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500 + Mile Range Debate
- Thread starter Kee_Chain
- Start date
ZenRockGarden
Active Member
Nope. They run a thin margin on the raw energy costs, and use it to perform (excellent) maintenance on the stations. It is NOT a profit center.
Says who? Not Elon.
When asked how much profits SC make he said they aim for 10%. There's a ton on this, including their financials. Nothing suggest they "break-even".
ZenRockGarden
Active Member
You are again not understanding the difference between a 10% margin on energy prices vs the overhead to build, maintain and upgrade the stations.
Elon if Super Chargers are Profitable: "We aim for 30% GM or ~10% profitability, all costs included"
He said this again at the investors meeting.
Again, there's 0 saying they break-even on SCs.
How so? More chargers (in favor of)=more maintenance. Initial cost would be marginally better as less chargers, but same costs as running many of infrastructure issues with a few stalls less?
Yet for maintaining those superchargers which Tesla does let's be honest a lackluster job, they just happen to have the best initial product that works.Tesla likes to more replace with new then fix old. One still has to maintain. Don't see how less is more in this situation. Same drive to fix, just less stalls. Someone still has to be there.
Do you need the tweet to reference? Or are we in agreement about the "misunderstanding"? Elon has been pretty clear on the gross margin vs. profit on Super Chargers including the cost on servicing, etc.
ZenRockGarden
Active Member
He's farming the 10% into buying key pieces of land and making MORE supercharger stations which is costly.
The idea that Tesla would keep batteries artificially small to drive profits at superchargers is silly.
I never said anything about Tesla keeping batteries artificially small for SC, only refuted your premise that they do not make profits on SC. They do. He's said it multiple times now 30% gross margins and 10% profitability with all costs included (cost as in service/acquisition/leases..which most are). They upcharge the energy they get based on the cost of the site and service. You can see this where 2 SCs are connected to the same power company.
You would also have to be crazy to think Tesla wouldn't be attempting to make a profit on SCs. They are a business. Maybe when they first started it was something said in passing, but that's not the case now and Tesla/Elon have been very clear about it.
Yes, Tesla can put larger batteries but they don’t. Smaller batteries means they can make and sell more cars at more affordable prices. Remember, Tesla is going downmarket to increase sales volume. This also drives profits at SC.
ZenRockGarden
Active Member
Totally agreed. Ford has just said the same thing. The money is coming from selling cars, not recharging them.
Tesla could have been battery constrained if they chose to go the route of 500 mile options, plus the chargers would be taken up longer, creating a worse overall experience. There are a list of reasons why Tesla hasn't provided much higher ranges including cost, scalability, and even user experience. I don't think there's much of an argument that they are doing it to drive more SC use.
ZenRockGarden
Active Member
If you read the thread, the claim WAS that Tesla is avoiding 500 mile batteries in order to make profits at their superchargers, which is silly.
Tesla makes its money selling CARS (and amusingly selling the green credits they get from selling cars). MORE cars is what they want to do. Bigger batteries would mean less cars, less credits, and would have little to no impact on overall supercharger "profits" which are just farmed back into making more supercharger stations.
I understand that, but I was only responding to you saying they didn't make profits on SC. That's it.
Regardless of the context, bad info is bad info. No?
That could be true if order backlog were very long, which is not definitively the case for model S, whose battery format is different than M3 MY.
In addition, normally the target is to make profit, not to sell more. Bigger battery = higher price = higher profit
That's not how it works. The S/X are not overly popular due to price and the M3/Y saw a massive increase with the price drops. Price is more important than range, plus almost everyone else is battery constrained. Tesla intentionally delayed CT/Semi for a while to produce more 3/Y.
Hey, you said before that the reason why Tesla is not going for 500 miles is because they would be battery constrained.
I replied that it is not a reason for model S.
You say that this is not how it works but at the same time confirm that MS is not overly popular due to price.
Well in substance you are confirming that Tesla is not constrained on MS batteries.
It is also possible that low MS sales are due to lack of range increase, despite batteries improved a lot since when they started to install a 100 kWh battery some years ago.
Market is not composed by the people who have already chosen EVs, but also -the large majority-by people who did not make the EV choice exactly because of range limitations.
I’m pretty sure that if MS had a 130 / 150 kWh battery, sales would surge again.
Can you imagine what a market impact would have a MS with 520 -550 EPA range?
We saw it when it launched plaid + version: even if at a huge price, it was a great success.
Model S (and X) are going to take some serious redesign to fit 50% more battery in the chassis. I think there are a limited number of people who aren't buying a 400-mile Model S today who would buy one if it had 600 miles of range - unlikely enough to justify the aforementioned redesign. Also, the S is already a heavy car; adding 500+ pounds of additional battery pack isn't going to do it any favors in the ride and handling departments.
ZenRockGarden
Active Member
Yes. A 500 mile range Model S/X would be horrifically expensive, heavy, and in the exact opposite market direction from what Tesla is trying to do in making very large numbers of mass-market affordable electric cars ala future Model 2
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