German Regulators Tell Tesla to Stop Advertising Cars With Gas Savings in Price
No more pushing “after savings” as its primary pricing model, at least in Germany.
Tesla has agreed to cease using its common "after savings" pricing when advertising its vehicles to German consumers, reports Reuters.
The German Center for Protection Against Unfair Competition, natively referred to as the Wettbewerbszentrale, claims that it is the "most influential nationwide and cross-border self-regulatory institution for enforcing the right to unfair competition." The agency recently made claims that Tesla is ambiguously pricing its vehicles by obfuscating actual cost with its "after savings" fuel and incentive pricing in the region.
When ordering a Model 3, prospective buyers are typically presented with two purchase prices: the "before savings" and "after savings." The latter is only displayed by looking at the bottom-left of the screen when selecting the vehicle options. Tesla chooses to show pricing inclusive of the federal tax credit, any state-level tax credits, and an estimated six-year gas savings. In some states like California, the "after savings" discounts can swell to $10,550.
The Wettbewerbszentrale used the Model 3 as an example for its pricing complaint, stating that it could be confusing to consumers that the automaker advertised both the purchase price of the vehicle, $63,811 (56,380 Euro) and the "after savings" price of $57,501 (51,380 EUR). It later said that Tesla has agreed to stop advertising the vehicle in such a way.
“Even if ‘savings’ could be realized, such an amount cannot be deducted from the purchase price or the monthly rate because customers must pay the full price at the time of purchase or financing,” Reuters quoted the Wettbewerbszentrale commenting in a statement.
When The Drive checked Tesla's German ordering page for the Model 3, it confirmed that Tesla was no longer displaying an "after savings" price on the Model 3 configurator.
Tesla has been under scrutiny from media outlets and consumers for the way it advertises vehicle pricing for some time. CEO Elon Musk even announced the mid-range variant of the sedan in a now-deleted tweet, stating "Model 3 starting cost now ~$35k (after ~$8k of credits & fuel savings)". With self-regulating bodies stepping in to advocate for consumers, perhaps the automaker will revisit the language market-wide.
A Tesla spokesperson declined to provide comment on the matter.