Washington State caps sales tax exception for EV's at 35k - will this affect you?

[Big-T]

I don't know how many Series 3 buyers are coming from Washington, but based on the sheer number of Toyota Prius' Nisan leafs and Model S' I see on the road every day on my commute (not to mention the two tesla dealerships and multiple stores with EV charging stations in their parking lots) I'm expecting Washington state has to be one of their their top sales states now, much less when the model 3 comes out.

Well, the local government recently made a change that changes the sales tax exception on EV's, limiting the exception to cars under $35,000. Right at the base price of a Model E..... Considering that tax in Seattle is about 10% this comes out to a $3,500 savings lost if you go over $35,000
Washington State Caps Electric-Car Incentives At $35K Price, Hitting Tesla, BMW

I expect that many upgrades could be made post purchase (Tech package, etc) My question to my fellow Model E buyers in Washington is how many of you will try to save the tax by buying the base model and then upgrading it after the fact, vs buying a more loaded option from the factory and eating the tax right away? I'm on the fence about it myself - it'll depend on exactly what upgrades are available and of course my assumption that Tesla will start the base car at $34,995.

 

[MassModel3]

Unfortunately, most upgrades won't be available post purchase. For example, the tech package on the Model S actually has different hardware. I don't know if the necessary wire bundle is built into the every car regardless of whether it gets tech, but I'd think not since that would be a wasted expense for Tesla. The sunroof, the leather, the console finish, the motors, etc, can't be upgraded without considerable expense, if at all. It certainly wouldn't be worth saving $3,500 to have to pay immensely more later to retrofit. The wheels are about the only thing realistically upgradable after the fact without throwing away your saved dollars. Or maybe a repaint or a skin if you don't like black or white.

I hope the Model 3 does, in fact, come in at least base under the $35K cap, and it'll really suck extra for you folks if it doesn't.

 

[EVNow]

I had a thread on this question earlier ...

Model 3 and the new WA incentive cut off at $35k

I'm hoping to buy the base and upgrade if need be. If the base model completely sucks - I may get a different EV (esp. if that is available for lease easily).

I expect a big difference between 3 and Leaf 2 etc when it comes to street price. Remember with Tesla we are always paying MSRP.

 

[Big-T]

Unfortunately, most upgrades won't be available post purchase. For example, the tech package on the Model S actually has different hardware. I don't know if the necessary wire bundle is built into the every car regardless of whether it gets tech, but I'd think not since that would be a wasted expense for Tesla. The sunroof, the leather, the console finish, the motors, etc, can't be upgraded without considerable expense, if at all. It certainly wouldn't be worth saving $3,500 to have to pay immensely more later to retrofit. The wheels are about the only thing realistically upgradable after the fact without throwing away your saved dollars. Or maybe a repaint or a skin if you don't like black or white.

I hope the Model 3 does, in fact, come in at least base under the $35K cap, and it'll really suck extra for you folks if it doesn't.

If you look at the Model S order page and pick a basic 70D, the Autopilot feature shows as $2,500 OR enable for $3,000 after delivery. Historically items like supercharger access or multiple service visits have been able to be done post purchase. Considering how big the Washington State market is (and could be once the model 3 comes out) for Tesla, if they make it a priority to make the car qualify for the credit, it's possible they might make some of the other misc accessories available on the model 3 after the purchase that they don't now. I'm specifically thinking the Premium Sound upgrade and some of the wood paneling, etc. I agree though that the larger items won't be negotiable - to get the $35k car I'll have to get a rear wheel drive, hardtop version in a basic color.

Sorry about the 2nd thread EVNow, I didn't search that far back. If a Mod wants to merge these two threads that's great with me.

 

[MassModel3]

With the new version of the base S models, notice that standard on every vehicle are automatic emergency breaking, lane departure warning, blind spot warning, and parking sensors. These items make use of the camera, the sensors around the car, and possibly the radar dish as well. If those features do use the forward radar, then the equipment is already necessary and the TACC is just a software add-on. If they don't use the radar, then perhaps Tesla decided it was easier to have one assembly line process and pay (eat the cost of) the extra hundred or so dollars for the radar hardware on the few buyers of the S who don't order that feature.

But I get what you're saying. I'm just looking at it from the perspective of an owner of a base Model S 60 with very few upgrades and wishing (really wishing!!!) I could upgrade to the tech package. For my model, the tech package added electro-chromatic and folding side mirrors, auto lock/unlock, modified lift mechanism for the trunk, navigation, and an upgraded center display with additional memory to support the navigation system. No upgrade path for any of this except NAV for more than the cost of the original tech package because the center display needs to be replaced to support it.

I hope you're right, but I fear you're getting your hopes up too high.

Edit: Elon Musk said last evening in the Model X launch event that the radar is, in fact, used for automatic emergency breaking, so the TACC is simply a software upgrade that can be done with no hardware changes.

 

[Foxhound199]

I'm just hoping the law changes by then. It was a completely ridiculous 11th hour amendment that makes no sense. Cap the max benefit so that you're not giving $10,000 off a loaded Model S? Perfectly reasonable. Making a hard cut off so that more expensive cars don't qualify at all? Stupid and counter-productive, especially considering the governor who signed it claims that promoting sustainable energy is one of his most pressing policy goals. Maybe when thinking of conventional cars, $35,000 is a good cut off to describe luxury cars. But throw in a federal credit and what you could save in gas, and you"re looking at something that could compete in affordability with civics and corollas, and a tax exemption could go a long way in helping tilt that decision towards electrics.

