How would you prefer to pay for Supercharging?

[stopcrazypp]

The point is that on a per car basis, the capital needed is less. There is some overhead to maintaining a national network to link highways that is probably underutilized and so the costs for those will decrease on a per car basis as more cars hit the road.

The superchargers are actually not heavily networked. There is monitoring for consumption and errors, but there is no authorization happening on the station side (unlike speculated by others).
The highest capital costs are the station equipment/installation and ongoing electricity. They have already made enough stations that there isn't much economy of scale to be had on the stations and electricity costs does not decrease per car. I don't see there being a significant reduction in costs per vehicle (esp. the 2-4x suggested).

 

[Booga]

The superchargers are actually not heavily networked. There is monitoring for consumption and errors, but there is no authorization happening on the station side (unlike speculated by others).
The highest capital costs are the station equipment/installation and ongoing electricity. They have already made enough stations that there isn't much economy of scale to be had on the stations and electricity costs does not decrease per car. I don't see there being a significant reduction in costs per vehicle (esp. the 2-4x suggested).

1) But you can get more use out of stations that aren't busy, right? That means that on a per car basis, it does decrease.
2) You're right about electricity, but that can be easily adjusted with a subscription model. Instead of electricity "for life" plans, it might be a limited time based on what you buy.

 

[stopcrazypp]

1) But you can get more use out of stations that aren't busy, right? That means that on a per car basis, it does decrease.
2) You're right about electricity, but that can be easily adjusted with a subscription model. Instead of electricity "for life" plans, it might be a limited time based on what you buy.

1) My assumption is a similar level of service overall and similar ratios of popular to unpopular stations as the network grows. Having more cars will increase utilization rate in unpopular stations, but at the same time, Tesla still has to expand (there will be new stations built in unpopular places). Of course if Tesla just lets stations get congested and saturated, that is a different case, but I don't think Tesla will operate under that assumption.
2) This actually falls into what the PPU side suggests. I'm talking about a pure one-time payment however.

 

[Rocky_H]

This logic does not compute. A less expensive car does not reduce the supercharger network costs per car for Tesla.

Well, that was not my logic, though. I never said that. I said that higher price of the option would be harder for people to tolerate in a cheaper car, not that it would be less load on the Supercharger system.

In fact, people are claiming the opposite (that a less expensive car would use the supercharger network more). So you can easily say that the price should be expected to be even higher than $2000.

I've heard that discussed back and forth, and I am on the side that is the opposite of that. I disagree that a less expensive car would use the Supercharger network more. From seeing much of the demographic of most current Model S owners (expensive cars), it seems a significant portion of them are older and retired and have much more time to travel and go on vacations. The cheaper car demographic seems to be younger people who are busy in their lives with work and children and do not have as much vacation time available away from their jobs to do a lot of traveling.

Anyway, here is the other big factor of the lesser price per car. I didn't spell this part out before, and I should have. In the past few years, in the very beginning of the Supercharger network, what was built and where did the money come from? During those first few years, obviously the vast majority of the cars were sold in the huge wealthy urban areas on the coasts, obviously S.F. and L.A. being the biggest. That is still mainly the case, since it has been primarily a very expensive car that is much harder to afford in the flyover 2/3 of the country in the middle (plus lack of service centers). However, they have built many many Superchargers through the middle of the country to connect highway routes. They have built dozens of them through Montana, Kansas, South Dakota, Minnesota, Wyoming, etc. that have hardly any Tesla cars there. They have built up quite a large network, covering most of the U.S. with a pretty small number of cars (large amount collected per car). Most of those sit empty most of the time, but they do need to be there for the occasional traveler. So, since it took a lot of money to build that, and most of the country is covered with lots of excess capacity available for many years to come, the amount of stations to be built in the next several years is far less. In other words, many people in the middle of the country who couldn't afford Teslas before will be able to get a Model 3 now. But their Supercharger stations are already built from the previous Model S and X sales. To put it even more simply, early on, a few cars on the coasts were having to foot the bill for building across the whole country. Now, there will be many cars across the country only having to foot the bill for fewer additional stations on the coasts.

There are still some gaps left to fill in the next couple of years, but that is a smaller portion than what has been done. What mostly remains is just putting in a few stations here and there, 10, 20, 30 miles from some others in very dense areas that start to accumulate some crowding. That is a far smaller ongoing expense than the first few years of building these first few hundred stations from nothing!

