5 ms·

Canada investigates whether Tesla helped itself to a subsidy-fueled sales boom

60 points by debo_ 2y ago

FireBeyond 2y ago
> Tesla sold about 8,600 cars in three days at four separate stores in Canada, or roughly one every two minutes per showroom, in January. Right. If, and only if, the stores were open 24/7. Most are open 8 to 10 hours a day. Tesla is claiming with a straight face that these three stores sold a new car EACH, every FIFTY SECONDS from opening to closing for three days straight. > Moreover, according to Quebec-based Motor Illustrated, Tesla accounted for 89% of all claims filed during that period. I think the word for this starts with "F" and ends in "raud". > "No payments will be made until we are confident that the claims are valid," said Transport Minister Chrystia Freeland in a statement to the Toronto Star. I'm sure in the US we'd happily pay Tesla and maaaaaaaybe claw it back several years later. Maybe.
- bryanlarsen 2y ago
  > the stores were open 24/7. The stores are open 24/7. They're online sales. The "dealership" is just the place you pick up your car from.
  - Rohansi 2y ago
    Yup, buy online and then barely any interaction with their staff is required to actually take delivery.
  - FireBeyond 2y ago
    The article references the showrooms as the sales point. Not "online sales". "Tesla sold about 8,600 cars in three days at four separate stores in Canada". Yes, cars were sold online. This references Tesla recording the place of sale as those showrooms. The contortions to defend Tesla are ridiculous. If you believe Tesla, nearly 20% of its annual sales for the entirety of Canada happened around these four locations in one weekend. It just so, coincidentally, happened to be conveniently timed for subsidies.
    - bryanlarsen 2y ago
      All sales at Tesla dealerships are done online. They literally sit you in front of a web browser and guide you through buying the car online. Almost all Tesla deliveries happen at dealerships no matter where they were ordered from. The delivery dealership is likely recorded as the place of sale.
mikestew 2y ago
Tesla sold about 8,600 cars in three days at four separate stores in Canada, or roughly one every two minutes per showroom, in January. I mean, it’s going to take more than two minutes just to convince the finance guy that if he mentions “paint protection” one more time, you’re walking out.
- koolba 2y ago
  Does that exist for Tesla dealerships? I thought it’s all online and just the delivery happens in person.
- jtimdwyer 2y ago
  See, they install that TruCoat at the factory, there's nothin' we can do, but I'll talk to my boss.
- outlace 2y ago
  That's not how it works for Tesla. Totally different buying experience. You order online, get a notification some days or weeks later that it's ready, go to the store sign a couple of documents and drive off with the car. Maybe 10 minutes total. (Source: bought a Tesla a few years ago). I just recently got a Kia EV9 and it was a 3-4 hour marathon of paperwork, talking, more paperwork. Really terrible buying experience. Nice car though.
  - qwerpy 2y ago
    Yeah that's one of the reasons my dad went with Tesla for his recent car purchase. My wife helped him get a RAV4 (Toyota) a few years ago and the three of us lost four hours on a weekend because of the song and dance that dealerships put you through. Never again. From now on it'll be Tesla, Rivian, Polestar, or Lucid instead.
- floxy 2y ago
  Does Tesla do business differently in Canada than the U.S.? I thought purchasing in the U.S. was done through an app, and everything was one-price, no negotiation? Pick the options you want, and the car is delivered to your door at sometime in the future. And the showrooms were exactly that, places to show the car, no selling, no salesmen, no protection plan upselling, undercoatings, etc.. Maybe someone who has purchased a Tesla in Canada or the U.S. could chime in?
Mountain_Skies 2y ago
The numbers are highly suspicious, but the article doesn't seem to point to any actual specific accusation of wrongdoing. Were the cars sold to people in other countries and thus not eligible? Sold to corporate buyers and they're not eligible? The number of vehicles sold at the dealerships doesn't pass a sanity check but it's also unclear what is believed to have happened that was illegal. Were online sales ineligible for the subsidy so they were routed through dealerships? There appears to be smoke here but it's unclear where the fire is located, if it exists at all.
- mingus88 2y ago
  The accusation is fraud
- bryanlarsen 2y ago
  To try and steelman it: With Tesla you buy the car online, and don't sign the papers until you pick up the car. The day you sign the papers is perhaps the day you're considered to have bought the car, rather than the day you press the "buy" button. The cars tend to arrive in large batches, so it's very possible that a single months worth of sales arrived all on the same day and those papers were all signed on the same day.
  - actionfromafar 2y ago
    A lot of trucks with cars.
elevatedastalt 2y ago
Doesn't Tesla let you order a car online? Does it need people to physically visit a store and spend an hour doing paperwork?
- debo_ 2y ago
  Second paragraph, first line: > While a spike was to be expected and Tesla orders are typically filed online rather than at a physical store, that nonetheless works out to two cars sold every minute of every hour for three days straight.
gruez 2y ago
>In January, four showrooms in three major cities managed to sell 8,600 cars in the span of just a weekend following news that the country would no longer help fund part of the purchase price for a new electric car under its iZEV program. This is supposed to be suspicious? What's next? It's "suspicious" that Amazon had 5x the orders in the weekend after the fourth thurdsay in November? There's a pretty straightforward explanation: the government announced the subsidies were going to end, so all the potential buyers sitting on the fence or planning to purchase some time in the future made the leap and purchased immediately, causing a spike.
