German Regulators Tell Tesla to Stop Advertising Cars with Gas Savings in Price

http://www.thedrive.com/news/26842/german-regulators-tell-tesla-to-stop-advertising-cars-with-gas-savings-included-in-price

by Pharmakon • 7 years ago

178 97 7 years ago

thedrive.com

jdashg• 7 years ago

Good. 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.

pooya133• 7 years 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• 7 years 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• 7 years ago

They're not stopping Tesla from advertising gas savings, they're stopping them from pre-subtracting it in the advertised price of the car.

colordrops• 7 years ago

Let'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• 7 years ago

Yes. 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.

benj1114• 7 years ago

The 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• 7 years ago

I'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.

plorkyeran• 7 years ago

If no one's being fooled by this then surely Tesla will have no problem with just not doing it any more.

Somehow I suspect that they'll keep doing it in every country that hasn't told them to stop.

olliej• 7 years ago

finally - it was an utter nonsense of a claim.

Shivetya• 7 years ago

it 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• 7 years ago

I 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.

unwind2• 7 years ago

ObMeta: here it seems FSD means "Full Self-Driving".

FireBeyond2• 7 years 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"...

breakyerself• 7 years ago

You can be very very smart and still make boneheaded mistakes. Musk has been being lauded as a genius long enough to begin believing in his own infallibility. I don't think he's lying. I think he believes it. To be fair if he had promised to do what he's already done before he did it no one would have believed that either.

kylec2• 7 years ago

It's disappointing that Tesla needs to be told to stop this deceptive practice

willart4food• 7 years ago

It was about time!

gok3• 7 years ago

On 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.

kylec2• 7 years ago

All 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.

gok3• 7 years ago

A reasonable guess would be fine. It's what appliances are required to do, for example.

oliwarner• 7 years ago

They could. I'm sure some do. But I think you're missing the point.

Tesla aren't saying "this is how much you could save", they're taking that number off the purchase price until you walk through the checkout.

benj1114• 7 years ago

They already advertise MPG/ LKM.

Fuel varies so much in price that fuel price variation would mask cost differentials between cars.

You could start combining some synthetic averaged fuel price with MPG to arrive at a cost. But is it a cost that anyone's likely to achieve, or know how it relates to their own circumstances. At least mileage figures however flawed are a known quantity, I know how it relates to my driving, and I know whether fuel prices are currently low or high.

simion3142• 7 years ago

This is a bad idea, a price label should display the price and not something else, if you introduce some bogus average fule costs this values will be gamed, just keep the price as a price, keep the fuel economy as that and include extra information if you want.

Spooky233• 7 years ago

Every car has a window sticker that includes annual fuel costs based on a standard calculation approach.

ulfw• 7 years ago

Germany has one of the highest electricity prices of the world too. So there's that.

https://www.statista.com/statistics/263492/electricity-price...

pooya133• 7 years ago

People 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• 7 years ago

It’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• 7 years ago

That’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.

CaliforniaKarl• 7 years ago

This 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• 7 years 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.

Meanwhile, the shenanigans in US advertised pricing allows for enormous hidden costs - think cellphone, cable or telephone bills.

tzs• 7 years 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.

usr11063• 7 years ago

The 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.

Tomte3• 7 years ago

The 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.

usr11063• 7 years ago

I 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?

germanier• 7 years ago

It's one of 78 such organisations (and any that fulfil some criteria can be added to the list). Nobody would call e.g. Foodwatch or the ADAC a "German regulator" but they still enjoy exactly the same rights.

austincheney• 7 years ago

Is the electricity that goes into a Tesla actually a cost savings over the cost of gasoline that goes into a gas powered car?

tempestn• 7 years ago

The 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• 7 years ago

Yes, 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).

Ives2• 7 years ago

Electricity 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.

anovikov• 7 years ago

They 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.

Spooky233• 7 years ago

Who would buy a used Tesla?

The thing would need to be mint as any minor issue would be takes months to fix.

idDriven• 7 years ago

In 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.

nomercy400• 7 years ago

We 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.

vinay4273• 7 years ago

I 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• 7 years ago

Buying an airline ticket is a much better experience than anything else online simply because of this. I wish the same regulation applied to everything.

camillomiller• 7 years ago

Still 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.

tinco2• 7 years ago

But 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.

kalmi10• 7 years ago

Somewhat unrelated, but the first time I bought something in a physical store in the USA, i thought i was being ripped off, because the final price came out different than the one that was listed next to the item. I had no idea that it was standard practice to exclude taxes from the displayed price.

Gibbon1• 7 years ago

Yeah that is bullshit that should have been stopped 50 years ago.

magicalhippo• 7 years ago

They 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• 7 years ago

I 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• 7 years ago

Isn’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• 7 years ago

The 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.

German Regulators Tell Tesla to Stop Advertising Cars with Gas Savings in Price

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