Luxury Tax

[Singer3000]

I recon tax on electricity to charge electric will never happen. Too easy to circumvent. Like getting solar, or charging with UMC and a commando socket. Or using a "Dumb" charger.

Tax for road usage is also a no go because it will hit trade, everything will go up in price with the tax.

they will probably milk fuel for a long while yet, 5+ years. EV adoption is less than 1% right now and if it reaches 10% by 2025 I'll be surprised. Then there is all the vans and lorries that wont be replaced for ages. There just isn't enough battery production capacity.

This luxury car tax is just an unfortunate accident for EVs due to higher battery cost.

Tax on petrol is an inefficient way of raising funds for the exchequer and is a disincentive for trade. It’s acceptable because it helps reduce pollution and congestion. If you’re only goal is to raise tax there’s far better weapons in the Treasury’s armoury.

EVs do not really carry the point of use pollution problem but they do contribute just as equally to congestion. Taxing electricity usage would be a dumb solution as it penalises the driver that drives on barely used roads the same as one that only uses heavily congested ones.

Smart road pricing is the elegant solution, already used to some extent quite effectively in a number of cities around the world. I suspect we’ll need the advent of autonomous taxis for this to be implemented in the UK nationwide, too hard a sell politically.

 

[banned-66611]

Come on, it's Tesla's fault. Their £27k car is now over £40k. They failed to get the cost down by insisting on installing stuff like the full FSD system, which isn't even finished and will need upgrading to deliver actual FSD.

£40k is a lot for a car, and the PICG is supposed to make them affordable, not just slightly less unaffordable.

 

[davidmc]

Come on, it's Tesla's fault. Their £27k car is now over £40k.

When has the Model 3 ever been £27k? You do know you have to add import duty and VAT (plus shipping) to that as standard here? Also in USA they all have to apply Taxes to the cost of the car, unlike here where it is applied to the cost we see.

Look at an iphone cost here compared to USA, approx $999 in USA and £999 in UK. same applies to that regards import duty and VAT.

 

[goRt]

Not true. Petrol/diesel and alternative fuel all subject to this additional new vehicle tax.

It is also incorrect to refer to it as luxury tax.
Vehicle tax rates

But if you drop the emotive word luxury then there's no argument and no petition!

 

[elecTED]

The cynic in me thinks Tesla may have intentionally priced the list price of the current UK entry level M3 SR+ at £41,550 (just above the luxury tax threshold) to upsell more profitable options and models. I know some may think £1600 (5 x £320) is no big deal when paying £40K+ for a new car but to me TCO was also a big factor in switching to an EV.

Also no where in Tesla.com does it state explicitly state the list price of UK vehicles excluding the PICG. I do find this lack of transparency a little irritating and confusing to those who may have been led to believe they would be saving on the luxury car tax by keeping their order below £40K. Recently Tesla have made it clearer in the pricing that the cost of the vehicle includes the £3500 PICG which was not the case in the first few weeks the order book opened!

Also, not sure why Tesla show Hire Purchase cost by deault instead of cash price of car. Even if most people are looking to finance their new car you would assume people would want to know the full cost of the car first and then the monthly HP costs.

C'mon Tesla, let's have full clarity and transparency over pricing.

 

[dan223]

When has the Model 3 ever been £27k? You do know you have to add import duty and VAT (plus shipping) to that as standard here? Also in USA they all have to apply Taxes to the cost of the car, unlike here where it is applied to the cost we see.

Look at an iphone cost here compared to USA, approx $999 in USA and £999 in UK. same applies to that regards import duty and VAT.

I think some articles that got published before hand suggested £27k, I think Elon himself said it would be £30k.

The cynic in me thinks Tesla may have intentionally priced the list price of the current UK entry level M3 SR+ at £41,550 (just above the luxury tax threshold) to upsell more profitable options and models. I know some may think £1600 (5 x £320) is no big deal when paying £40K+ for a new car but to me TCO was also a big factor in switching to an EV.

Also no where in Tesla.com does it state explicitly state the list price of UK vehicles excluding the PICG. I do find this lack of transparency a little irritating and confusing to those who may have been led to believe they would be saving on the luxury car tax by keeping their order below £40K. Recently Tesla have made it clearer in the pricing that the cost of the vehicle includes the £3500 PICG which was not the case in the first few weeks the order book opened!

Also, not sure why Tesla show Hire Purchase cost by deault instead of cash price of car. Even if most people are looking to finance their new car you would assume people would want to know the full cost of the car first and then the monthly HP costs.

