Why is the Model S so much cheaper in Norway?

JEU · Dec 5, 2014

Why is Tesla selling Model S for less in Norway?

Hi, I have been looking at the price om the Model S in Norway compared to the US. It seems like they have forgotten to change the prices in Norway (as they did with the rest of Europe).

A standard 85D Model S with tech package cost USD 90.320 excluding tax, incentives and federal tax credit. In Norway the same car costs 586.300 NOK (Norwegian krone) free from tax, which by today exchange rate (1 USD =7,15 NOK) is $82.000. This is extraordinary when taking into account that the price in NOK also includes trasportation half way araound the globe.

Most prices in Europe where increased a few weeks ago, do they have plans to look at the Norwegian price since the NOK value has fallen significantly over the last year? Or is it some kind of company policy behind this? The Model S is a normal car in Norway now

Saghost · Dec 5, 2014

I don't have any answers, but from what I've read about Norwegian rules and tax policies, it doesn't sound like Tesla needs to provide any incentives to sell huge numbers of cars there - the rules excepting EVs from import duties and VAT are enough to make it cheaper than any vaguely comparable gas car - without the special lanes and free parking and reduced/free tolls.

I suspect the RWD was holding some folks back - the D model will likely enjoy brisk sales there however Tesla prices it.

Walter

JEU · Dec 5, 2014

Saghost said:
I don't have any answers, but from what I've read about Norwegian rules and tax policies, it doesn't sound like Tesla needs to provide any incentives to sell huge numbers of cars there - the rules excepting EVs from import duties and VAT are enough to make it cheaper than any vaguely comparable gas car - without the special lanes and free parking and reduced/free tolls.

I suspect the RWD was holding some folks back - the D model will likely enjoy brisk sales there however Tesla prices it.
Walter

Agree, that is why I dont understand why Tesla does not charge more in Norway. The price seems unbalanced with other nations, but maybe we should just be happy

Yggdrasill · Dec 6, 2014

The pricing difference is due to the NOK rapidly depreciating against the USD. (Our currency is closely tied to the price of oil.)

Tesla said in the quarterly report that they will adjust pricing soon. So, anyone with plans to buy a Model S in Norway, go for it *now*.

matbl · Dec 8, 2014

Yggdrasill said:
The pricing difference is due to the NOK rapidly depreciating against the USD. (Our currency is closely tied to the price of oil.)

Tesla said in the quarterly report that they will adjust pricing soon. So, anyone with plans to buy a Model S in Norway, go for it *now*.

I don't believe that. For most other parts of Europe (incl Sweden so it's not EUR only), they've already adjusted the price due to currency changes.

Yggdrasill · Dec 8, 2014

matbl said:
I don't believe that. For most other parts of Europe (incl Sweden so it's not EUR only), they've already adjusted the price due to currency changes.

Well, there's been no adjustment in Norway. Are the cars they sell here in Norway cheaper to produce than the ones they sell in the rest of Europe? Or is Tesla struggling with demand?

I see no reason why Tesla should accept a lower price due to the currency.

Johan · Dec 8, 2014

Either they will soon adjust their pricing or since Norway is a big market for them and is outside of the EU (the cars don't go through Tilburg from what I understand, but come directly from the factory since there are no customs charges to avoid anyway) Tesla may have somehow hedged with regards to USD/NOK currency fluctuations.

matbl · Dec 8, 2014

Johan said:
Either they will soon adjust their pricing or since Norway is a big market for them and is outside of the EU (the cars don't go through Tilburg from what I understand, but come directly from the factory since there are no customs charges to avoid anyway) Tesla may have somehow hedged with regards to USD/NOK currency fluctuations.

Tesla securing the exchange rate is a much more likely explanation. They might do this on different term lengths for different currencies or the terms just start and end on different dates and therefore the price changes happen at different times. Just speculating...
In that case, the Norwegian prices are up for a rather big increase....

mgboyes · Dec 9, 2014

matbl said:
Tesla securing the exchange rate is a much more likely explanation. They might do this on different term lengths for different currencies or the terms just start and end on different dates and therefore the price changes happen at different times. Just speculating...
In that case, the Norwegian prices are up for a rather big increase....

Agreed. Tesla will have forward currency contracts in place up to a certain value, so the exchange rate in use inside Tesla NOK->USD will effectively be fixed by those contracts. When they expire their rate will change, as will pricing. TM have always been really clear that their international pricing relative to US is simply derived by factoring in taxation, duty, transportation, costs of doing business in that country, and exchange rates, i.e. not by pricing to meet local expectations or to compete with "similar cars". This is why in AU for example the Model S is cheap compared to German super-saloons, because the Germans have allowed their pricing to stay high in that market.

JEU · Dec 13, 2014

For comparrison, a basic P85D price in the US is $104.500. In Norway the same car cost $91.970 (677.800norwegian kroner/7,37) included shipping.. The difference increases with more equipment..

celter · Dec 17, 2014

and now the prices in Norway are more in line with the rest of the world, about 8-10% increase today.

alohates1a · Dec 21, 2014

Even with level pricing, still some nice perks:

https://www.youtube.com/watch?v=adReH9rVdRM

P85 · Dec 21, 2014

It's not that Teslas are that much cheaper here, the problem is that all cars that are not 100% electric are taxed extremely high. A Porsche Panamera Turbo cost about 3 times a fully specced P85D. With the final dollar adjustment a Porsche Boxter S is more expensive than a fully specced P85D here in Norway.

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Why is the Model S so much cheaper in Norway?

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Ex got M3 in the divorce, waiting for EU Model Y!

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