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Government The Almighty Buck Technology

Tesla Proves To Be Too Pricey For Germany, Loses Tax Subsidies (reuters.com) 121

Posted by BeauHD from the fish-out-of-water dept.
Tesla has been removed from Germany's list of electric cars eligible for subsidies because its Model S sedan is too expensive for the scheme. Tesla customers cannot order the Model S base version without extra features that pushed the car above the 60,000 euro ($71,500) price limit, a spokesman for the German Federal Office for Economic Affairs and Export Controls (BAFA) said on Friday. From the report: Germany last year launched the incentive scheme worth about 1 billion euros, partly financed by the German car industry, to boost electric car usage. A price cap was included to exempt premium models. "This is a completely false accusation. Anyone in Germany can order a Tesla Model S base version without the comfort package, and we have delivered such cars to customers," Tesla said in a statement. The carmaker said the upper price limit was initially set by the German government to exclude Tesla, but later a compromise was reached "that allows Tesla to sell a low option vehicle that qualifies for the incentive and customers can subsequently upgrade if they wish." It said, however, it would investigate whether any car buyers were denied the no-frills version. Under the subsidy scheme, buyers get 4,000 euros off their all-electric vehicle purchase and 3,000 euros off plug-in hybrids.
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Tesla Proves To Be Too Pricey For Germany, Loses Tax Subsidies More

Tesla Proves To Be Too Pricey For Germany, Loses Tax Subsidies

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  • "The carmaker said the upper price limit was initially set by the German government to exclude Tesla, but later a compromise was reached "that allows Tesla to sell a low option vehicle that qualifies for the incentive and customers can subsequently upgrade if they wish." It said"

    Seems pretty silly if a substantial part of the reason for the price cap was to prevent Tesla cars specifically being included, but then they did an end-run around that by letting you buy the base model + the upgrade. I bet you can

    • Re: Obeying the letter but not the spirit of the l (Score:4, Insightful)

      by MachineShedFred ( 621896 ) on Saturday December 02, 2017 @01:09AM (#55662569) Journal

      It's doubtful that the law would be valid if it outright said "except Tesla" in its language. So they tried to infer it by putting a price cap just under what a Tesla S costs. Then Tesla started offering a trim package that meets the law's price criteria.

      What exactly is the problem again? Oh, what it said in the summary: this program is partially paid for by the German auto makers, and the German auto industry doesn't want to have that money going to Tesla. So let's fuck around with sock puppets in the government rather than build a competitive offering. Because clearly someone that was going to buy a Tesla is going to change their mind over this subsidy and get an electric VW Golf instead?

    • I guess this sort of thing will happen whatever the price is set to. But I think it's really more that they don't want to give a tax break to things like the Tesla Roadster, which is essentially just a very expensive toy.

      There will be edge cases whatever they set the price to.

      • If a specific goal of the policy was to prevent a certain make of car from being included, then there are two things they can do:
        1. Explicitly exclude that make (or make + model) from the policy
        2. Set the price cap at a level that means even the base version of that car does not qualify

        The regulators chose to do neither, instead they negotiated with Tesla to allow their cars to slip through a loophole.

  • General Motors builds an amazing electric as well.
  • Sucks when you run out of other people's money...happens sooner or later.

    Ferret
    • The GOP corporate tax cut doesn't seem to think that's a problem. Just borough another Trillion. Remember kids, budget deficits only matter when the Dems are in charge

  • There is no reason to subsidize a $70,000+ car (Score:5, Insightful)

    by magzteel ( 5013587 ) on Friday December 01, 2017 @11:34PM (#55662379)
    Anyone who can afford it can afford it without the subsidy too. This is just a gift to the wealthy.

    Note I am in no way against the wealthy. I wish them every success.

    But they don't need government assistance to buy a luxury vehicle.

    • Re: (Score:2)

      by guruevi ( 827432 )

      Look around you. How many luxury SUV's don't you see in the inner city? Mercedes, Lincoln, ... they cost about $65k and up. People don't seem to have any problem plunking down $50k+ for a car.

      • Look around you. How many luxury SUV's don't you see in the inner city? Mercedes, Lincoln, ... they cost about $65k and up. People don't seem to have any problem plunking down $50k+ for a car.

        I'm not sure if you are agreeing with me or not.

        According to Kelly Blue Book the average new car price in 2017 is $34,600 https://mediaroom.kbb.com/2017... [kbb.com]

        The only cars over $65K shown in the price breakdown are high-end luxury or performance.

        By definition a luxury is not a necessity. The government subsidizing a luxury is nuts.

        • Re: (Score:2)

          by guruevi ( 827432 )

          I agree that the luxury cars aren't a necessity, however, plenty of "poor" people that get various housing and food subsidies already pay for brand new 4x4 pickup trucks and luxury SUV's that retail at $50k+.

          I live in the inner city myself, the average income here is ~$35k but my entire neighborhood is dotted with recent year Jaguars, Escalades, Navigators, Crew Cabs. Not sure how they afford it, all I got is a $15k pre-owned VW and a used Jeep. Removing those subsidies would be hurting those poor people.

