean counters should have worked this out with the customer in mind, perhaps they just hired the price manager for the Leaf+Pro Pilot prices

The whole pay later to access factory installed hardware will be an interesting one for HMRC/DVLA to deal with. Factory installed options are supposed to be considered part of the list price for tax purposes so they might come to consider this an attempt to dodge tax. In theory they could try to include the value of Autopilot/FSD in the list price calculation even if you cannot access it. I don't think it has ever happened before so their systems / processes are not geared up to deal with it but as this sort of thing becomes more common they will have to decide how they treat it both from a BIK and VED point of view. Hopefully it will be a few years before they start to worry about it.

 

[Rooster6655]

Or get a cheaper EV? Other cheaper EV's are on the market with similar/better range and just as hard to get hold of as a Model 3. I didn't think so, cos people want a Tesla and I would think Tesla like being in the luxury sector.

Model 3 limited availability is temporary as they have only started delivering in the past month, in 6 months time it will be different for Tesla but all the others will still have wait lists.

The whole pay later to access factory installed hardware will be an interesting one for HMRC/DVLA to deal with. Factory installed options are supposed to be considered part of the list price for tax purposes so they might come to consider this an attempt to dodge tax. In theory they could try to include the value of Autopilot/FSD in the list price calculation even if you cannot access it. I don't think it has ever happened before so their systems / processes are not geared up to deal with it but as this sort of thing becomes more common they will have to decide how they treat it both from a BIK and VED point of view. Hopefully it will be a few years before they start to worry about it.

Its not really a tax dodge in terms of Vat as that is still being paid, AP is only included to increase their margins, it used to be separate until a few months ago. The BIK point is a fair one the only thing is that when purchasing the products after install they are usually at least 20% more ie previous AP and FSD prices.

 

[Jason71]

The BIK point is a fair one the only thing is that when purchasing the products after install they are usually at least 20% more ie previous AP and FSD prices.

I was meaning the BIK and the ART ( luxury tax) rather than VAT and yes at the moment you have to pay more so its not a viable way to reduce your overall costs, but in future it could be...
In Canada Tesla do a software range restricted version of the M3 because the list price of the range of vehicles has to start below a certain threshold to quality the whole range for a subsidy. its limited to 150km! and its not clear that they will let them be unlocked later.
BUT
Imagine Tesla did that in the UK! they could call it the SR- sell it for below the ART threshold then allow it to be software unlocked for the equivalent (or a little more) to the price of an SR+ which is above the ART threshold. Everyone's a winner, Except DVLA/HMRC.
Is that really any different in principle to the FSD software upgrade? buy it upfront and it raises your list price/BIK as a company car driver. Buy it later and it doesn't. Sooner or later the Tax authorities are going to start taking an interest.

 

[Asterix187]

Does it really matter? You’re getting £40k car and people are complaining about £300 a year (from year 2). Just get the car and pay the tax.

 

[Rooster6655]

Buy it later and it doesn't. Sooner or later the Tax authorities are going to start taking an interest.

I can't see this being a concern anytime soon, but they could prove me wrong!

 

[banned-66611]

Of more interest than the potential tax dodge is Tesla's PCP rates. They are actually better than Nissan and Kia at the moment, surprisingly. The car may cost more but the monthly PCP rate will be lower than a Leaf 62 or Niro now.