Tesla’s sales have surged to unprecedented levels in Turkey, where the American automaker delivered nearly as many vehicles last month as it did across the entire European market.
It occurred because Tesla managed to take advantage of a loophole that has now been patched.
Turkey has a consumption tax rate (ÖTV) that varies depending on the type of car.
Earlier this year, they reduced the tax rate to 10% for EVs with a power output of less than 160 kW.
Tesla vehicles wouldn’t qualify for that, but the automaker has resorted to one of its old tricks, which it also used to generate more sales in Canada back in 2021.
The American automaker software-locked the base Model Y RWD to just 160 kW of power to qualify for the lower tax rate. This significantly reduced the price and resulted in a surge of orders.
Tesla delivered 8,730 Model Y vehicles in Turkey in August, which was roughly equivalent to the total it delivered in a whole previous year in the country and comparable to about Tesla’s entire sales in Europe last month, following an approximately 40% decrease in sales.
Year-to-date, Tesla’s sales have now surpassed both previous full years combined:
However, Turkey has now patched the loophole. In July, the government announced that it would raise the base tax rate to 25% by the end of the month, but buyers could still take advantage of the tax rate if they had an invoice before then.
This resulted in a surge in demand for Tesla vehicles in Turkey, as evident in the August delivery results.
The demand was pulled forward, and Tesla is likely going to see sales slow down for the rest of the year.
That said, Tesla should still see demand settle higher than in previous years, as the OTV previously was as high as 60%.
Electrek’s Take
Top comment by Haggy
I don't know if I'd even call it a loophole. A loophole allows for something that wasn't intended. This is a software change that turns the car into something compliant. Unless Tesla is giving people a backdoor way to change it after the fact, it's not a loophole.
Tesla has taken advantage of loopholes, and so have other companies. For example, there's a cap on car prices for tax credit eligibility. It affects cars with add ons such as premium seats. But it doesn't affect software. So adding FSD changes nothing. When Tesla offered a free hardware upgrade to people who bought a Model X with FSD, it really meant that if they bought a car with upgraded seats, they would have lost the tax credit and paid more money. But if they paid slightly more for FSD, they'd get the seat upgrade for free, and it would be cheaper to get the car with FSD than without it for the same hardware configuration.
Loopholes allow people to get something that's seemingly not allowed, or where the intention was to not allow it. Limiting something permanently to what's allowed isn't a loophole. It's selling what's allowed.
There has always been a strong demand for Tesla and electric vehicles in Turkey.
Back before Tesla officially entered the market, local EV enthusiasts were privately importing Tesla vehicles.
In the picture above, local early Tesla adopters in Turkey were begging the automaker to establish local service and Superchargers to support the community.
I believe there’s strong demand for Tesla vehicles in Turkey, but this specific surge is due to Tesla finding a loophole in the tax incentive, and the loophole has now been patched.
FTC: We use income earning auto affiliate links. More.
Comments