 

[ccutrer]

They have built dozens of them through Montana, Kansas, South Dakota, Minnesota, Wyoming, etc. that have hardly any Tesla cars there.

Heh, I was just pondering and discussing last night how awful Supercharger coverage is in Wyoming and Nebraska. You can't even travel through those states in the winter, and in summer only by hypermiling by traveling 55mph in 80mph zones, without climate control, and still having to stop at random RV parks to charge for several hours.

 

[jgs]

The superchargers are actually not heavily networked. There is monitoring for consumption and errors, but there is no authorization happening on the station side (unlike speculated by others).

Er, I think @Booga was describing the Supercharger network as, um, a network in the general sense, not the data-networking sense. As with any network, low average utilization means it's harder to share costs for the underutilized pieces. If they can build demand to the point where currently underutilized corridors are fully utilized (but not congested, please not that), then presumably average per-packet, I mean per-vehicle, costs fall. I'm not sure I buy 2-4x, but then again I think the precision with which people imagine they can see into Tesla's Supercharger cost model is pretty amusing to begin with.

 

[Rocky_H]

Heh, I was just pondering and discussing last night how awful Supercharger coverage is in Wyoming and Nebraska. You can't even travel through those states in the winter, and in summer only by hypermiling by traveling 55mph in 80mph zones, without climate control, and still having to stop at random RV parks to charge for several hours.

Oh, whoops. I was naming off some of the random low-population states in the Western-middle U.S. I forgot that Nebraska and Wyoming specifically still haven't gotten their main interstate covered. I did sort of reference that with this line, though:
"There are still some gaps left to fill in the next couple of years, but that is a smaller portion than what has been done."

It's still cumbersome getting between Boise and Bend Oregon, even though the main interstates of Oregon have been done. So yeah, still some places that need finishing.

 

[callmesam]

Can I change my vote to have the property owners pay Tesla to bring in customers?

"Wherever we have a property, we're in discussions with Tesla," he said. Springfield already has eight less powerful "Destination Chargers" for the electric cars, four of them at O'Reilly properties such as Hilton Garden Inn. Roger Gildehaus, a former Walmart executive who is president and founder of Macadoodles, said this would be the eighth location for the high-end liquor stores. Macadoodles already has locations in south Springfield, Republic, Branson, Joplin and Columbia, along with two Arkansas stores. O'Reilly is providing the land for the Superchargers; Tesla will pay for their construction. Periodically, O'Reilly Hospitality Management will pay a "small contribution" to have them at the Macadoodles site.

Macadoodles, with Tesla Superchargers, is coming to north Springfield

 

[jgs]

Can I change my vote to have the property owners pay Tesla to bring in customers?

Yeah, no kidding. That penny dropped for me when I realized I had just tried to plan a trip by looking for hotels with destination charging along the route. Unfortunately there were none, but if there had been they would have gotten my business with no pesky shopping around with the competitors.

 

[Rocky_H]

Yeah, no kidding. That penny dropped for me when I realized I had just tried to plan a trip by looking for hotels with destination charging along the route. Unfortunately there were none, but if there had been they would have gotten my business with no pesky shopping around with the competitors.

Yep, I suggested to hotels.com over a year ago that they need to get EV charging added to their list of amenities, like wi-fi or breakfast or laundry facilities. For an EV driver, that's usually the first condition they are looking for.
I've heard this question in the other forum a few times, "We're going to _____ and the hotel we're staying at doesn't have charging. What do we do?"
A few of us have to remind them that they got it backward. They should probably be using charging availability as a filter for deciding which hotel to choose.

 

[Red Sage]

An all or none option when it comes to SC access will hurt main stream adoption.

Correct. That is why it won't be done that way. More likely it will be 'Limited' or 'Forever' instead. You would only pay for the 'Forever' option.

While in my daily use I won't have need of a SC as I can charge at home and have a pretty short commute, the handful or so times I travel cross state or to my alma mater for a football game means that I'd need access to SC charging little enough that a $2,000 SC yes/no wouldn't make financial sense.

Correct. That is why it won't cost $2,000. Remember, this is meant to be the Tesla Generation III affordable vehicle. Charging twice as much for Supercharger access as the Reservation amount would be... inconsistent.

