Game changing idea to greatly reduce the cost of a new Tesla

[walla2]

Show us how that math works?

Bank financed Tesla model 3 with battery $35000. Monthly payment at 3.25 for 72 months = 535.

Bank financed Tesla model 3 without battery $20,000. Monthly payment $306 for 72 months. Leased battery for $189-229 per month goes to Tesla Motors instead of bank of America.

 

[DFibRL8R]

Bank financed Tesla model 3 with battery $35000. Monthly payment at 3.25 for 72 months = 535.

Bank financed Tesla model 3 without battery $20,000. Monthly payment $306 for 72 months. Leased battery for $189-229 per month goes to Tesla Motors instead of bank of America.

Since I live in a state that charges annual personal property tax on a vehicle based on it's assessed value, I like the idea of separating the cost of the battery from the cost of the car. I find it annoying that EV's (and hybrid) owners are taxed annually on the value of their battery and feel it is a deterrent from people spending extra money to buy advanced technology that reduces CO2.

 

[apacheguy]

@OP - Your idea eliminates the most convenient aspect of owning an EV - refueling at home while you sleep. Sorry for being blunt, but I don't see anyone going for this.

 

[deonb]

Bank financed Tesla model 3 with battery $35000. Monthly payment at 3.25 for 72 months = 535.

Bank financed Tesla model 3 without battery $20,000. Monthly payment $306 for 72 months. Leased battery for $189-229 per month goes to Tesla Motors instead of bank of America.

Tesla financed Tesla model 3 with battery $35000. Monthly payment at 3.25 for 72 months = 535 goes to Tesla Motors instead of bank of America.

If Tesla wants to be in the financing business, nothing is stopping them. Why single out the battery?

 

[richkae]

Bank financed Tesla model 3 with battery $35000. Monthly payment at 3.25 for 72 months = 535.

Bank financed Tesla model 3 without battery $20,000. Monthly payment $306 for 72 months. Leased battery for $189-229 per month goes to Tesla Motors instead of bank of America.

The characterization of money going to bank of America instead of Tesla is flawed. When you buy a car from Tesla and finance it with a bank, Tesla gets all their money up front. The bank takes the risk you are going to default and collects a fraction of the money in interest.
Tesla can get into financing if they want.

 

[stopcrazypp]

The characterization of money going to bank of America instead of Tesla is flawed. When you buy a car from Tesla and finance it with a bank, Tesla gets all their money up front. The bank takes the risk you are going to default and collects a fraction of the money in interest.
Tesla can get into financing if they want.

I was going to say the same thing. When the bank finances, Tesla gets all the money upfront and it's the bank's problem. If Tesla finances, Tesla takes the risk and can't count the "sale" in full (only the monthly payments).

Tesla eventually will probably get into financing, but I imagine it'll be for the whole car, not just the battery. Battery lease hasn't been that popular, and it's mainly there to address initial concerns about battery longevity.

It's only going to be less and less relevant as battery costs go down and consumers gain more confidence in battery longevity (Tesla is doing well in this regard even without a degradation warranty, because data so far from Model S and Roadster is showing the battery is wearing far better than other EVs like the Leaf).

 

[walla2]

The characterization of money going to bank of America instead of Tesla is flawed. When you buy a car from Tesla and finance it with a bank, Tesla gets all their money up front. The bank takes the risk you are going to default and collects a fraction of the money in interest.
Tesla can get into financing if they want.

You are not thinking clearly. Financing generates more money than a lump sum. Tesla could get into financing batteries not cars.

And unlike financing a car that rapidly depreciates. They are financing batteries that would less quickly depreciate or since they could be recycled and turned into new high dollar items unlike a car. The bank takes the risk on the quickly depreciating item.

 

[deonb]

You are not thinking clearly. Financing generates more money than a lump sum. Tesla could get into financing batteries not cars.
.

I can think of 10 better things Tesla can do with capital rather than loaning it out at 1.5%.

Heck if a new Supercharger location just sells 1 car every 2 years, it be double that.

 

[1101011]

Tesla has gone great lengths to build an infrastructure to give us long distance range. Adding the costs associated with this concept clearly is not within the financial capabilities of this company.

I suggest the existing plan is quite successful. Stick with a plan that works.

 

[30seconds]

If the money is going to tesla plus bank vs bank only there is no benefit to the consumer. In other words this doesn't change my monthly outlay, but make life a whole lot less convenient.