- simonw 2y ago
  You don't think it's suspicious that those four showrooms each sold 2,150 cars in a single weekend? I mean sure, there's a chance that happened for real, but "suspicious" doesn't mean "there was definitely something shady going on", it means "maybe there was something shady, this deserves a closer look".
  - 486sx33 2y ago
    It’s possible there were cars sold before that weekend that didn’t have credits registers yet. And also possible that a lot of people placed orders that weekend to take advantage of the credit. (Which was how the program was supposed to work, consumers like credits, consumers sign deals to get credits). This is just divisive political agendas from the Canadian media
    - simonw 2y ago
      Why are you blaming the Canadian media here? The story appears to be about action by a Canadian government.
      - floxy 2y ago
        Are we supposed to believe this not specifically designed to get engagement from the Elon-hate trend? Are the same media outlets going to be promoting apologetic stories when/if in 6 months the verdict comes back that everything was on the up-and-up? And they wonder why people hold journalists/media outlets in low regard. Full disclosure. I've never owned a Tesla, don't currently own a Telsa, and have no plans on owning a Tesla in the future. I have only been inside of Tesla for a 5-minute backseat car ride in ~2018. I don't own any Tesla stock, have never owned Tesla stock, and have no plans on owning Tesla stock in the future.
Freedom2 2y ago
To be fair, it's a product directly endorsed by the President of the United States of America. As he said, "we have to celebrate [Musk]", especially when there's an "illegal boycott" as stated by that president. I'd be very surprised if a US president supported any company that engages in fraud, it's just unbecoming of the position.
- quantified 2y ago
  You need to end with /s when it's sarcasm.
  - Freedom2 2y ago
    Maybe, but surely the general intelligence of the average HN commenter should be able to pick up on sarcasm / satire / parody. Unless, of course, it reflects a mirror back at them.
- xethos 2y ago
  You mean the same American president threatening to annex the country? Because they can fuck right off, if so. I'm amazed American's don't seem to grasp this. The president is threatening annexation, and several people below them in the administration are taking it seriously. This is deeply offensive.
- deleted 2y ago
  [deleted]
janalsncm 2y ago
Not sure I fully understand the accusation. 8600 sales in a weekend is a lot for a physical store, but these happened online. What about the other stores, were they also high? It is possible this was legit but there should be an investigation. Preventing waste, fraud and abuse. Real purchases require real people, so simply asking who the buyers are should sort it out. If employees were filling out the forms and “buying” then it should be fairly straightforward to figure out.
- _--__--__ 2y ago
  I think the Fortune article lacked background, I found more here: https://www.yahoo.com/news/tesla-43m-canadian-ev-rebate-130638782.html https://www.yahoo.com/news/tesla-43m-canadian-ev-rebate-1306... For some reason the Canadian iZEV rebate was provided to the dealer, not the end customer. Dealers were to sell below cost and then get money back from the government, so they'd be on the hook for the difference if they couldn't get the rebate. The rebate was scheduled to cut off in March but was obviously running out of funding before schedule. Dealers had some leeway to batch their claims and Tesla sent an unprecedented number of claims right at the end that drained the remaining funds, but these claims are not necessarily all for sales from that small window. I can't find any specifics but surely the claims submitted have to substantiate that a car was sold to a Canadian resident. I'm still not sure that Tesla did anything illegal unless they are found to have sent fraudulent claims, which should be trivial to check.
- FireBeyond 2y ago
  > It is possible this was legit but there should be an investigation. It's really not. That's Tesla saying that one-fifth of its annual sales for the entire country of Canada happened on one weekend in one part of the province of Ottawa.
pseudo0 2y ago
This story is hilarious. Yes, lots of people will want to buy Teslas when the government announces that the $5,000 subsidy is about to end. The other car manufacturers are just mad that they lost out due to their antiquated sales process. If they had direct purchase via online ordering, maybe they would have gotten a larger slice of that remaining subsidy money?
- bastawhiz 2y ago
  > due to their antiquated sales process I don't think anyone wants a larger slice of the pie, I think they want the share of the pie that they earned that was consumed by (what appears to be) outright fraud on Tesla's part. Tesla's numbers are implausible at best, at least showing some unusual and unexplained behavior. They exhausted the credits with the incredibly dubious sales. Why shouldn't they be investigated?
  - pseudo0 2y ago
    Those numbers aren't implausible at all. It equates to about two months of sales during a normal period, and is easily explained by people who were planning to buy a Tesla in the next 3-6 months rushing to get their orders in. People are very motivated when there is a $5,000 discount on the line. This just seems like sour grapes from traditional dealerships who subject their customers to multi-hour haggling sessions to close a sale. Is there any indication of malfeasance here other than Tesla selling a lot of cars?
    - clipsy 2y ago
      > It equates to about two months of sales during a normal period It equates to two months of sales for the entirety of Canada happening in one weekend in one province.
      - FireBeyond 2y ago
        ... in one city of one province. Yes, for accuracy, a large city, but one that only accounts for less than 4% of Canada's population.
ChrisArchitect 2y ago
Previously: https://news.ycombinator.com/item?id=43294281 https://news.ycombinator.com/item?id=43294281

