Taking Delivery in California out of Market Action

[lklundin]

Tesla has yet to have direct sales in TX, MI etc and can adopt some form of dealer distribution almost overnight so sales in those States can multiply.

On the topic of the now-ongoing delivery-challenge:

Regardless of what kind of presence Tesla has in the home state of a given buyer, wouldn't it make sense for Tesla to encourage the buyer to pick-up their car directly at the Fremont factory ?

I am aware of Tesla's no-bargaining policy, but they could waive or reduce the destination fee for people who agree to pick-up their vehicle themselves, reducing Tesla's logistical challenge of getting all these new cars delivered.

With the joy buyers show when getting their car, I could imagine quite a few who would inaugurate their Tesla experience with a not necessarily short drive home.

 

[Big Earl]

On the topic of the now-ongoing delivery-challenge:

Regardless of what kind of presence Tesla has in the home state of a given buyer, wouldn't it make sense for Tesla to encourage the buyer to pick-up their car directly at the Fremont factory ?

I am aware of Tesla's no-bargaining policy, but they could waive or reduce the destination fee for people who agree to pick-up their vehicle themselves, reducing Tesla's logistical challenge of getting all these new cars delivered.

With the joy buyers show when getting their car, I could imagine quite a few who would inaugurate their Tesla experience with a not necessarily short drive home.

I live in Northern Virginia and I'd be interested in doing that, combined with a factory tour.

 

[ggr]

On the topic of the now-ongoing delivery-challenge:

Regardless of what kind of presence Tesla has in the home state of a given buyer, wouldn't it make sense for Tesla to encourage the buyer to pick-up their car directly at the Fremont factory ?

I am aware of Tesla's no-bargaining policy, but they could waive or reduce the destination fee for people who agree to pick-up their vehicle themselves, reducing Tesla's logistical challenge of getting all these new cars delivered.

With the joy buyers show when getting their car, I could imagine quite a few who would inaugurate their Tesla experience with a not necessarily short drive home.

Unfortunately California has a stupid law that if you take delivery in CA you owe state sales tax to CA, even if you immediately drive it out and register it somewhere else. There was an effort a year or two ago to get that law changed, but it foundered.

 

[lklundin]

Unfortunately California has a stupid law that if you take delivery in CA you owe state sales tax to CA, even if you immediately drive it out and register it somewhere else. There was an effort a year or two ago to get that law changed, but it foundered.

Right, so for states with a lower sales tax, Tesla would have to consider if a higher discount would be possible.

Also, a pick-up from a buyer with a home state denying Tesla a dealership permit would send a strong signal that that state is missing out on its own sales tax. So in the case of those about one dozen states, this would be extra appealing.

 

[Joe F]

Unfortunately California has a stupid law that if you take delivery in CA you owe state sales tax to CA, even if you immediately drive it out and register it somewhere else. There was an effort a year or two ago to get that law changed, but it foundered.

Should be an easy solve: Tesla could pay one to "deliver" the vehicle, you know, as a transport service. I'd accept $1.00 as payment.

 

[jhm]

Should be an easy solve: Tesla could pay one to "deliver" the vehicle, you know, as a transport service. I'd accept $1.00 as payment.

Maybe Tesla could just truck them up to Sparks, NV, as a return trip for battery pack. (I know this is not exactly an auto carrier so it can't optimize the return trip, but the return trip is pretty much a sunk cost for Tesla anyway.)

 

[Joe F]

Maybe Tesla could just truck them up to Sparks, NV, as a return trip for battery pack. (I know this is not exactly an auto carrier so it can't optimize the return trip, but the return trip is pretty much a sunk cost for Tesla anyway.)

Good idea too, but neither would work due to the car not being registered or insured. Was more wishful thinking out loud.

 

[Curt Renz]

Despite TSLA fading heavily during the final two hours of trading, this thread for "Market Action" has become hijacked by discussions that would be far more appropriate in the "General - Investor" thread or even better in the "Tesla, Inc." forum.