          • I agree that the luxury cars aren't a necessity, however, plenty of "poor" people that get various housing and food subsidies already pay for brand new 4x4 pickup trucks and luxury SUV's that retail at $50k+.

            I live in the inner city myself, the average income here is ~$35k but my entire neighborhood is dotted with recent year Jaguars, Escalades, Navigators, Crew Cabs. Not sure how they afford it, all I got is a $15k pre-owned VW and a used Jeep. Removing those subsidies would be hurting those poor people.

            So you are living responsibly and within your means, but you are in favor of subsidizing people who don't? I don't agree with your thinking. If they can afford a $50k+ car with a subsidy, they can afford a $37K+ car without one. And that's exactly what they should be doing, looking for a car they can afford.

            BTW I can afford a new luxury car but I'm driving a 1999 with over 281,000 miles. When it fails I will look for another good value used car.

    • But they don't need government assistance to buy a luxury vehicle.

      The logic is that by subsidising a new industry, eventually the technology will become cheap enough for everyone else to benefit too. As much as it makes for great headlines, sometime subsidising the wealthy is actually a net gain for everyone (but only in some specific cases).

      • But they don't need government assistance to buy a luxury vehicle.

        The logic is that by subsidising a new industry, eventually the technology will become cheap enough for everyone else to benefit too. As much as it makes for great headlines, sometime subsidising the wealthy is actually a net gain for everyone (but only in some specific cases).

        This isn't one of those cases. There are plenty of non-luxury EV and hybrid cars that cost much less.

        https://cars.usnews.com/cars-t... [usnews.com]

        • This isn't one of those cases.

          What is the criteria? If you you get too specific with what qualifies and what doesn't you defeat the purpose of innovation (ie let creators create).
          Battery tech is a worthy investment. Tesla still receives much, much less subsidies than the fossil fuel industry, and kills much less people in the process.

          • This isn't one of those cases.

            What is the criteria? If you you get too specific with what qualifies and what doesn't you defeat the purpose of innovation (ie let creators create). Battery tech is a worthy investment. Tesla still receives much, much less subsidies than the fossil fuel industry, and kills much less people in the process.

            When using tax incentives to encourage consumer behavior the government must balance the cost of the incentives against the impact on consumer behavior and the selling price. Vendors aren't stupid, they know they can charge more when the government is subsidizing the purchase.

            The luxury market is less driven by cost than by cachet. That's why automaker love high end vehicles, the margins are much higher. If the government wants to subsidize EV/Hybrid tech they can do it in the mid-range consumer market

            • When using tax incentives to encourage consumer behavior ...

              The tax incentives are to help kick start an new industry which will hopefully return a greater benefit to society than it costs. Based on the growth of solar, battery tech, and EVs, and the effect of reducing dependencies on fossil fuels, foreign energy dependence and millions of deaths a year from air pollution, I'd say they are working.

              Most of the vehicles in your list are foreign. The local competition only exist because of Tesla and subsidies.

              • When using tax incentives to encourage consumer behavior ...

                The tax incentives are to help kick start an new industry which will hopefully return a greater benefit to society than it costs. Based on the growth of solar, battery tech, and EVs, and the effect of reducing dependencies on fossil fuels, foreign energy dependence and millions of deaths a year from air pollution, I'd say they are working. Most of the vehicles in your list are foreign. The local competition only exist because of Tesla and subsidies.

                Well the industry is booming along at this point. I say it is time to end the subsidies. But of you don't believe me, perhaps you will believe Elon Musk:

                https://seekingalpha.com/artic... [seekingalpha.com]

                He knows his customers will still happily buy his product without the subsidies.

  • Just remove the extras and make them aftermarket add ons. Tesla could probably put a kit together.

  • Why not just give tax breaks up to 40.000$? you can now get a usable EV for those money.
    I wanted a Bolt(Opel Ampera-e) but they won't sell them here.
    I live in Denmark, A place where we don't give a crap about EVs or green energy any more. In fact, we are probably the only country were the number of EVs on the street went down this year.

    The government decided to drop tax breaks for EVs because people were buying Teslas like crazy. With a 180% tax om cars, they didn't stand a chance here.
    So they have started

  • To those who claim that the 60000 Euro price limit for the cars was created specifically against Tesla - nope, it was against luxury cars in general, since everybody who can afford a 60000+ Euro car does not really need a 4000 Euro tax break. Also, the subsidies were not only for pure EV, they were also for hybrid models. So the price limit also excludes models from Porsche (Panamera hybrid), Mercedes (S class hybrid), BMW (7 series eDrive) and other big manufacturers.

    Tesla cheated, pure and simple. The rul

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      And why, you might ask, did the German govt agree to that weird concession / loophole? Because this entire scheme was illegal under EU trade law, and germany likely would've lost if Tesla sued them over it. It was pure protectionism of local manufacturers, plain and simple. You can claim all you want that it also hits some of the super-high end models of Porsche, ect, but the fact that the cutoff was jjuuuust below the lowest-end Tesla was no coincidence.

      If some Tesla salespeople did imply you were force

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