C'mon Tesla, let's have full clarity and transparency over pricing.

Yep I also think they maybe could have put it as £39999, but then it would push people to have no options and might push people away from the higher models to. They could have also removed autopilot and offered it as an addon after delivery (like it was before) to avoid the tax.
The price on the website is confusing, and I have seen some of those that already have there M3 thought they wouldn't have to pay the lux tax.

 

[Yev000]

There is no SR option available, this will be under 40k. SR is about 3k less than SR+

The cynic in me thinks Tesla may have intentionally priced the list price of the current UK entry level M3 SR+ at £41,550 (just above the luxury tax threshold) to upsell more profitable options and models

I think so too.

I also think they don't want too many orders in UK due to lack of service centers.

 

[-DB-]

Come on, it's Tesla's fault. Their £27k car is now over £40k.

It was actually the media's fault. Tesla never said it would be 27K, thats what the media reported.

Musk guessed around £33k which was still a little short but it is what it is.

 

[Yev000]

Musk guessed around £33k which was still a little short but it is what it is.

No, he stated base SR is $35k. Then he said it would be available in Europe without mentioning Euro or GBP price, with 25% more cost due to taxes, and in 6 months time (probably more like 8 for UK). $35 to GBP = 27 + 35% = £35k = 33k after incentives.

I think it will be more like £35 after incentives because the SR and the SR+ are about $4k apart in US and UK SR+ is £39k

 

[-DB-]

Yes, that’s correct! Sorry didn’t get to finish my post before I hit reply!

 

[MrBadger]

When has the Model 3 ever been £27k? You do know you have to add import duty and VAT (plus shipping) to that as standard here? Also in USA they all have to apply Taxes to the cost of the car, unlike here where it is applied to the cost we see.

Look at an iphone cost here compared to USA, approx $999 in USA and £999 in UK. same applies to that regards import duty and VAT.

Actually, its been pretty close at 31500. When prices first announced, I called Tesla for approx. UK pricing. Whilst they could not give anything firm, they did offer up the (now irrelevant) nugget that had base $35k model been priced up exactly as they were then selling S and X, UK equivalent price would be £31xxx. I'm not sure if that was OTR or with/without gov grant, but it would have been equivalent to the windscreen price, at that point in time, as would have been showing on the windscreen as an S or X - ok I know its an electronic display not a windscreen.

As mentioned, since specs were announced, Tesla have added AP, most of the premium interior and in case of the LR, AWD. It was always going to be hit and miss whether a LR (RWD) would come on in inside of £40k or not, but in the end, Tesla added options and the price went up, and up... added close to £10k on the figure we originally had in our head, but we got no choice on AP (at £2k probably would have spec'ed any way), premium interior (quite possibly would have gone for it for glass roof and console), AWD (in two minds about wrt loss of range vs 1 day a year winter usage).

So yes, Tesla did bring it on themselves by forcing options on people and increasing prices from the original mid 2017 pricing and specs.

 

[Rob R]

The cynic in me thinks Tesla may have intentionally priced the list price of the current UK entry level M3 SR+ at £41,550 (just above the luxury tax threshold) to upsell more profitable options and models. I know some may think £1600 (5 x £320) is no big deal when paying £40K+ for a new car but to me TCO was also a big factor in switching to an EV.

Also no where in Tesla.com does it state explicitly state the list price of UK vehicles excluding the PICG. I do find this lack of transparency a little irritating and confusing to those who may have been led to believe they would be saving on the luxury car tax by keeping their order below £40K. Recently Tesla have made it clearer in the pricing that the cost of the vehicle includes the £3500 PICG which was not the case in the first few weeks the order book opened!

Also, not sure why Tesla show Hire Purchase cost by deault instead of cash price of car. Even if most people are looking to finance their new car you would assume people would want to know the full cost of the car first and then the monthly HP costs.

C'mon Tesla, let's have full clarity and transparency over pricing.

They reissued all invoices to exclude the grant (without telling people what they were doing), thus confusing people into thinking they were unilaterally raising prices by £3500.

 

[banned-66611]

When has the Model 3 ever been £27k?

When it was first announced a lot of people took the $35k, converted to £, added VAT and subtracted the PICG which was £5k back then.

The exchange rate was around 1.3 back then, so 35/1.3 = 26.9k, add 20% VAT = 32k, subtract 5k PICG and you get a £27,000 Tesla.

