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German Regulators Tell Tesla to Stop Advertising Cars with Gas Savings in Price
- dummyload 8y agoWow what a hypocrisy, it seems German Regulators are terrified that Tesla might eclipse the German Auto industry, which it absolutely will. Where were these regulators when Volkswagen was balls deep into Emmision Scandal in the US.
- jdashg 8y agoGood. No one else plays this deceptive game, cherry-picking individual costs of ownership. You can advertise (but not promise!) expected savings, but pretending this reduces the price of the car is deceptive.
- deleted 8y ago[deleted]
- pooya13 8y ago> you can advertise (but not promise!) Did you miss the title of the article? They are trying to stop Tesla from advertising the fact.
- dragonwriter 8y ago> Did you miss the title of the article? You really shouldn't ask that, since you seem to have missed it. > They are trying to stop Tesla from advertising the fact. No, they are trying to stop them from advertising the gas savings in the price, not to stop advertising the gas savings at all. That is, they want Tesla to stop advertising something other than the actual price as the price.
- wlesieutre 8y agoThey're not stopping Tesla from advertising gas savings, they're stopping them from pre-subtracting it in the advertised price of the car.
- ehnto 8y agoMakes sense. Advertising the price as the amount that will come out of your pocket is important, and it's coercive to do otherwise. It's the same way for most consumer products, no reason cars should be any different. There are ways to advertise the savings that won't be coercive. By coercive I mean getting you in the door and beginning the sales process when you otherwise would not have.
- cma 8y agoIronically, many governments dictate that you can't include government charges like sales tax in price advertisements.
- FireBeyond 8y agoWhere? The US/Canada? Most other countries I've lived in/visited require the price advertised to be inclusive of all taxes.
- benj111 8y agoAgreed. In the UK you're skating on thin ice if you advertise to consumers, sales tax free prices, partially on the basis it looks like tax evasion. Plus the principle of being able to pay the advertised price. Now its slightly different in shops for the trade where the pre-tax price is front and centre, the post tax price does still need to be displayed though I think.
- fyfy18 8y agoThis is an EU wide directive. The price advertised should be inclusive of all taxes and additional charges. It is so that the buyer (consumer or business) has clear information about exactly how much something will cost them, and so they can compare prices to other suppliers. https://europa.eu/youreurope/citizens/consumers/shopping/pricing-payments/index_en.htm https://europa.eu/youreurope/citizens/consumers/shopping/pri...
- colordrops 8y agoLet's be honest though, is anyone fooled by this? If you are plopping down ~50k for a car you should read the text directly on their first. It says the full price as well as the price minus savings in gas, in the same font size. I get it, it's tacky, but it's not like hidden fine-print and fees 10 pages into a contract.
- harperlee 8y agoYes. This fools people. If you look 5 advertisements while flipping a magazine or driving through a road, and only tesla does this, you end up with the idea that they are cheaper. It hurts comparability. They should not be confusing people about the retail price of the car.
- ginnungagap 8y agoFor another recent example Ryanair is being fined in Italy not because their practice of not including the hand luggage in the price of a ticket is illegal, but because it hurts comparability with other airlines
- benj111 8y agoThe screen shot in the article just shows an asterisk after the price. Theres a further complication in that most countries offer incentives for buying EVs, so you could legitimately think its one of those that Tesla is helpful illustrating for you. Finally Europe has decent consumer protections, so the price advertised should be the price payable, and people expect that.
- tachyonbeam 8y agoI've been a Tesla shareholder since 2016, and I think the German government is right. I sincerely hope Tesla drops this, not just in Germany but worldwide. The question isn't "is anyone fooled by this anyway?", it's "why is Tesla using deceptive practices?". IMO, they should feel free to point out cost savings somewhere, but they should not fudge guestimated values into the first price they show you. It's not just tacky, it's bullshit. Energy cost and tax savings vary by region and based on your individual situation, your driving habits, etc. Tax refunds do not affect the cost you have to pay for a car upfront. Elon Musk is an engineer at heart, and I feel like he should know better. Doing things like this loses them the respect of a lot of people.
- just_one_time_ 8y agoAt the same time they are taking away free charging, seems like a double lie.
- olliej 8y agofinally - it was an utter nonsense of a claim.
