OFFICIAL: Tesla Singapore Discussion

[kwkwkw]

8 hours ago, andersseanx said:

lol.. those who defended AD in Mercs thread.. lol.

Can someone explain to me why Tesla would want to make its profits within the OMV (high OMV but low mark up).

If OMV is high, ARF will be high too and overall car cost will increase by much more than the increase in OMV. On the other hand, if Tesla 'makes the profit' from a markup and imports at as low an OMV as possible, they can decrease ARF and overall car cost will decrease significantly.

In other words, for a given consumer price $X, low OMV + high mark up = more profit to Tesla, while high OMV + low mark up = lower profit to Tesla.

I don't understand why Tesla would choose high OMV + low mark up?

[Volvobrick]

23 minutes ago, kwkwkw said:

Can someone explain to me why Tesla would want to make its profits within the OMV (high OMV but low mark up).

If OMV is high, ARF will be high too and overall car cost will increase by much more than the increase in OMV. On the other hand, if Tesla 'makes the profit' from a markup and imports at as low an OMV as possible, they can decrease ARF and overall car cost will decrease significantly.

In other words, for a given consumer price $X, low OMV + high mark up = more profit to Tesla, while high OMV + low mark up = lower profit to Tesla.

I don't understand why Tesla would choose high OMV + low mark up?

Cos cannot suka suka sell Singapore a cheap price and transfer profits outside, but sell HK a higher price. The taxman in the country where the car is made would invite Elon drink kopi to explain.

This type of tricks only for the PI. 

Edited February 10, 2021 by Volvobrick

[inlinesix]

59 minutes ago, Volvobrick said:

Cos cannot suka suka sell Singapore a cheap price and transfer profits outside, but sell HK a higher price. The taxman in the country where the car is made would invite Elon drink kopi to explain.

This type of tricks only for the PI. 

Even though the factory in China, it does not mean that the invoice comes from China.

It could be Tesla China sells to Tesla HK. Tesla HK sells to Tesla Sg.

[inlinesix]

1 hour ago, kwkwkw said:

Can someone explain to me why Tesla would want to make its profits within the OMV (high OMV but low mark up).

If OMV is high, ARF will be high too and overall car cost will increase by much more than the increase in OMV. On the other hand, if Tesla 'makes the profit' from a markup and imports at as low an OMV as possible, they can decrease ARF and overall car cost will decrease significantly.

In other words, for a given consumer price $X, low OMV + high mark up = more profit to Tesla, while high OMV + low mark up = lower profit to Tesla.

I don't understand why Tesla would choose high OMV + low mark up?

In the end, all profit goes back to Tesla.

Tesla has always been running B2C biz model.
How to declare a lower OMV?

 

[kwkwkw]

22 minutes ago, inlinesix said:

In the end, all profit goes back to Tesla.

Tesla has always been running B2C biz model.
How to declare a lower OMV?

 

It seems a bit odd that Tesla's OMV is the final end consumer price, while with the AD system other cars' OMVs are the price sold to the local dealerships (so you won't be able to find a car for sale at the OMV price anywhere in the world).

I'm completely guessing here, but could Tesla not open a local company and sell the car to this company?

All along Singapore's OMV tax structure assumes that local 'services' are not included into the OMV, so I don't see why LTA would take issue with Tesla similarly quoting an OMV that doesn't take into consideration final local 'services'.

[Hoseyboh]

Tio kan liao....😰

https://www.bbc.com/news/business-55990821

[Zxcvb]

33 minutes ago, Hoseyboh said:

Tio kan liao....😰

https://www.bbc.com/news/business-55990821

 

[Carbon82]

For those who wonder how I get the OMV and the other cost in my spreadsheet, here are the details.

Using the Model 3 Standard Range Plus (239KW) as example, the estimated ARF provided on Tesla Singapore website is $76,959. Basing on the tiered road tax formula (100% for 1st $20K, 140% for the next $30K and 180% for >$50K), the OMV worked out to be $58,310

ARF = $20,000 (1st $20K @100%) + $42,000 (next $30K @140%) + $14,958 ($8,310 @180%) = $76,958

For road tax, my apology for using the old formula. Basing on the new formula for EV effective 1 Jan 2021, it should be

12 months road tax = [$3,050 + $20 x (239 - 230)] x 0.782 = $2,526 (239 in the equation is for 239KW)

What Tesla has missed out is the lump sum tax for EV, which are as follow:

• 2021: $200p.a.
• 2022: $400p.a.
• 2023: $700p.a.

