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The Dreaded Exchange Rate (CAD/USD)

Discussion in 'Model 3' started by Pieter Knispel, Jan 15, 2017.

  1. Pieter Knispel

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    I am becoming increasingly concerned about the state of the CAD/USD exchange rate, and the impact on the price of the Model 3. If market projections are correct, the 35k USD may be 46-49K CAD, by the end of the year.

    I believe that GM doesn't use a straight exchange rate when it comes to the price of the Bolt, but are there any indications of Tesla updating how they price their cars in other currencies? I think they use a quarterly updated exchange rate, but this is really going to kill my dream of getting some of the options I am hoping for.

    Given this, two key questions:

    1) Are there any indications of Tesla updating their policy on pricing in other currencies, such as GM does with the Bolt?
    2) Are there any fellow Canucks or other folks in non USA countries who have a solid approach on how to hedge against the difference between their currency, and the USD?

    Any info, tips and advice would be appreciated!

    Thanks!
     
  2. JeffK

    JeffK Well-Known Member

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    You should be more concerned with Trump, NAFTA, and Canada's response if NAFTA is dissolved.

    If you had the cash and you are worried about the exchange rate and you are sure the projections are correct, then why not do the exchange now?

    As far as pricing based on currency... no. see the British price increase due to the exchange rates..
     
    • Like x 1
  3. Pieter Knispel

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    Thanks Jeff! I hadn't even considered the impacts of Trump, NAFTA, etc, now I'm even more worried!

    I don't have the cash at the moment, so can't just buy the USD outright now, but do have the ability to borrow the funds... just not sure what the best approach is right now! Appreciate the input and details on the GBP!
     
  4. melindav

    melindav ☰ reserved

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    In my mind, the quarterly updates are pretty fair for all. if the exchange rate fluctuates to the point you are rethinking buying, why should tesla instead keep the price set and make less money on each sale to that market? Or on the flip side, would you want to see the exchange rate could have significantly brought the car price down, but they had fixed prices and tesla made more on cars to that market instead of lowering the price for the buyer?
     
  5. Pieter Knispel

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    I don't disagree at all about the fairness factor, I understand why they're doing it and how they do it... I don't know if the difference is that GM had plants in Canada, and is a little more established (here) so that they hedge against the currencies more to ease them during fluctuations such as this? It's a curious question, but I don't begrudge them for the stance... a less profitable Tesla might not exist, and I want them to continue to exist!
     
  6. int32_t

    int32_t Tesla Spotter

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    I thought Trump was a good thing for the Canadian dollar! :confused:

    Dollar's up today ... hope it keeps going up.
     
    • Like x 1
  7. sitter_k

    sitter_k Member

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    Nope he's not good for the Canadian dollar.
    If devaluing is good for the economy then maybe he's good for the Canadian economy if he doesn't end it significantly change NAFTA.
     
  8. sitter_k

    sitter_k Member

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    *End or significantly change NAFTA
     
  9. Jleafs

    Jleafs Member

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    It's not so much Trump as it is interest rates starting to drift apart. BOC seems intent on maintaining rates or possibly even cutting them, whereas the US Fed has signalled coming increases.
     
  10. DavidP

    DavidP Member

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    If we take a look at the actual prices (CAD) of the competitors, in the same ''class";
    • Audi A4 = 38 500$
    • BMW 320i = 40 000$
    • Mercedes class C = 44 000$
    • Chevrolet Bolt = 43 000$
    Can they really sell the Model 3 really higher than 45K?...not sure.
     
    • Informative x 3
  11. Matthew Lock

    Matthew Lock Member

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    I am concerned about the exchange rate and I honestly made the reservation anticipating that it would improve by the end of the 2-3 year wait.

    I also firmly believe that President Trump will be a good thing for Canadian dollar/economy. Therefore I am hopeful for my Model 3 future!

    Trump took aim at the "North American Free Trade Agreement", which is what includes Mexico. The "Free Trade Agreement" existed before that and was between Canada and the US only. I would say that it will stay fairly intact.
     
    • Like x 1
  12. internalaudit

    internalaudit Member

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    Quite possible because outside of the Bolt, the others don't get the $14k EV incentives available in Ontario.
     
    • Helpful x 1
  13. int32_t

    int32_t Tesla Spotter

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    I'm itching to see the local 3 pricing so I can plan my financial outlook ... how poor am I going to be? :eek:
     
    • Funny x 1
  14. sitter_k

    sitter_k Member

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    You sure it Will it be available still?
     
  15. internalaudit

    internalaudit Member

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    The only thing certain in life are death and taxes. If the Liberals are still in power, then most probably.

    If the rebate is gone, I will postpone my car purchase and will wait it out and see what the competition will offer. I am only going to rush if the rebate is intact and would rush even more if there were tax exemptions.
     
    • Like x 2
  16. Falkirk

    Falkirk Member

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    I'm counting on the incentive otherwise I just can't stretch that much to get the 3, even the base price in CAD is going to be the most expensive car I've bought and I really don't want it without a few options. I'm hoping the rebates and dollar help get this dream car, can't wait to go electric with Tesla. Even my young kids are starting to think about gas and what other options we have now!
     
  17. internalaudit

    internalaudit Member

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    Well we got a 2016 RAV4 Hybrid last January and even at 1.49% financing, it was still around $50 k with a 7-year/160k km extended warranty so this Model 3 with dual motor and winter package may cost less with the rebate. :)

    There's been calculations done and the Model 3 driving cost (electricity) is about half of the RAV4 and a little more than half than our other cars (based on Toronto gasoline and electricity prices) so it's really not that big off a difference for those who drive smaller displacement cars (at 20k km, maybe $800-1k difference). Depreciation will almost always be the biggest issue the first few years and then maintenance costs thereafter.

    The reason why I would like the $14k rebate before proceeding with a Tesla purchase is we are not even sure how reliable (and cost to maintain) this car will be (after the warranty period ends) compared to a more staid Honda or Toyota (whose costs to maintain are quite low if you can DIY some of the basic stuff) and the 4-year extended warranty (to be bought before the 4-year factory ends) may bring another $3-5k.

    Another thing is that financing seems to be solely through Scotia Bank and it's been like 3.5% where many other car financing arm are getting to 0-2%.

    For these reasons, I want to get the $14k as a buffer for unknown maintenance costs 4 or 8 years down the road. Without the rebate, I will just sit it out and wait for other competing offerings because that's the most sensible thing to do.

    Tesla better produce the Model 3 fast enough and with above average assembly quality. :)
     
    • Informative x 1
  18. sitter_k

    sitter_k Member

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    One is invariably tired to the other. Interest rates are tied to the strength of the economy, NAFTA is important to Canada's economy, Trump says free trade and NAFTA is a disaster as other countries benefit and America loses out, maybe he just meant the Southern part of NAFTA...He says it's going to be America first now, let's see.
     
  19. sitter_k

    sitter_k Member

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    "Liberals or no rebate, Kathleen Wynn or no rebate...?"
     
  20. internalaudit

    internalaudit Member

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    Sorry, I don't get your question.

    As long as the Liberals win the 2018 Ontario elections, I suppose the EV incentive will remain in place. The party made it up. If they lose, then the Conservatives make them that away.
     

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