 

[jhm]

Good idea too, but neither would work due to the car not being registered or insured. Was more wishful thinking out loud.

Why would it need to be registered and insured? This is just Tesla moving inventory internally. The transaction with the customer happens in Nevada.

 

[Joe F]

Why would it need to be registered and insured? This is just Tesla moving inventory internally. The transaction with the customer happens in Nevada.

True. Was more thinking my option and shouldn't have said neither would work. Never having purchased out of state, I don't know how registration works. Can't get it registered or insured before purchase so it would have to be driven home without a plate. I guess insurance, depending on policy, shouldn't be a problem as I'm covered regardless of the car I'm driving. Stupid CA law.

 

[madodel]

Right, so for states with a lower sales tax, Tesla would have to consider if a higher discount would be possible.

Also, a pick-up from a buyer with a home state denying Tesla a dealership permit would send a strong signal that that state is missing out on its own sales tax. So in the case of those about one dozen states, this would be extra appealing.

In the United States you have to pay the sales tax to get title to and register to and register the vehicle. So if you don't live in California, but you pick up your Tesla there you have to pay sales tax twice unless you are registering the vehicle in California.

 

[jhm]

True. Was more thinking my option and shouldn't have said neither would work. Never having purchased out of state, I don't know how registration works. Can't get it registered or insured before purchase so it would have to be driven home without a plate. I guess insurance, depending on policy, shouldn't be a problem as I'm covered regardless of the car I'm driving. Stupid CA law.

NP. Just thinking about how to get around the CA law. Of course that lands you with whatever NV has in place.

Thinking more expansively, I do wonder if someday Tesla will set up a network of distribution hubs across the country. For example, they could have a hub in NV, UT or CO that receives all the Fremont made vehicles headed east. At the hub, the logistics to the final destination could be coordinated. It could free up having to do some much logistical work in Fremont. Just send it up the hill and work it out there.

Also anyone who want's to take delivery at a hub can get reduced delivery cost.

 

[mekberg]

In the United States you have to pay the sales tax to get title to and register to and register the vehicle. So if you don't live in California, but you pick up your Tesla there you have to pay sales tax twice unless you are registering the vehicle in California.

False. Some states, such as Wisconsin, give credit toward tax paid in other states. In the case of California, the tax rate is higher than Wisconsin so I would owe $0 when registering at home.

I know because I looked into "sticking it to the man" along with a letter to my representatives. Ultimately I decided the $2,500 wasn't worth it.

 

[tivoboy]

In the United States you have to pay the sales tax to get title to and register to and register the vehicle. So if you don't live in California, but you pick up your Tesla there you have to pay sales tax twice unless you are registering the vehicle in California.

not totally accurate, depends on the state. Washington state for example one can buy a car and if you are out of state and can prove it, then you don't pay the WA sales tax. Now, CA of course is going to require sales tax payment for any car registered as new in the state.

CA USED to have a process for people buying IN CA and taking it out of state could apply to the CA state board of equalization and such and get a refund.

Now, any tax paid on that in CA is deductible against another states and federal income taxes, but of Course now that maximum State tax and other type deductions are limited.

And, for some states it can be either a CREDIT or a deduction only.

 

[RobStark]

Also anyone who want's to take delivery at a hub can get reduced delivery cost.

I am pretty sure it is Federal law that mandates a separate line item for automobile destination charge and everyone must pay the same fee. Even vehicles picked up at the factory.

Representatives from fly over country and Senators from rural states did this so folks in rural areas would not get screwed over in delivery fees.

 

[jbcarioca]

Maybe Tesla could just truck them up to Sparks, NV, as a return trip for battery pack. (I know this is not exactly an auto carrier so it can't optimize the return trip, but the return trip is pretty much a sunk cost for Tesla anyway.)

Quite a few cars are sold and delivered in Nevada destined for other jurisdictions because Nevada has a very easy process for temporary plates. Many other States do also, but maybe none so convenient for Tesla. I do wish Tesla would begin doing that.

 

[Don TLR]

I'd love a road trip to get a new car and a factory tour, too bad for the laws..