Tesla could also accomplish this by limiting charging to tesla only stations and then charging you for it.

really makes the whole experience much worse in my opinion

 

[mdevp]

I agree the OP's idea will not work. I love waking up to a full tank everyday. However the Gogoro scooter is using the exact same idea the OP has. Owners can't charge, they have to manually swap the battery at swap stations throughout the city. They article calls it the "Tesla of Scooters" which is pretty far-fetched IMO.
Gogoro Smartscooter is available and it looks incredible - Business Insider

Maybe this idea will work, maybe not. I'm curious to see if its successful, and I think its only available in Taiwan atm. Maybe the OP's idea will work with a smaller car and only in a larger city, like in China where its harder to setup home chargers. Also swap stations would be closer to owners for easier battery switching.

 

[Johan]

I disagree with everyone here dissing the OPs idea. I think he is correct (but I don't think Tesla should do this - I'll get to why later) it could be done and that there should be an option kind of like the "cheapo" option. Imagine it right at this point in time: Tesla comes out with the news tomorrow that they still have the $76k Model S 70D but starting tomorrow there will also be the $49,999 Model S 70D"*

Notice the "*"? It means:

*The car comes without a charge port. The battery of the car is owned by Tesla, you will own the car. You will only be able to refill range by visiting one of our BatterySwap stations. Each swap will cost a set amount of dollars, in accordance with your SwapRate agreement that was agreed upon purchasing the car. As the battery belongs to Tesla you will agree to plug the car in to the electric grid in accordance with your PlugMeIn agreement, or face economic sanctions as per the contract. Using 3rd party batteries is forbidden - You will agree upon Tesla having the right to reposess the car should you remove the TeslaPack.

Now this would get a whole other type of people in to the game - people who normallly couldn't dream of buying a Tesla. They would stay in agreement with the PlugMeIn agreement since they wouldn't afford getting penalty payments for not being plugged in enough (remember these are people who stretched to buy a Tesla). This gives Tesla access to a virtual giant battery for a large part of the day and night, that they own. This would be making Tesla the world leader in distributed load balancing services. Tesla can basically say to the utilities: "You want to rent a 50GWh battery (bit arbitrary number but in the ballpark) from us every night"? How much is this worth? Ballpark answer: ALOT.

I still think they shouldn't do it 'cause it's not just the classy thing to do.

 

[Yggdrasill]

*The car comes without a charge port. The battery of the car is owned by Tesla, you will own the car. You will only be able to refill range by visiting one of our BatterySwap stations. Each swap will cost a set amount of dollars, in accordance with your SwapRate agreement that was agreed upon purchasing the car. As the battery belongs to Tesla you will agree to plug the car in to the electric grid in accordance with your PlugMeIn agreement, or face economic sanctions as per the contract. Using 3rd party batteries is forbidden - You will agree upon Tesla having the right to reposess the car should you remove the TeslaPack.

Pretty sure that last term is invalid in pretty much any jurisdiction. If you buy a car you can do basically whatever you want with it. You'd have to structure it so that you pseudo-lease the car instead of buying it. And I'm almost certain the customers wouldn't go for it.

Tesla should keep doing what theyre doing. With technology improvements and increased volume, the cost of the battery as a percentage of the cost of the car will keep dropping. The sort of agreements where you buy the car and lease/rent the battery will become less and less meaningful. In a decade, a $30k EV might contain a $4k battery for a 200 mile range. It would make no sense to offer the car for $26k but with a battery lease.

 

[Johan]

Pretty sure that last term is invalid in pretty much any jurisdiction. If you buy a car you can do basically whatever you want with it. You'd have to structure it so that you pseudo-lease the car instead of buying it. And I'm almost certain the customers wouldn't go for it.

Tesla should keep doing what theyre doing. With technology improvements and increased volume, the cost of the battery as a percentage of the cost of the car will keep dropping. The sort of agreements where you buy the car and lease/rent the battery will become less and less meaningful. In a decade, a $30k EV might contain a $4k battery for a 200 mile range. It would make no sense to offer the car for $26k but with a battery lease.

They become less meaninful only if you forget to factor in the value of how Tesla OWNS this huge battery for a large part of the time and can rent it out.

 

[Yggdrasill]

They become less meaninful only if you forget to factor in the value of how Tesla OWNS this huge battery for a large part of the time and can rent it out.

Yeah, I don't see the attraction for the customers.

What Tesla should instead do is sell the cars to people just as they are now, and then offer a charge mode setting "Smartcharge" where Tesla will determine when the electricity is cheapest and charge the car, controlled over the wireless connection, and all you have to do is set the time and desired SOC. Then, Tesla should turn around and sell the dynamic load characteristics of all the participating Teslas to the utilities.

This way Tesla gets to use their customers batteries for balancing the grid, for free! And the customers get the cheapest possible electricity! And the utlities get a well-functioning grid at minimal cost! Win, win, win!