60 points by debo_ 2y ago

> Tesla sold about 8,600 cars in three days at four separate stores in Canada, or roughly one every two minutes per showroom, in January. Right. If, and only if, the stores were open 24/7. Most are open 8 to 10 hours a day. Tesla is claiming with a straight face that these three stores sold a new car EACH, every FIFTY SECONDS from opening to closing for three days straight. > Moreover, according to Quebec-based Motor Illustrated, Tesla accounted for 89% of all claims filed during that period. I think the word for this starts with "F" and ends in "raud". > "No payments will be made until we are confident that the claims are valid," said Transport Minister Chrystia Freeland in a statement to the Toronto Star. I'm sure in the US we'd happily pay Tesla and maaaaaaaybe claw it back several years later. Maybe.

bryanlarsen 2y ago
> the stores were open 24/7. The stores are open 24/7. They're online sales. The "dealership" is just the place you pick up your car from.
- Rohansi 2y ago
  Yup, buy online and then barely any interaction with their staff is required to actually take delivery.
- FireBeyond 2y ago
  The article references the showrooms as the sales point. Not "online sales". "Tesla sold about 8,600 cars in three days at four separate stores in Canada". Yes, cars were sold online. This references Tesla recording the place of sale as those showrooms. The contortions to defend Tesla are ridiculous. If you believe Tesla, nearly 20% of its annual sales for the entirety of Canada happened around these four locations in one weekend. It just so, coincidentally, happened to be conveniently timed for subsidies.
  - bryanlarsen 2y ago
    All sales at Tesla dealerships are done online. They literally sit you in front of a web browser and guide you through buying the car online. Almost all Tesla deliveries happen at dealerships no matter where they were ordered from. The delivery dealership is likely recorded as the place of sale.

mikestew 2y ago

Tesla sold about 8,600 cars in three days at four separate stores in Canada, or roughly one every two minutes per showroom, in January. I mean, it’s going to take more than two minutes just to convince the finance guy that if he mentions “paint protection” one more time, you’re walking out.