Thus the total annual road tax payable for the Model 3 Standard Range Plus (239KW) shall be

• 2021: $2,726 (i.e. $2,526 + $200)
• 2022: $2,926 (i.e. $2,526 + $400)
• 2023: $3,226 (i.e. $2,526 + $700)

As for the debate about Tesla cost price vs selling price (estimated OMV), do note that Open Market Value (OMV) is based on the price actually paid or payable for the car when sold for export to the country of importation, which includes:

1. Purchase price (probably RRP in line with other countries)
2. Freight charges
3. Insurance charges, and
4. All other charges incidental to the sale and delivery of the car to Singapore (e.g. logistics and admin cost)

[kwkwkw]

19 minutes ago, Carbon82 said:

As for the debate about Tesla cost price vs selling price (estimated OMV), do note that Open Market Value (OMV) is based on the price actually paid or payable for the car when sold for export to the country of importation, which includes:

1. Purchase price (probably RRP in line with other countries)
2. Freight charges
3. Insurance charges, and
4. All other charges incidental to the sale and delivery of the car to Singapore (e.g. logistics and admin cost)

Thanks for this detailed analysis. 

To clarify the highlighted point, while it may theoretically be that OMV is based on MSRP/RRP, this has never been the case in practice. For instance, an Audi A4 has an OMV of ~USD25.5K, while the MSRP in the US (probably the cheapest place in the world to buy a car) starts at ~USD39K for the base spec A4 (lower than SG base spec). 

In comparison, the Model 3 SR+ OMV you've computed is ~USD58K, while the US MSRP is ~USD38K, basically the same as an A4. 

Still find it really odd that the Model 3 has such a sky-high OMV relative to other cars in its class (I'm thinking A4, 3 Series, C Class etc). 

[inlinesix]

6 hours ago, kwkwkw said:

It seems a bit odd that Tesla's OMV is the final end consumer price, while with the AD system other cars' OMVs are the price sold to the local dealerships (so you won't be able to find a car for sale at the OMV price anywhere in the world).

I'm completely guessing here, but could Tesla not open a local company and sell the car to this company?

All along Singapore's OMV tax structure assumes that local 'services' are not included into the OMV, so I don't see why LTA would take issue with Tesla similarly quoting an OMV that doesn't take into consideration final local 'services'.

For traditional car maker, it is a B2B2C model.

Factory sells to importer. Importer sells to AD.

OMV is based on whatever price Factory sells to importer.

[hansmith]

7 hours ago, Carbon82 said:

For those who wonder how I get the OMV and the other cost in my spreadsheet, here are the details.

Using the Model 3 Standard Range Plus (239KW) as example, the estimated ARF provided on Tesla Singapore website is $76,959. Basing on the tiered road tax formula (100% for 1st $20K, 140% for the next $30K and 180% for >$50K), the OMV worked out to be $58,310

ARF = $20,000 (1st $20K @100%) + $42,000 (next $30K @140%) + $14,958 ($8,310 @180%) = $76,958

Sorry to say but there is an error with this calculation. Will leave it to you to figure out why. Cheers!

[Voodooman]

On 2/5/2021 at 9:21 AM, Voodooman said:

With Tesla's stratospheric omv, how to sell in volume to justify building an island wide Tesla charging network? 

Setting up camp to watch how G and Tesla f with our money.

https://www.businesstimes.com.sg/government-economy/more-tax-perks-down-the-road-to-promote-use-of-electric-cars-in-singapore

Happy to be proven wrong.

G is finally getting its act together and pushing for EV rollout and Tesla is disrupting the AD market.

Why Elon is leaving good money on the table?  He could have marked up 5-10k on distributor's margin and the sub 5s T3 will still kill all those premium conti wannabes. 

