Since Tesla used to charge $2000 to add supercharging to the S60 that is the best yardstick for the value of unlimited supercharging. Will Tesla drop the price of every car by $2000 on January 1? Guess we will find out soon. They should do something because the cars will have lost value.
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bonnie
I play a nice person on twitter.
You're mixing up the former price of supercharging hardware ($2000) and the supercharging service. The service is unlimited for those who purchase before the end of this year.
Tesla was always clear that the $2k was for hardware.
Tesla was always clear that the $2k was for hardware.
whitex
Well-Known Member
Technically $2K was for enabling the hardware. If you didn't have the hardware (some S40's), it was a higher cost to get supercharging. Enabling the hardware allows you to use superchargers, as well as other DC charging (currently only ChaDeMo). All cars come with hardware enabled now. What is changing is the supercharger network access rules for cars ordered after 12/31.
The period I was referring to was when the S60 could be purchased with supercharging for $2000 adder or having it enabled later for $2500. I opted for the S85 which always included free supercharging because the extra $2000 was baked into the price.
For subsequent cars the $2000 for free supercharging has been baked into the price and will be until December 31. On January 1 you will be buying an identical car as you would have on December 31 except that it will have lost value due to the removal of free supercharging. It seems like the price of the car should be reduced.
For subsequent cars the $2000 for free supercharging has been baked into the price and will be until December 31. On January 1 you will be buying an identical car as you would have on December 31 except that it will have lost value due to the removal of free supercharging. It seems like the price of the car should be reduced.
Starting Jan 1st, Teslas will still have "free" Supercharging, but only 400kWh/year.
The idea that as of that date Tesla should reduce the base price of its cars by $2,000 does not take into account the reality of the marketplace. Demand for Teslas will continue to be high compared to supply. There are no direct competitors. If Tesla sales continue to grow in 2017 -- and that seems very likely -- then there is no reason for Tesla to lower prices by $2,000.
If demand softens in 2017 then Tesla may consider lowering prices. We shall see...
This is a price increase, on top of the other price increases over the last few months.
Tesla factored into the purchase price of cars the projected life time cost per car for using the supercharger network. While some owners have been using the superchargers much more than Tesla projected (local charging and frequent long distance drivers), for most cars, it's likely they use 400kWh or less per year - at least most of the time.
In the 4 years we've had our P85, I'm guessing that for 3 of those years, we probably used less than 400kWh for long distance charging, so we wouldn't have been impacted by the new fees. This last year we made a 2500+ mile road trip - and would have had to pay fees for much of that trip, and any subsequent shorter road trips.
Since Tesla hasn't yet delivered the promised (by year end) details for the supercharger fee plan, we don't know how much of a price increase this will be.
We're planning to purchase a replacement for our P85 - and will include a projection of the lifetime supercharger fees when we calculate the cost for the purchase.
Until Tesla can sustain profitability OR they see demand drop of the Model S/X (due to high prices) OR they start seeing competition for the Model S/X (at lower prices), seems likely Tesla will maintain their current prices, and if their costs drop, they'll keep the additional profit to help cover their costs.
Tesla factored into the purchase price of cars the projected life time cost per car for using the supercharger network. While some owners have been using the superchargers much more than Tesla projected (local charging and frequent long distance drivers), for most cars, it's likely they use 400kWh or less per year - at least most of the time.
In the 4 years we've had our P85, I'm guessing that for 3 of those years, we probably used less than 400kWh for long distance charging, so we wouldn't have been impacted by the new fees. This last year we made a 2500+ mile road trip - and would have had to pay fees for much of that trip, and any subsequent shorter road trips.
Since Tesla hasn't yet delivered the promised (by year end) details for the supercharger fee plan, we don't know how much of a price increase this will be.
We're planning to purchase a replacement for our P85 - and will include a projection of the lifetime supercharger fees when we calculate the cost for the purchase.
Until Tesla can sustain profitability OR they see demand drop of the Model S/X (due to high prices) OR they start seeing competition for the Model S/X (at lower prices), seems likely Tesla will maintain their current prices, and if their costs drop, they'll keep the additional profit to help cover their costs.
I agree with you, it will end up essentially being a price increase. I don't really expect a price reduction. And it benefits those of us who already have a Tesla.
SW2Fiddler
We Are Cognitive Dissidents
In 2 days this issue will be moot and the thread will drop off the leaderboard. Electrek hasn't mentioned anything and they would have heard about any price adjustment.
Still, out of curiosity I will be checking the Tesla website to see if there are any changes January 1, but I'm good for 4 years regardless.