I also think the way Elon phrased it when talking about the Model 3 base not having SC charging lends to the idea of some sort of pay per use or pre-purchasing a set of kWh/month...maybe with rollover

As others have undoubtedly noted elsewhere in this thread and others, Tesla Motors would have to become a utility to 'sell' electricity. They do NOT want to go through the extreme levels of regulatory red tape that would be piled in front of them to do so. Please note that Elon did NOT say that Supercharging would NOT be available for the Model ☰. What he said was that it would NOT be 'FREE for LIFE!' by default. I believe that means there will be standard, but limited, Supercharger access on the base Model ☰. You would pay an affordable fee to extend that to unlimited access instead. And more expensive versions of the car, with higher capacity battery packs, would include Supercharger access with 'FREE for LIFE!' access. Also, notice that the Tesla Model S 60 has returned, but comes with full Supercharger access included now, for a lower base price than in 2013.

This is what I'd like to see...a pay per use model, but charged monthly.

This is pretty much exactly what everyone expected would be the case, way back in 2012, when Supercharger technology was first announced. Everyone expected that like cable television, terrestrial internet access, and wireless telephone, Supercharger access would be some type of monthly subscription service. So, Tesla Enthusiasts and Naysayers alike were very surprised to learn that for all equipped vehicles, Supercharger access would be 'FREE (of additional fees) for LIFE (the life of the car)!' on Tesla Generation II cars. This business model is simply too compelling to abandon at this stage in the development of the company. Perhaps, some day, when they are selling a direct competitor to Corolla, Civic, Golf, Cruze, Elantra, etc -- then they'll be able to modify the terms of Supercharger access somewhat. But no, I do not believe it will ever be pay-per-use.

 

[Red Sage]

Right, but they can access capital through the markets fairly easily now, so it shouldn't be an issue if it was just access to capital that they desired.

The capital accessed through markets should be earmarked for expansion of their manufacturing, sales, and service capacity. The Supercharger network can be fully funded through regular operational expenses attributed to their Marketing department. And those funds are generated by sales of the vehicles.

 

[callmesam]

Why would Tesla undermine the Destination Charging Network by instituting a pay per use fee on Supercharging? Just doesn't make any sense. Electricity is like wifi, you pay for it at home, but expect the businesses you patronize to provide it as a de minimis benefit of service.
Providing a charge costs less than a 10% off coupon from a restaurant.
Providing a charge costs less than a buy one get one 1/2 off entree coupon.
Providing a charge costs less than the value of 5 supermarket coupons. Without doubling.
Less than the cost of free breadsticks at Olive Garden.
Less than the cost of a free soda refill.

No other charging network has been able to provide the service and value that Tesla does and the more Blink and Chargepoint increase their rates, the more Tesla looks like the only serious game in town.

If the Destination Charging Network is willing to give away the juice for free to customers AND businesses are willing to pay Tesla to install Superchargers, then who does it benefit for a pay per use fee? I'm just having a hard time understanding.

 

[Red Sage]

Another way of looking at this is that it was included in the margins on a $90k car, was a $2k addition to the existing margins on a $70k car, and will be a $4k addition to the slim margin on a $35k car.

I'm not saying that's the case, but to be "absolutely certain" seems dangerously confident.

As your Friendly Neighborhood Over-the-Top Optimistic Tesla Motors Certified Apologist Fanboy, I'm more than willing to be 'dangerously confident'. If I'm wrong? Meh. I'm just some guy on the internet. What the heck do I know anyway?

But it is worth noting that the recently re-introduced Model S 60 costs less than it did in 2013, has a slightly greater range, uses a battery pack that can be unlocked to 75 kWh capacity, and includes full access to the Supercharger network. So, I would expect that Tesla Motors will be able to offer the Model ☰ in base format that may have limited Supercharger access. And the fee to unlock full, unlimited, 'FREE for LIFE!' access to the Supercharger network need not be more than a proportional amount of the expected profit margin for the $35,000 car. The original fee was meant to pay for adding DC fast charging hardware to the Model S 60. That hardware will be much less expensive due to economies of scale on Model ☰, and will be included in every car. So, I figure a $500 contribution would be enough to properly support the entry of Model ☰ vehicles to the Supercharger network going forward, since there will be so many more of those cars.