 

[EVNow]

The hard cut off is to prevent opposition from saying expensive cars like S get tax credit.

This kind of limit will be the norm in the future (hard or soft) - I think including for any fed extension of tax credit. Most manufacturers of EVs will have to tailor their cars and after sale packages keeping this in mind.

 

[Foxhound199]

Most manufacturers of EVs will have to tailor their cars and after sale packages keeping this in mind.

That's what I'm afraid of. Obviously I'd love for electric cars to get more affordable too, but if that means driving modified ICE subcompacts with minimal range and poor quality, they are never going to catch on at any price. However, if you make a great car with great technology that can be helped to compete with incentives, its success will invite competition and lower prices. I'd much rather see no incentives than having legislators picking and choosing which electric cars should be winners based on MSRP.

 

[saladman]

The problem is, all these features cost more post purchase.

The Dual chargers went up $500 when it went post purchase. The autopilot feature is $500 more post purchase.

Starts to to eat up that $3500 discount pretty quickly, and create a thoroughly annoying post purchase rework of the car.

just pick it up at the factory, enjoy the tour, pay California sales tax, and get Washington to waive theirs when you prove you paid equivalent out of state.

 

[Big-T]

The problem is, all these features cost more post purchase.

The Dual chargers went up $500 when it went post purchase. The autopilot feature is $500 more post purchase.

Starts to to eat up that $3500 discount pretty quickly, and create a thoroughly annoying post purchase rework of the car.



just pick it up at the factory, enjoy the tour, pay California sales tax, and get Washington to waive theirs when you prove you paid equivalent out of state.

They cost more now for buyers that have plenty of cash to burn. I guess I'm hoping they might look at the demographic of who's potentially buying a $27,500 car (after federal credit) and try to tailor some sort of package for Washington State buyers. Companies use tax loopholes all the time for their own benefit. Maybe we'll luck out and Tesla will think of something for their "poor" buyers, to help increase the sales numbers if nothing else.

Obviously it's all speculative at this point. 2-3 years from now I'll have to see where my finances are and see if I want to just load the thing up and pay $45k+ (before taxs and credits) or cheap out and get what makes sense for the least amount of money (without giving up the tech package somehow, that's not negotiable for me).

 

[MassModel3]

They cost more now for buyers that have plenty of cash to burn. I guess I'm hoping they might look at the demographic of who's potentially buying a $27,500 car (after federal credit) and try to tailor some sort of package for Washington State buyers.

I completely don't understand the implication of that sentence. Are you saying that anyone who buys a non-Model 3 Tesla (AKA: Model S) must have plenty of cash to burn? The implication is that if a user purchased a Tesla that wasn't fully loaded, and now they wanted to add a feature, they must have plenty of cash to burn. If that was the case, wouldn't that owner have loaded it in the first place?

Or are you saying that the Model 3 will cost more for buyers with plenty of cash to burn? That, too, makes no sense since the target Model 3 buyers are those with less expendable income to throw at a Tesla. Many people will be stretching their budgets for the gotta-have upgrades.

 

[Big-T]

I completely don't understand the implication of that sentence. Are you saying that anyone who buys a non-Model 3 Tesla (AKA: Model S) must have plenty of cash to burn? The implication is that if a user purchased a Tesla that wasn't fully loaded, and now they wanted to add a feature, they must have plenty of cash to burn. If that was the case, wouldn't that owner have loaded it in the first place?

Or are you saying that the Model 3 will cost more for buyers with plenty of cash to burn? That, too, makes no sense since the target Model 3 buyers are those with less expendable income to throw at a Tesla. Many people will be stretching their budgets for the gotta-have upgrades.

Sorry I should have been more clear. I mean that as demographic I think that Model S buyers are less price sensitive than model 3 buyers will be. Tesla charges an extra $3,000 to enable Autopilot after delivery vs $2,500 to buy it at the time of the build right now.

I'm hoping they will allow options like these to be added onto the model 3 without a premium to help the Washington State buyers get around the hard $35,000 tax limit. I think it would help sell more vehicles as folks in the market for a 30k-ish car will be more likely to go with Tesla vs Nisan/Toyota/Chevy if they don't have to pay 10% tax to buy the Tesla. So for example if a Washington buyer is debating between a $33,395 volt with no tax and a $35,000 tesla but wants even just the tech package the price would jump to $41,250 ($35,000 base + $2,500 tech + $3,750 tax) that might be enough to siphon off some sales to the Volt. I'm saying as a whole paying an extra $7,800 (in this example) may give more model 3 buyers a pause vs someone looking at a model S.

 

[gigglehertz]

I'm assuming I'm going to have to pay state tax, so budgeting accordingly. I don't want a bare bones model unless the fancy extras are way too expensive or are more gee wiz than functional. IF the $7500 tax credit is still in effect for Tesla (and I'm sure that won't last long once the 3 is out if not already exhausted) then I'm hoping to lease to get the full deduction, then buy it outright later, maybe almost immediately. Would that help me get around the $35k limit?