Imagine you are driving a $200k BMW 318 kanna jiak everyday by a $130k plasticky T3. Lol. Okok... Cannot compare like that.

[velocity-]

Placed my deposit for a Model 3.
 

I have tested the performance at a PI and enjoyed the drive. For 160k OTR for the base and 200k OTR for the Performance, it's a no brainer compared to the 3 series and C class. I was about to get a G20 318 for 160k but lucky I did not. Not to mention, Tesla's financing partner is DBS which offers 1.68%. Can't wait to try it out. 

[velocity-]

13 hours ago, kwkwkw said:

Can someone explain to me why Tesla would want to make its profits within the OMV (high OMV but low mark up).

If OMV is high, ARF will be high too and overall car cost will increase by much more than the increase in OMV. On the other hand, if Tesla 'makes the profit' from a markup and imports at as low an OMV as possible, they can decrease ARF and overall car cost will decrease significantly.

In other words, for a given consumer price $X, low OMV + high mark up = more profit to Tesla, while high OMV + low mark up = lower profit to Tesla.

I don't understand why Tesla would choose high OMV + low mark up?

Simple reason. Tesla does not use distributors worldwide. They sell direct to end consumers. My guess is that they increase the OMV here so that the profit goes directly to Giga Shanghai, rather than putting profit in Tesla Singapore which is a private limited company. It makes no sense to pay tax here. Mr Musk probably has a special arrangement with China on tax and export rebates. Hence profit going directly to Giga Shanghai makes more sense than profit coming into Tesla singapore, and then paying tax on it. 

The next reason I can see why they bump up the OMV is to account for the EEAI or the Electric Vehicle Early Adopter Incentive. Now there is a 45k rebate (20k for the EEAI and 25k for the new VES). This scheme lasts till Dec 2023. When it ends and the 45k ARF is gone, Tesla can then choose to maintain the current omv or drop the omv to let tesla singapore make the margin here. This will allow them to control the price at the 110k machine price without coe. At most they drop the omv by the rebate amount and they can still sell the car at the same price and same depreciation. This is an ultra smart move that will ensure their price competitiveness against the other segment choices like A4,3s, C and Lexus IS.


If you add up the sums, they are basically selling the car at no margin to less than 5k depending on spec. I am sure all the ADs are having emergency meeting right now on how to reprice their existing cars and upcoming evs to battle tesla. 

[Volvobrick]

11 hours ago, Carbon82 said:

For those who wonder how I get the OMV and the other cost in my spreadsheet, here are the details.

Using the Model 3 Standard Range Plus (239KW) as example, the estimated ARF provided on Tesla Singapore website is $76,959. Basing on the tiered road tax formula (100% for 1st $20K, 140% for the next $30K and 180% for >$50K), the OMV worked out to be $58,310

ARF = $20,000 (1st $20K @100%) + $42,000 (next $30K @140%) + $14,958 ($8,310 @180%) = $76,958

For road tax, my apology for using the old formula. Basing on the new formula for EV effective 1 Jan 2021, it should be

12 months road tax = [$3,050 + $20 x (239 - 230)] x 0.782 = $2,526 (239 in the equation is for 239KW)

What Tesla has missed out is the lump sum tax for EV, which are as follow:

• 2021: $200p.a.
• 2022: $400p.a.
• 2023: $700p.a.

Thus the total annual road tax payable for the Model 3 Standard Range Plus (239KW) shall be

• 2021: $2,726 (i.e. $2,526 + $200)
• 2022: $2,926 (i.e. $2,526 + $400)
• 2023: $3,226 (i.e. $2,526 + $700)

As for the debate about Tesla cost price vs selling price (estimated OMV), do note that Open Market Value (OMV) is based on the price actually paid or payable for the car when sold for export to the country of importation, which includes:

1. Purchase price (probably RRP in line with other countries)
2. Freight charges
3. Insurance charges, and
4. All other charges incidental to the sale and delivery of the car to Singapore (e.g. logistics and admin cost)

Minus the 45K rebate, plus customs duties 20%, and 2K plus for road tax, Total costs is about 104k (OMV 58k) without COE. Tesla Sg makes 8k, not bad! 

