
German Regulators Tell Tesla to Stop Advertising Cars with Gas Savings in Price - Pharmakon
http://www.thedrive.com/news/26842/german-regulators-tell-tesla-to-stop-advertising-cars-with-gas-savings-included-in-price
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jdashg
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.

~~~
colordrops
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.

~~~
tachyonbeam
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.

~~~
coffeemug
I personally feel like pricing in tax refunds into the displayed cost of the
car is fair game, but pricing in gas savings is bullshit.

Tax refunds is money I'm definitely going to get back in a bounded (and
reasonably short) amount of time. If I pay $40k for a car and get $7k back in
the same year, it seems reasonable to advertise the cost as $33k (assuming
it's clear that $7k of that is a tax refund).

But gas savings feels like bullshit -- it's money I may or may not get back
(depending on my habits), the time horizon is unbounded, and even if it were
bounded, it's long (an order of multiple years). That feels deceptive to me,
and it's surprising they got away with it until now.

~~~
vinay427
In the US, the federal tax credit is a "credit" rather than a refund. That
means that if you don't pay enough federal taxes in that year, you won't be
saving the listed amount. Many state rebates don't work like this, but in some
sense it is still misleading for Tesla and other electric vehicle
manufacturers to not make this clear.

~~~
coredog64
How many people can afford a Tesla while not having $7k of federal tax
liability?

~~~
Scoundreller
The same way “students” and “homemakers” sometimes buy multimillion dollar
properties: offshore money (laundering).

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nomercy400
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.

~~~
kalmi10
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
Yeah that is bullshit that should have been stopped 50 years ago.

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Shivetya
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
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.

~~~
FireBeyond
> 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
Uff, 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.

~~~
altfredd
He isn't necessarily lying, and there won't be a lawsuit.

The "self-driving" will be made available, both in hardware and software. It
just won't be usable on roads (because every state will immediately outlaw
it).

Few owners, brave enough to try it in spite of regulations, might discover
some notable flaws... But hey, — no one promised you a _perfect_ self-driving!
You will be able to "self-drive" in couple of dedicated cities or around
wilderness in the middle of nowhere (with modest risk of damaging vehicle),
and that's supposedly what everyone has paid for. Musk won't be held
responsible for restrictive laws, — he most likely anticipates that and hopes
precisely for that.

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usr1106
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.

~~~
Tomte
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.

~~~
usr1106
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?

~~~
pjtr
The list of members is here:
[https://www.wettbewerbszentrale.de/de/institution/mitgliedsc...](https://www.wettbewerbszentrale.de/de/institution/mitgliedschaft/mitgliederverzeichnis/)

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
OK, so all traditional car manufacturers are there. Tesla is probably not
represented and at all or only with a very minimal weight through some
association. No surprise they don't accept Tesla's aggressive and misleading
marketing, which did not exist in Germany before and is not in compliance with
accepted legal practice.

On the other hand there are so many competing companies represented there,
that similar practices of any single traditional manufacturer would not be
accepted either. So I don't see why people reject the characterization of
self-regulation.

Of course if most of the car manufacturers agree to do something illegal the
self-regulation will fail. This has happened in the car manufacturing supply-
chain, fines have been imposed and more investigations are on the way IIRC.
That is governed by different legislation.

Probably also in the emission frauds there have been at least been "gentlemen"
agreements. It's not very convincing that the engineers of the competitors did
not understand how some manufacturers achieved their emission values.

But also cases related to consumer marketing which should be covered by the
self-regulation remain unsatisfactory. It's well known that all manufacturers
advertise misleading and unrealistic mileage values that no driver can achieve
in real life. So if the majority of the businesses agrees to cheat customers
self-regulation just fails. They will just stop newcomers who try to be
disruptive in their cheating.

In the end every decision could be brought to court. As a matter of fact in
the case of self-regulation it would not have even been Tesla who would have
needed to appeal a decision. There was no decision, just a request to comply
with legislation. They could have just waited whether Wettbewerbszentrale goes
to court. That they decided to comply without any court decision tells a lot.

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CaliforniaKarl
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
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
> 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.

~~~
ben_w
Most Europen countries also have their own languages. All of them have their
own top level domains. And despite the Euro, there are 11 different currencies
used in the EU.

VAT just isn’t particularly hard, as business problems go.

~~~
Drdrdrq
It's not that trivial either (search for "VAT MOSS" to learn more), but
otherwise your point is valid.

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rcdmd
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.

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

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magicalhippo
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.

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brandon272
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.

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ryeguy_24
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.

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olliej
finally - it was an utter nonsense of a claim.

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

~~~
samcheng
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).

~~~
Ives
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.

~~~
zaroth
The 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
€1.3 per litre, so that's $5.53 per gallon.

------
anovikov
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.

~~~
Spooky23
Who would buy a used Tesla?

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

~~~
idDriven
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.

~~~
Spooky23
I’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.

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gok
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.

~~~
kylec
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.

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

~~~
unwind
It'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?

~~~
AnthonyMouse
They could do the calculation based on the amount and type of driving done by
the median driver. Then this would be a good approximation for most people and
the outlier who knows they drive twice that many miles could double the number
etc.

~~~
seszett
I think most people will get a better picture seeing the usual numbers like
"4.8 l/100km urban, 4.5 mixed, 4.2 highway" than something like "median fuel
cost per year 850€".

Especially since you can't estimate the future price of fuel.

~~~
AnthonyMouse
The problem with l/100km is that you can't compare it to purchase prices
without doing math, which makes it less intuitive.

This is especially true once you're no longer comparing the same units even
between vehicles. It's much easier to compare euros with euros than having to
compare euros with l/100km _and_ kWh/100km.

Moreover, it's possible to make a plausible fuel price estimate based on
current and historical prices, and if it turns out to be wrong then it
wouldn't be any less wrong for having the buyer calculate it instead of the
seller.

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willart4food
It was about time!

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pooya13
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
_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
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.

~~~
Tomte
No, it's very different.

They are allowed to advertise "price X, but remember you also save Y per
year". But not "price X minus Y".