(The above is what I expect Tesla will actually do, based on page 11 here: http://www.eia.gov/conference/2015/pdf/presentations/straubel.pdf )

 

[richkae]

I disagree with everyone here dissing the OPs idea. I think he is correct (but I don't think Tesla should do this - I'll get to why later) it could be done and that there should be an option kind of like the "cheapo" option. Imagine it right at this point in time: Tesla comes out with the news tomorrow that they still have the $76k Model S 70D but starting tomorrow there will also be the $49,999 Model S 70D"*

Notice the "*"? It means:

*The car comes without a charge port. The battery of the car is owned by Tesla, you will own the car. You will only be able to refill range by visiting one of our BatterySwap stations. Each swap will cost a set amount of dollars, in accordance with your SwapRate agreement that was agreed upon purchasing the car. As the battery belongs to Tesla you will agree to plug the car in to the electric grid in accordance with your PlugMeIn agreement, or face economic sanctions as per the contract. Using 3rd party batteries is forbidden - You will agree upon Tesla having the right to reposess the car should you remove the TeslaPack.

Now this would get a whole other type of people in to the game - people who normallly couldn't dream of buying a Tesla. They would stay in agreement with the PlugMeIn agreement since they wouldn't afford getting penalty payments for not being plugged in enough (remember these are people who stretched to buy a Tesla). This gives Tesla access to a virtual giant battery for a large part of the day and night, that they own. This would be making Tesla the world leader in distributed load balancing services. Tesla can basically say to the utilities: "You want to rent a 50GWh battery (bit arbitrary number but in the ballpark) from us every night"? How much is this worth? Ballpark answer: ALOT.

I still think they shouldn't do it 'cause it's not just the classy thing to do.

Sorry, but the idea of not putting a charge port on the car is insane.
It would be an order of magnitude cheaper for everyone concerned to just charge the car normally. Forcing them to only charge through a swap adds unnecessary cost and inconvenience and throws away the best part of an EV.
Making people pay for the battery through the incredible inefficiency of paying for swaps is like forcing people to take a payday loan. It is almost predatory when there is a clearly better way.

If Tesla wants to sell cars and lease batteries, there is an argument to be made to try it - but don't take the charge port off.
Better Place tried the battery lease thing and it failed, I would strongly consider selling my stock if Tesla tried.
If Tesla made a battery swap only car with no charge port I would immediately sell my stock.

 

[Johan]

Sorry, but the idea of not putting a charge port on the car is insane.
It would be an order of magnitude cheaper for everyone concerned to just charge the car normally. Forcing them to only charge through a swap adds unnecessary cost and inconvenience and throws away the best part of an EV.
Making people pay for the battery through the incredible inefficiency of paying for swaps is like forcing people to take a payday loan. It is almost predatory when there is a clearly better way.

If Tesla wants to sell cars and lease batteries, there is an argument to be made to try it - but don't take the charge port off.
Better Place tried the battery lease thing and it failed, I would strongly consider selling my stock if Tesla tried.
If Tesla made a battery swap only car with no charge port I would immediately sell my stock.

Aha. So you did read the last line of my post:

I still think they shouldn't do it 'cause it's not just the classy thing to do.

 

[dsm363]

It's not only not classy but probably a bad business decision. Expensive and impractical. Home charging is one of the main advantages for driving electric.

 

[Johan]

It's not only not classy but probably a bad business decision. Expensive and impractical. Home charging is one of the main advantages for driving electric.

For most yes. Just like most people don't live paycheck to paycheck, but a not inconsiderable amount do. And who will adress this demographic? Someone will but I rather it not be Tesla.

 

[richkae]

I just want to drill in to the "no charge plug" thing a little more.

If your car has a 200 mile range, but the swap station is 25 miles away anytime you pick up a new battery you get home with only 175 miles of range left.
If you ever return home with less than 25 miles on the battery, you are stuck, and it is useless. So you cant use the bottom 25 miles, except to go to the swap station.
So you can only use those middle 150 miles of range.
But it would be crazy to ever return home with just 25 miles range, because the first thing you would have to do - before you could go anywhere else - is drive to the swap station, even if it isn't on your path. So you would never return home with just 25 miles of range, you'd want to have at least 50. So that way you had the option of a quick trip without swapping, or stopping somewhere first on your way to the swap station.
So now your 200 mile range car really only has 125 miles of usable range.

Instead just buy or lease a cheaper EV with 125 miles of range and plug it in at home. You get the added benefit of not having to waste about 1/3 of your miles just driving to the swap station.