Who know, maybe actual OMV could be 45K but selling price no change, and Tesla Sg will be laughing all the way to the bank. Or Bitcoin hard disk. 

 

Edited February 11, 2021 by Volvobrick

[TeamAMG69]

1 hour ago, Voodooman said:

5s T3 will still kill all those premium conti wannabes. 

Imagine you are driving a $200k BMW 318 kanna jiak everyday by a $130k plasticky T3. Lol. Okok... Cannot compare like that.

 

45 minutes ago, velocity- said:

If you add up the sums, they are basically selling the car at no margin to less than 5k depending on spec. I am sure all the ADs are having emergency meeting right now on how to reprice their existing cars and upcoming evs to battle tesla. 

anyone has any contacts / friends / SE at AD (BMW, MB, AUDI) , really got emergency meeting to reduce their RRP & improve their specs on their B&B cars or PHEV / EV?

i keep seeing the above comments in many CAR CLUB Chat groups , but nobody can confirm it is true. 

 

 

[kwkwkw]

40 minutes ago, velocity- said:

Simple reason. Tesla does not use distributors worldwide. They sell direct to end consumers. My guess is that they increase the OMV here so that the profit goes directly to Giga Shanghai, rather than putting profit in Tesla Singapore which is a private limited company. It makes no sense to pay tax here. Mr Musk probably has a special arrangement with China on tax and export rebates. Hence profit going directly to Giga Shanghai makes more sense than profit coming into Tesla singapore, and then paying tax on it. 

The next reason I can see why they bump up the OMV is to account for the EEAI or the Electric Vehicle Early Adopter Incentive. Now there is a 45k rebate (20k for the EEAI and 25k for the new VES). This scheme lasts till Dec 2023. When it ends and the 45k ARF is gone, Tesla can then choose to maintain the current omv or drop the omv to let tesla singapore make the margin here. This will allow them to control the price at the 110k machine price without coe. At most they drop the omv by the rebate amount and they can still sell the car at the same price and same depreciation. This is an ultra smart move that will ensure their price competitiveness against the other segment choices like A4,3s, C and Lexus IS.


If you add up the sums, they are basically selling the car at no margin to less than 5k depending on spec. I am sure all the ADs are having emergency meeting right now on how to reprice their existing cars and upcoming evs to battle tesla. 

Singapore's corporate income taxes are relatively low (up to 17%), while every dollar of OMV above $50k is taxed at 180% (ARF). I would think any additional work required to transfer profit from Tesla Singapore to Tesla Shanghai/HQ would be worth the reduced taxes of ~160%?

If Tesla is at all able to drop the OMV, I don't see why they shouldn't drop it now. If they did so, and if they wanted to maintain a specific profit margin, they could sell the car for a much lower price (by avoiding unnecessary ARF costs).

It seems to me that the 'selling the car at no margin' is at best a marketing gimmick, as Tesla is making their margin within the abnormally high OMV (around SGD25k more than an A4), while the AD structure does not allow for this, and ADs' only form of profit is from the 'mark up'.

Btw, wonder if anyone has done the math on total lifetime cost of Model 3 vs comparable ICE car when road tax costs (high road tax + $700/year flat component from 2023) and PARF (which is reduced by the $45k of VES/ early adopter incentives) have been taken into account? I hope that financially it is still competitive (disregarding opinions like Tesla has Autopilot, Mercs have better interior etc.)...

[In my previous post, I wrongly said that M3 OMV is USD58K, it should be USD44K.]

[kwkwkw]

1 minute ago, TeamAMG69 said:

 

anyone has any contacts / friends / SE at AD (BMW, MB, AUDI) , really got emergency meeting to reduce their RRP & improve their specs on their B&B cars or PHEV / EV?

i keep seeing the above comments in many CAR CLUB Chat groups , but nobody can confirm it is true. 

 

 

If I had to guess, I'd say that these rumours are based on people's optimism and hope that ADs will reduce prices (like how people were insistent that 'facts' proved that GME would rise even further even as it plummeted from its ATH...)