New UK VED Charges & Impact On Model 3

[Chopper]

For those of us resident in the UK depending on how we option our vehicle we could potentially be looking at a tax cost of £1500 over 5 years when buying a new M3.

From April 2017, any new vehicle costing over £40,000 will be subject to a "luxury" car tax. Historically zero emission vehicles paid no VED. With the impact of the GBP/USD exchange rate post Brexit and ticking a few options boxes, the retail price of the M3 has the potential to creep over the £40k mark. Potentially some UK owners will be financially better off, not ticking those option boxes of those that can be enabled remotely after delivery. Obviously we don't know the base cost of the vehicle or the options packages yet but trying to do the right thing and purchasing a zero emissions vehicle could end up costing you more in tax than buying a performance ICE.

New VED road tax: all the facts on the 2017 UK car tax changes

Any UK members have any thoughts on the matter?

 

[Lokolo]

I was already on the borderline for the M3 when I reserved. Since then exchange rate has not been great, and now an additional possible tax means it's looking a lot less appealing.

Cars are already pricey in the UK as it is.

 

[Chopper]

I was already on the borderline for the M3 when I reserved. Since then exchange rate has not been great, and now an additional possible tax means it's looking a lot less appealing.

Cars are already pricey in the UK as it is.

Think many UK reservation holders will be in the same boat. By the time we see cars this side of the pond the dollar will probably be a parity with the pound meaning a £35,000 base price.

 

[Brunel]

Think many UK reservation holders will be in the same boat. By the time we see cars this side of the pond the dollar will probably be a parity with the pound meaning a £35,000 base price.

And then add 20% VAT!

 

[Chopper]

Using the Model S 60 as a comparator the base price in GBP is £64,000 inc. VAT. In the US (excluding incentives and destination fee) it is $70,000 which is an 8.5% differential, assuming the same as a fag packet calculation the UK Model 3 will cost £32,000 inc. VAT, leaving £8,000 for options before the luxury car tax kicks in. How Tesla price these options in the UK will really influence their uptake here I feel.

Auto Pilot and full autonomy can be added after delivery, I guess I can skip the high fidelity sound and go with an aftermarket upgrade, but adding 4WD, premium interior, bigger battery (assuming no factory unlockable upgrades) will soon tip you over the threshold...

 

[Jayc]

From April 2017, any new vehicle costing over £40,000 will be subject to a "luxury" car tax.

Yes we have been discussing that since the Model 3 reveal event last year:

What tax incentives exist in the UK?

Realistic price estimate - UK version.

UK Model 3 reservation holders - questions and considerations

Unfortunately, there really is no way out of it. I have personally spoken to a few Tesla UK sales people including a regional head but no one has an answer to it. Some people are even calling it a "Tesla tax" because from April, every single Model S will be affected.

Personally, I think this is just a misinformed decision taken by the government. The result is that a zero emission car will end up paying double the road tax as a heavily polluting ICE 4WD - what message is the government sending with that?

I am hoping that once this tax comes into effect, there will be heavy objections but according Tesla UK reps, they started complaining early last year but no one is listening.

Will still be getting my Model 3 but may have to sacrifice on battery capacity to stay under 40k, very disappointed with the government have to say.

 

[Chopper]

The new tax guidance freely admits that the move away from taxing vehicles on their CO2 emissions is due to new cars not paying any or very little VED as a result of manufacturers redesigning their emissions systems is based on increasing tax incomes and not any kind of environmental incentives.

Thanks for the links, I've missed those threads.

 

[rnbetsy]

Hopefully Tesla get creative with a £39,999 car with SW enabled options post-purchase..

For a start, maybe a grace period of a month to enable SW features at the same cost as it would have been when buying the car.

 

[Chopper]

I think that would be wishful thinking on the current exchange rates...

 

[Matt125]

Yikes! I'm now very worried about my Model 3 reservation.

I was expecting the Model 3 to cost around £30k, maybe even £25k when you factor in the government grant. But I was expecting to pay around £35k when adding autopilot and maybe a larger battery size.

£40k plus extra tax is out of the question, though. I'd have to cancel my reservation and wait for a cheaper Tesla.

 

[Jayc]

Actually, I had a thought on this...

Why can't Tesla UK consider splitting the price of the car and battery such that the battery component would be offered as an 8-year lease. That could knock a few thousand off the OTR price yet will essentially be the same overhead from Tesla's point of view as it already carries a 8-year unlimited warranty. Let me know if I am missing anything obvious from this argument otherwise I can put this idea forward to Tesla UK.