- Shivetya 8y agoit is the one shameful act I have to encourage people to ignore when using the Tesla site. the truth is they don't need to do this to sell their cars, it just looks tacky. to be honest it is stunts like this where regulation does come in handy. like how we have truth in lending laws for home loans and even cars.
- gotocake 8y agoI don’t think it’s the only “shameful” thing unfortunately. The claim of cars being capable of FSD is pretty clearly nonsense, although I recognize that some true believers will take some more years to accept that. Still, I think most of us have figured out that full automation isn’t right around the corner, and unless we posit that Musk is an idiot (he isn’t) then he knows that too. My dream for Tesla is thst Musk is gone, soon, because while he appears able to start great things, he’s a pretty lousy leader (and person) beyond that. I look at SpaceX and see something great that for the most part, does its thing because Musk isn’t around. I look at Tesla and I see him screwing around on Twitter, lying, and generally being a drain on the company. Tesla has too much good going on to make stupid promises about FSD or bullshit about their pricing.
- unwind 8y agoObMeta: here it seems FSD means "Full Self-Driving".
- FireBeyond 8y ago> Still, I think most of us have figured out that full automation isn’t right around the corner, and unless we posit that Musk is an idiot (he isn’t) then he knows that too. Except that just the other day Musk went on record (on an earnings call?) saying that Tesla's would be capable of "full self driving, coast to coast, this year"...
- tbabb 8y agoUff, wincing facepalm. That man needs to close his mouth. I would bet 85% odds that Tesla is eventually going to offer a refund to all current Model 3 owners who "pre-purchased" self driving. In fact, that's the event that is more likely to happen "coast to coast, this year". Calling it now: There will be an "autopilot hardware v2." And Tesla will have to dig deep to pay back all that pre-purchased FSD cash, probably plus extra to stave off a class action lawsuit, which is its own risk. I would love to see full self driving, but I don't trust that hardware. I would love to see Tesla succeed, but I fear that Musk himself will bring it down.
- kylec 8y agoIt's disappointing that Tesla needs to be told to stop this deceptive practice
- willart4food 8y agoIt was about time!
- Proven 8y agoHah - finally!!! Now if they also got their shit together and told them to stop advertising coal-powered Tesla cars as cleaner, there would be a lot less to lie about in Tesla ads.
- gok 8y agoOn one hand, these numbers are kinda bogus. On the other... ICE car prices should really be advertised with a reasonable fuel cost included, particularly in Germany where fuel is so expensive.
- kylec 8y agoAll carmakers disclose the fuel economy of their vehicles. How much you'll actually pay for fuel depends greatly on not just the fuel economy of the vehicle, but how much you drive, how aggressively you drive, and the price of fuel in your area and at the particular time. I don't see how you could distill all that down to a single number that means anything.
- gok 8y agoA reasonable guess would be fine. It's what appliances are required to do, for example.
- unwind 8y agoIt's reasonable to assume that a fridge or freezer is powered on 24/7/365. For a car there simply cannot be a correspondingly safe assumption, can there?
- gok 8y agoA TV, dishwasher, or laundry machine is a better corollary. Everyone uses theirs at a different rate but they still put a reasonable guess at yearly cost on the Energy Star label.
- spiralx 8y agoBut the variation between lowest and highest usage and cost for a TV or dishwasher is going to be far less than it is for the cost of fueling a car, there's a huge difference between someone who uses the car for a few short journeys a few times a week and someone who drives hundreds of miles almost every day for work.
- pooya13 8y agoPeople might not be aware how much they can save on gas prices by switching to full electric. I don’t see any downside in advertising an estimate. It’s not like they are presenting that as the price with a footnote that says it includes gas savings.
- dec0dedab0de 8y agoIt’s not like they are presenting that as the price with a footnote that says it includes gas savings. That is very close to what they are doing. If it had the real price and it said "You would save x amount with this option" I doubt anyone would care.
- SNACKeR99 8y agoThat’s exactly what I’m seeing. A price with an asterisk, and below the fold, “Prices above include potential incentives and gas savings.” So, it’s not just “like” they are doing it, they are doing it.
