It what can only be categorized as a major misstep, BMW of North America has announced that the i3 with Range Extender is not tax exempt in the state of New Jersey as what was previously reported.
Back on January 27th, BMW of North America told their client advisers that the i3 REx would be treated as a zero emission vehicle in New Jersey, and qualify for the state’s Zero Emission tax exemption. That was big news at the time for New Jersey residents including myself, and was one of the final deciding factors for me to actually choose the REx version over the BEV i3.
“The sales tax exemption in NJ only applies to zero-emission vehicles–and as such, does not apply to the i3 with range-extender as it does not apply currently to any vehicle with an internal combustion engine,” said Dave Buchko, BMW’s product and technology communications. “Any assumption that the i3 with Range Extender would qualify was premature.”
Now that BMW has begun delivering i3s with the Range Extender in the NJ State since last week, the dealers haven’t been collecting sales tax on the cars since they were instructed that they didn’t have to. I’m one of the people that took delivery already and didn’t pay sales tax. It’s unclear if BMW is going to now ask me to go back to the dealer and pay the additional $3,900.00 I’ll owe for sales tax. I love the car, and I think the REx is a great option, but this will effectively double the cost of the range extender. Instead of it costing $3,850, it will now actually cost about $7,750! It really is a great option and so far I have loved how well it works, but it’s just not worth $7,750 in my opinion.
The range extender has been a very popular option in New Jersey and my client adviser informed me that eleven of the thirteen i3 orders he has taken so far has the REx. What will these people do when he now has to tell them the car is now $3,200 to $4,000 more depending on how well optioned it is? After negotiating deals, signing contracts and being told they do not have to pay sales tax they find out the car is now costing them considerably more. It’s unknown how many will cancel their order when they are made aware of this but I would venture to guess about half of them end up doing just that. Then there is the issue of what happens to the people like me that have already taken delivery? Will BMW step in and make good for their mistake? People made their buying decision based on the cost they were told it would be and already negotiated deals and signed contracts.
If there is any good news to this it’s the fact that i3 REx deliveries only began last week so it’s unlikely more than a dozen or so cars have been delivered in New Jersey, and at least this error was realized quickly.
Perhaps BMW will offer a rebate to offset some of the surprise extra tax expense for the existing customers that have i3s on order. Some kind of goodwill effort may be indeed necessary to keep the orders from turning into cancellations.