koolba 2y ago
Does that exist for Tesla dealerships? I thought it’s all online and just the delivery happens in person.
jtimdwyer 2y ago
See, they install that TruCoat at the factory, there's nothin' we can do, but I'll talk to my boss.
outlace 2y ago
That's not how it works for Tesla. Totally different buying experience. You order online, get a notification some days or weeks later that it's ready, go to the store sign a couple of documents and drive off with the car. Maybe 10 minutes total. (Source: bought a Tesla a few years ago). I just recently got a Kia EV9 and it was a 3-4 hour marathon of paperwork, talking, more paperwork. Really terrible buying experience. Nice car though.
- qwerpy 2y ago
  Yeah that's one of the reasons my dad went with Tesla for his recent car purchase. My wife helped him get a RAV4 (Toyota) a few years ago and the three of us lost four hours on a weekend because of the song and dance that dealerships put you through. Never again. From now on it'll be Tesla, Rivian, Polestar, or Lucid instead.
floxy 2y ago
Does Tesla do business differently in Canada than the U.S.? I thought purchasing in the U.S. was done through an app, and everything was one-price, no negotiation? Pick the options you want, and the car is delivered to your door at sometime in the future. And the showrooms were exactly that, places to show the car, no selling, no salesmen, no protection plan upselling, undercoatings, etc.. Maybe someone who has purchased a Tesla in Canada or the U.S. could chime in?

Mountain_Skies 2y ago

The numbers are highly suspicious, but the article doesn't seem to point to any actual specific accusation of wrongdoing. Were the cars sold to people in other countries and thus not eligible? Sold to corporate buyers and they're not eligible? The number of vehicles sold at the dealerships doesn't pass a sanity check but it's also unclear what is believed to have happened that was illegal. Were online sales ineligible for the subsidy so they were routed through dealerships? There appears to be smoke here but it's unclear where the fire is located, if it exists at all.

mingus88 2y ago
The accusation is fraud
bryanlarsen 2y ago
To try and steelman it: With Tesla you buy the car online, and don't sign the papers until you pick up the car. The day you sign the papers is perhaps the day you're considered to have bought the car, rather than the day you press the "buy" button. The cars tend to arrive in large batches, so it's very possible that a single months worth of sales arrived all on the same day and those papers were all signed on the same day.
- actionfromafar 2y ago
  A lot of trucks with cars.

elevatedastalt 2y ago

Doesn't Tesla let you order a car online? Does it need people to physically visit a store and spend an hour doing paperwork?

debo_ 2y ago
Second paragraph, first line: > While a spike was to be expected and Tesla orders are typically filed online rather than at a physical store, that nonetheless works out to two cars sold every minute of every hour for three days straight.

gruez 2y ago

>In January, four showrooms in three major cities managed to sell 8,600 cars in the span of just a weekend following news that the country would no longer help fund part of the purchase price for a new electric car under its iZEV program. This is supposed to be suspicious? What's next? It's "suspicious" that Amazon had 5x the orders in the weekend after the fourth thurdsay in November? There's a pretty straightforward explanation: the government announced the subsidies were going to end, so all the potential buyers sitting on the fence or planning to purchase some time in the future made the leap and purchased immediately, causing a spike.

simonw 2y ago
You don't think it's suspicious that those four showrooms each sold 2,150 cars in a single weekend? I mean sure, there's a chance that happened for real, but "suspicious" doesn't mean "there was definitely something shady going on", it means "maybe there was something shady, this deserves a closer look".
- 486sx33 2y ago
  It’s possible there were cars sold before that weekend that didn’t have credits registers yet. And also possible that a lot of people placed orders that weekend to take advantage of the credit. (Which was how the program was supposed to work, consumers like credits, consumers sign deals to get credits). This is just divisive political agendas from the Canadian media
  - simonw 2y ago
    Why are you blaming the Canadian media here? The story appears to be about action by a Canadian government.
    - floxy 2y ago
      Are we supposed to believe this not specifically designed to get engagement from the Elon-hate trend? Are the same media outlets going to be promoting apologetic stories when/if in 6 months the verdict comes back that everything was on the up-and-up? And they wonder why people hold journalists/media outlets in low regard. Full disclosure. I've never owned a Tesla, don't currently own a Telsa, and have no plans on owning a Tesla in the future. I have only been inside of Tesla for a 5-minute backseat car ride in ~2018. I don't own any Tesla stock, have never owned Tesla stock, and have no plans on owning Tesla stock in the future.