- deleted 8y ago[deleted]
- CaliforniaKarl 8y agoThis makes sense to me: On any purchasing/configuring/ordering page, the local-currency number displayed should be the number that is actually being charged, and that number should have the highest weight (the largest size, the most-emphasized, etc.).
- m463 8y agoEuropeans might be particularly sensitive to this mispricing, because I think they enjoy SANE advertised pricing all around - such as including tax in the price. Meanwhile, the shenanigans in US advertised pricing allows for enormous hidden costs - think cellphone, cable or telephone bills.
- tzs 8y ago> Europeans might be particularly sensitive to this mispricing, because I think they enjoy SANE advertised pricing all around - such as including tax in the price How does that work for online advertising and online shopping sites? Most of Europe uses destination based VAT for remote sales, which could make it very difficult or annoying to include VAT in the advertised price if the ads or shopping site reach more than one country.
- Tomte 8y agoYou just ask for the user's location. A dropdown box with countries. That's not unusual, American companies do that, too, in order to calculate sales tax. You probably need it anyway to calculate shipping.
- JPDeckers 8y agoyou just display the price with your local VAT. In the last step, if the user is from a different country AND if you do more than 100k eur revenue for that country/year, you recalculate with the correct user VAT. And if you are Amazon, you then give the diff as a discount if it was more than advertised.
- ben_w 8y ago
- usr1106 8y agoThe headline is wrong. It's not a regulator telling anything. A regulator would be a federal or state body making a decision (which then might be challenged in court). It's an organization which maybe could be called a self-regulation body threatening with a lawsuit. And Tesla agreeing "voluntarily" to stop the practice. Well, voluntarily, because they obviously admit that their previous practice would be deemed illegal in court.
- Tomte 8y agoThe Wettbewerbszentrale is a bit more than a self-regulating body (and why self-regulating? The "regulated" business aren't members). It has special legal status in that it can start such lawsuits, which normal associations can't.
- usr1106 8y agoI must admit that I don't have a deeper understanding of their members. Can you shed some light of the structure/profile of their 1200 business members and 800 (lobbying) organisation members?
- pjtr 8y agoThe list of members is here: https://www.wettbewerbszentrale.de/de/institution/mitgliedschaft/mitgliederverzeichnis/ https://www.wettbewerbszentrale.de/de/institution/mitgliedsc... It includes for example Audi, BMW, Daimler, Ford, Opel, Volkswagen, the VDA (Verband der Automobilindustrie; German Association of the Automotive Industry) and the VDIK (Verband der Internationalen Kraftfahrzeughersteller; Association of International Motor Vehicle Manufacturers) VDA members are here: https://www.vda.de/en/association/members.html https://www.vda.de/en/association/members.html VDIK members are here: http://www.vdik.de/members/members.html http://www.vdik.de/members/members.html and include for example Citroën, Fiat, Honda, Hyundai, Jeep, Mitsubishi, Nissan, Peugot, Renault, Saab, Toyota, Volvo...
- usr1106 8y ago
- austincheney 8y agoIs the electricity that goes into a Tesla actually a cost savings over the cost of gasoline that goes into a gas powered car?
- tempestn 8y agoThe amount of savings obviously depends on electricity and gas prices where you live, but yes, the electricity will be less expensive for the same mileage.
- samcheng 8y agoYes, definitely, even with high-electricity-cost utilities. Even the big, heavy older Teslas get the equivalent of at least 60 mpg (say, 300 watt hours per mile at 15 cents per kWh vs $3 for a gallon of gas).
- Ives 8y agoElectricity is still cheaper than gas, but electricity in many European countries these days is at least 30 cents per kWh (and rising every year), instead of the 15 cents you mention.
- zaroth 8y agoThe eMPG is an attempt to convert WH/m into MPG based on some fixed numbers for $/kWh and $/gallon. a WH/m x b $/kWh / 1000 = x $/mi c $/ga gasoline / x $/mi = mpg equivalent. For a=300, b=0.15, c=$3.00 you get 66mpg. You can plug in your own numbers as you see fit. The cost savings is then estimated by plugging in a number of miles driven, and comparing gallons of gas versus a hypothetically less efficient car (not sure what MPG rating Tesla uses for its comparison) Note that the Tesla Model 3 is closer to 150 WH/mi. And what does gasoline cost in those European countries?