Okay, there will be extra costs, maybe a few thousand on top? So a £30k Tesla?

Then it comes out and the cheapest one is over £40k. The SR isn't even available to order.

And for some reason people are moaning about the luxury car tax when it's Tesla that screwed them really.

 

[Yev000]

Okay, there will be extra costs, maybe a few thousand on top? So a £30k Tesla?

For tax purposes that would have been a 35k Tesla not a 30k Tesla. Which is what it will be close to when SR is available.

And for some reason people are moaning about the luxury car tax when it's Tesla that screwed them really.

That implies some deception on the part of Tesla to make people order a cheaper car then presumably making it more expensive so that UK gov have have the tax?

Seeing as that didn't happen, not sure why you think they are screwing people.

The conversation is about the tax being fair to EVs as they are more expensive than ICE equivalents without adding much in the way of "luxury".

 

[WannabeOwner]

Tax for road usage is also a no go because it will hit trade, everything will go up in price with the tax.

I assume that Fuel Duty would be removed, and Road Usage Tax put in its place, and on that basis "no difference" (so to speak) and no barrier to trade.

I am also confident that the Government Managed Computer Contract to implement this will run smoothly, not go over budget, and the instant switch over at midnight will be problem free ...

More likely EVs could have Road Usage Tax starting "Whenever", and then as people moved from ICE to EV they would switch from Fuel Duty to Road Usage Tax.

No doubt there would be some debate about the difference in price between the two ... and whether Fuel Duty includes an Emissions-Tax component, and EV Road Usage Tax doesn't ... I expect we'll all get screwed over at that point

 

[NorfolkMustard]

Opinion: We’re definitely in for higher rate tax on high-amp/high-kWh home charging in the near future. Hence: "To monitor and record energy consumption, and be able to transmit this." in the new OLEV home chargepoint grant requirements.

 

[ItsNotAboutTheMoney]

Opinion: We’re definitely in for higher rate tax on high-amp/high-kWh home charging in the near future. Hence: "To monitor and record energy consumption, and be able to transmit this." in the new OLEV home chargepoint grant requirements.

That's not for tax, it's for smart charging and maybe V2G.

The UK government is trying to get the EVSE capabilities in place ahead of time.

If successful, BEVs will add a lot of demand to the grid. Unmanaged it could add a lot of peak demand and therefore cost. But managed well, it would _lower_ costs.

For AC charging the time available is almost always much greater than the time required to charge. That leaves room for smart management of charging to match demand or production as required.

 

[MrBadger]

From my understanding:

The smart charger will be to allow it to charge when electricity capacity is there, and not when capacity is limited. It may also increase local diversity ie staggering charge patterns to flatten local usage.

The smart meter will be to disincentivise electricity usage when capacity is low and to incentivise consumption when capacity is plentiful.

No taxation of EV charging through these mechanisms other than as a side effect of variable pricing.

Road usage will be taxed on time and use. Those that use vehicles the most and/or at the most congested times or routes will pay the most. I believe that the technology is already in place to do some of this now but I suspect it needs to be rolled out further. I have also heard that there will be something in the windscreen that will also be ‘monitored’. You only have to look at the speed of rollout of some infrastructure projects, such as LED street lighting, to see how quick some initiatives can be deployed - or to look at others, such as smart meters, to see how unpredictable some of these rollouts can be.

I’m pretty certain this is a matter of when not if. Some may well come in via stealth, or by dangling the carrot before revealing the stick. I’m looking at smart chargers and smart meters respectively here. I suspect variable road pricing could be phased in, it effectively started by the introduction of continuous licensing, ie taxed or declared sorn.

 

[ACarneiro]

I don’t like having a meter dictate when I can charge my car or, “ad absurdum”, risk having no charge in my car at all because that one night everyone else decided they wanted to leave their immersion heaters on...
Quite happy with Economy7 and will resist Smart Metering for as long as I can...

 

[elecTED]

...everyone else decided they wanted to leave their immersion heaters on...
Quite happy with Economy7 and will resist Smart Metering for as long as I can...

Everyone leaves their immersion heaters on cos ‘smart meters’ are actually dumb meters.

True ‘smart’ meters would also be able to calculate how much you export back to the grid with excess PV production and it would probably no longer make sense to leave immersion heaters on.

I too am holding off smart metering until such point it’s forced or the export of excess PV is accurately calculated.

Also we buy from the grid at say 16p per unit and sell back (approx half of production) at around 5p per unit. How does that work?