Freedom2 2y ago

To be fair, it's a product directly endorsed by the President of the United States of America. As he said, "we have to celebrate [Musk]", especially when there's an "illegal boycott" as stated by that president. I'd be very surprised if a US president supported any company that engages in fraud, it's just unbecoming of the position.

quantified 2y ago
You need to end with /s when it's sarcasm.
- Freedom2 2y ago
  Maybe, but surely the general intelligence of the average HN commenter should be able to pick up on sarcasm / satire / parody. Unless, of course, it reflects a mirror back at them.
xethos 2y ago
You mean the same American president threatening to annex the country? Because they can fuck right off, if so. I'm amazed American's don't seem to grasp this. The president is threatening annexation, and several people below them in the administration are taking it seriously. This is deeply offensive.
deleted 2y ago
[deleted]

janalsncm 2y ago

Not sure I fully understand the accusation. 8600 sales in a weekend is a lot for a physical store, but these happened online. What about the other stores, were they also high? It is possible this was legit but there should be an investigation. Preventing waste, fraud and abuse. Real purchases require real people, so simply asking who the buyers are should sort it out. If employees were filling out the forms and “buying” then it should be fairly straightforward to figure out.

_--__--__ 2y ago
I think the Fortune article lacked background, I found more here: https://www.yahoo.com/news/tesla-43m-canadian-ev-rebate-130638782.html https://www.yahoo.com/news/tesla-43m-canadian-ev-rebate-1306... For some reason the Canadian iZEV rebate was provided to the dealer, not the end customer. Dealers were to sell below cost and then get money back from the government, so they'd be on the hook for the difference if they couldn't get the rebate. The rebate was scheduled to cut off in March but was obviously running out of funding before schedule. Dealers had some leeway to batch their claims and Tesla sent an unprecedented number of claims right at the end that drained the remaining funds, but these claims are not necessarily all for sales from that small window. I can't find any specifics but surely the claims submitted have to substantiate that a car was sold to a Canadian resident. I'm still not sure that Tesla did anything illegal unless they are found to have sent fraudulent claims, which should be trivial to check.
FireBeyond 2y ago
> It is possible this was legit but there should be an investigation. It's really not. That's Tesla saying that one-fifth of its annual sales for the entire country of Canada happened on one weekend in one part of the province of Ottawa.

pseudo0 2y ago

This story is hilarious. Yes, lots of people will want to buy Teslas when the government announces that the $5,000 subsidy is about to end. The other car manufacturers are just mad that they lost out due to their antiquated sales process. If they had direct purchase via online ordering, maybe they would have gotten a larger slice of that remaining subsidy money?

bastawhiz 2y ago
> due to their antiquated sales process I don't think anyone wants a larger slice of the pie, I think they want the share of the pie that they earned that was consumed by (what appears to be) outright fraud on Tesla's part. Tesla's numbers are implausible at best, at least showing some unusual and unexplained behavior. They exhausted the credits with the incredibly dubious sales. Why shouldn't they be investigated?
- pseudo0 2y ago
  Those numbers aren't implausible at all. It equates to about two months of sales during a normal period, and is easily explained by people who were planning to buy a Tesla in the next 3-6 months rushing to get their orders in. People are very motivated when there is a $5,000 discount on the line. This just seems like sour grapes from traditional dealerships who subject their customers to multi-hour haggling sessions to close a sale. Is there any indication of malfeasance here other than Tesla selling a lot of cars?
  - clipsy 2y ago
    > It equates to about two months of sales during a normal period It equates to two months of sales for the entirety of Canada happening in one weekend in one province.
    - FireBeyond 2y ago
      ... in one city of one province. Yes, for accuracy, a large city, but one that only accounts for less than 4% of Canada's population.

ChrisArchitect 2y ago

Previously: https://news.ycombinator.com/item?id=43294281 https://news.ycombinator.com/item?id=43294281