One way you could parse this situation is not to wish for a price reduction, but to realize that Tesla was about to institute a price increase, as follows:
For price $X, Teslas ordered before 1 Jan will include "A".
For the same price $X, Teslas ordered thereafter will not include "A". Ta da: a de facto price increase.
At this particular 2016/7 cycle, the "A" is defined as unlimited supercharging.
And, indeed, not only is this exactly what Tesla did BUT standard economic theory suggests that when faced with a relatively inelastic demand curve, the profit-maximizing organization will raise prices. TM certainly has shown itself to be iconoclastic in many situations...but not necessarily in all. Case in point.
And, depending on what time zone you are in, you have from 1 to 2 more days to hit the button. Call now. Phonebots are standing by.
For price $X, Teslas ordered before 1 Jan will include "A".
For the same price $X, Teslas ordered thereafter will not include "A". Ta da: a de facto price increase.
At this particular 2016/7 cycle, the "A" is defined as unlimited supercharging.
And, indeed, not only is this exactly what Tesla did BUT standard economic theory suggests that when faced with a relatively inelastic demand curve, the profit-maximizing organization will raise prices. TM certainly has shown itself to be iconoclastic in many situations...but not necessarily in all. Case in point.
And, depending on what time zone you are in, you have from 1 to 2 more days to hit the button. Call now. Phonebots are standing by.
green1
Active Member
Tesla has continually increased the price of the MS right from day 1. There's no reason to believe they'd change course now and suddenly start decreasing it.
There is not a single Tesla Model S or X produced that does not have the hardware to Supercharge. The $2000 was used to cover everything related to Supercharging. Building the network, maintaining it, powering it, ... The hardware inside the car is the smallest cost factor in the entire mix.
Canuck
Well-Known Member
Tesla doesn't separate out revenue like that. $2,000 was an arbitrary number only. For a time, supercharging was an option in smaller battery vehicles to allow for a lower cost vehicle in order to appeal to a broader market.
Of course they won't reduce the price. That's why they announced the removal of free supercharging well in advance -- so they would get a bump in sales before year end. Also, the new cars do not lose value because you can't buy a new one with free supercharging -- so the value of a new car is the same for every vehicle after Jan 1. However, the value of a used car may have increased.
Lex
Member
I remember the number being $2500 (could have been $CDN though) and was based on the fee that used to be charged to purchasers of the 60 pack who wanted Supercharging.
So extending this (whatever the figure) we had just assumed that this was the cost that they used internally to account for the average cost of Supercharging per car, over the life of the car.
But I agree with the majority here, this is an implied price increase. And IMHO it is positive as it will put more money into the Superchargers.
Right now I am quite alarmed at the lack of a service-level agreement (SLA) on the SC stations. There are international electrical contractors who would be happy to strike a deal to repair and maintain the existing Superchargers, if not to also install the new ones. I had a couple of alarming experiences this year personally, and let's not forget the sabotage in the LA-Vegas station that reportedly took a month to repair.
When traveling in a Tesla, Superchargers have become more of a vital link, than a nice-to-have.
So extending this (whatever the figure) we had just assumed that this was the cost that they used internally to account for the average cost of Supercharging per car, over the life of the car.
But I agree with the majority here, this is an implied price increase. And IMHO it is positive as it will put more money into the Superchargers.
Right now I am quite alarmed at the lack of a service-level agreement (SLA) on the SC stations. There are international electrical contractors who would be happy to strike a deal to repair and maintain the existing Superchargers, if not to also install the new ones. I had a couple of alarming experiences this year personally, and let's not forget the sabotage in the LA-Vegas station that reportedly took a month to repair.
When traveling in a Tesla, Superchargers have become more of a vital link, than a nice-to-have.
That's not what Tesla said. The hardware and software was in all the 60s, but to keep the entry price down Tesla didn't collect the $2000 unless it was activated (or $2500 after purchase). The same process Tesla uses now for autopilot hardware. Elon even broke it down-- he said $1000 was for the hardware and $1000 was for the software. Building and powering the network was considered marketing expense, at least for the infrequently used superchargers that allowed long distance travel.
bonnie
I play a nice person on twitter.
Ryan MF
Member
I would venture to guess 90%+ supercharger enabled cars do not even charge 400kWh/yr. Many people only take one or two long trips a year but need the flexibility. So it's more of a theoretical reduction in value. Conversely having a more accessible, less busy supercharger network is an increase in value to all Tesla owners.
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