- Ives 8y ago€1.3 per litre, so that's $5.53 per gallon.
- anovikov 8y agoThey better advertise the higher residual price of a car after N years ownership. That's where the savings are! Or better yet, not advertise, but partner with banks to launch the lease program taking in account these savings. 3-yr lease of a $35K model 3 will be comparable to a typical $25-$28K car.
- Spooky23 8y agoWho would buy a used Tesla? The thing would need to be mint as any minor issue would be takes months to fix.
- idDriven 8y agoIn defense of buying a used Tesla I really appreciate the idea that if your car is 'out of date' in terms of current hardware you can simply pay for an upgrade instead of being told you have to sell your car as used and buy a whole new car. When you think of how much money a lot of people invest in their cars treating it as a disposable commodity doesn't make a lot of sense economically and ecologically. In terms of turnaround time, obviously your point is valid, but if Tesla manages to disrupt the entire paradigm of an industry in a positive way it may be a minor critique in the grand scheme of things.
- Spooky23 8y agoI’ve never purchased a car new, and my previous daily driver was a 2003 that was damaged in a minor collision last year. With every car I’ve owned, I have no direct relationship with the OEM. I think I had a Cadillac repaired by the dealer once because it ended up being cheaper. That’s a feature. I’ve seen what happens when companies corner the market on anything — it’s not good for anyone but the company abusing the market. I’d lease a Tesla. Anything else is too big a risk.
- nomercy400 8y agoWe europeans don't like it when the final, listed price isn't the price you have to pay when you buy something. It's the same for airline tickets: no hidden fees in the final listed price allowed.
- vinay427 8y agoI believe it's the same for airline tickets in the US, and I'd hope they do something about Tesla as well though I wouldn't hold out hope.
- paxys 8y agoBuying an airline ticket is a much better experience than anything else online simply because of this. I wish the same regulation applied to everything.
- vinay427 8y agoAbsolutely. I feel the same way about shipping charges for online orders, which is a problem in European countries as well. I wouldn't advocate to have them integrated into the prices of products, because I think it is worth having a discount for ordering more or picking up your order in person, which passes on the retailer's savings to you. However, I would like prices to perhaps include the minimum possible shipping charges for your location. It is surprising that eBay manages to do this despite having decentralized sellers around the world with a global customer base, but an ordinary online retailer doesn't.
- camillomiller 8y agoStill here in Germany we have a lot of offers for services where the discount price for the first year of subscription is calculated into the advertised price.
- tinco 8y agoBut it's no longer allowed to automatically continue into year long contracts with a higher price after the first year, so these schemes lost some of their bite.
- magicalhippo 8y agoThey already did this change in Norway. Before the main price you saw was included the savings, now the main price you see is the actual price. You can click on a "details" button where it will expand and list all the details, and only there, after the purchase price it'll say how much you can save by not having to buy gas.
- rcdmd 8y agoI think most consumers take "savings" to mean "reduction in purchase price." Obviously, (or not so obviously) Tesla's sales-page means something different. But even if you dig into the asterisk next to the "after savings price" you find some aggressive assumptions. And $4300 gas savings over 6 years is not worth $4300 today to any rational person on this Earth. They need an asterisk explanation within their asterisk explanation stating they assume a 0% discount rate.
- ryeguy_24 8y agoIsn’t this including negative opportunity cost in the price? I agree with one of the comments that the price should reflect what you have to pay at time of sale. The problem with this approach is that they are assuming too many things. The biggest assumption is 1) that buyers are comparing a Tesla to another car. Why not a motorcycle with better fuel efficiency. This also assumes a fixed differential between gas and energy costs which may or may not hold and 3) that a comparable time period is 6 years and 4) a present value discount rate of 0%. Sure, anyone can calculate all sorts of returns on investment on meechandise. But why don’t we just agree to quote the investment and not the return. At the end of the day, that’s all we know today.
- brandon272 8y agoThe problem with Tesla’s pricing shenanigans is that it makes me not trust them at face value on the issue of pricing. The other day Tesla plainly tweeted Model 3 pricing and explicitly noted that the pricing was “before incentives” but I still had to wonder, “But is that the actual price or not?” because of their history of and reputation for bizarre communication when it comes to what the actual price of their cars are.