 

[Red Sage]

This logic does not compute. A less expensive car does not reduce the supercharger network costs per car for Tesla. In fact, people are claiming the opposite (that a less expensive car would use the supercharger network more). So you can easily say that the price should be expected to be even higher than $2000.

What is constant is the approximate amount of usage per stop. That is very likely to be a charge from 20% to 90% or so. With a 60 kWh capacity, that might be roughly filling from 12 kWh to 54 kWh. Or, adding ~42 kWh or so per stop when driving long distance. If you presume there is a 15% energy loss for induction during charging, Tesla Motors might pay for around ~49 kWh of electricity at each stop.

Imagine that 100% of administration, installation, and maintenance costs at Superchargers are handled by sales of Model S and Model X. If you are selling 500,000 of the Model ☰ per year, and are using $500 per car to contribute to the Supercharger network, that gives you $250,000,000 to pay for electricity. Tesla Motors has already told us that cost is actually rather negligible. So much so that they don't bother to call out the number in their SEC filings. Even if it were as much as $0.25 per kWh, that allows them a pool of 1,000,000,000 kWh. Or, enough to pay for 20,408,163 charging sessions at 49 kWh each. Yes. Over twenty million -- per year. And I doubt their overall cost for electricity is anywhere near that high. If it were only $0.10 per kWh, it would be enough to pay for over fifty-one million charging sessions per year.

 

[Red Sage]

They could easily make it a subscription as well. $500 for 3 years possibly.

You could, but I do not believe it will be done that way. The option for 'FREE for LIFE!' will be available. That has already been stated by Elon Musk.

I expect that a form of limited access will be the default, and will be based upon time frame of availability. It might be a short period of 1-to-3 months as an introductory trial period. It could be for 3, 4, or 5 years, as was internet access for Model S. It could be only to the original owner. It just would not be 'FREE for LIFE!' That is how Tesla Motors exposure would be kept in check.

Day passes, trip passes, monthly buy-ins, revolving automatic renewal subscriptions...? No. When the time limit ends, you can assess whether you found the Supercharger network useful or not. If you didn't use it at all, and just charged at home or some other third party charging network satisfactorily, you won't need to do anything. My guess is that most people would realize how vital the Supercharger network is to how they actually use the car, so they will purchase the 'FREE for LIFE!' option at that point. And, a very few people, who knew they wouldn't be keeping the car forever, might just pay a lower fee just to extend the limited access.

The next owner of the car would pay for 'FREE for LIFE!' access if they wanted it, but once again, this would be an activation fee, not a subscription plan, and not pay-per-use. It is a lot easier to process one or two transactions every five to eight years than having to do so on a monthly basis. Tesla Motors needs their money up front, not on a deferred payment plan. They can take your money today, or someone else's later on. It is a decent gamble that is well stacked in favor of the house. As it should be.

 

[TaoJones]

Yep, I suggested to hotels.com over a year ago that they need to get EV charging added to their list of amenities, like wi-fi or breakfast or laundry facilities. For an EV driver, that's usually the first condition they are looking for.
I've heard this question in the other forum a few times, "We're going to _____ and the hotel we're staying at doesn't have charging. What do we do?"
A few of us have to remind them that they got it backward. They should probably be using charging availability as a filter for deciding which hotel to choose.

Exactly. In the past month I've stayed at places in South Dakota, Maine, Vermont, Hilton Head, South Carolina, and, shortly, Montana. Most of the places at which I stayed did not yet have HPWCs. Those owners/GMs now have the link and a contact for Tesla's Destination Charging team, and were in each case receptive to the value proposition that I described.

I realized this trip that destination charging goes beyond market differentiation for the hotel (I first check Trip Planner and Plugshare for enabled properties). The place I stayed on Hilton Head Island (South Carolina) did not have HPWCs. So why did I stay there? Because it was within walking distance of an excellent family-run bar/restaurant with 2 HPWCs. ***So there is a radius effect as well***.

As an aside, the hoteliers in Maine wanted to charge as much as $35-$40/use to non-guests. This is their right - more power to them. No pun intended. The South Carolina HPWCs were free. Interesting perspectives from both camps in that regard. In time, as with wifi, I expect that all HPWCs will be free, although with priority given to paying customers (of course). As some of you will recall, in the early days of wifi, many places charged.

This is part of what makes the SC network so unique. Pay per use or any kind of transactional processing at the pedestal would throw a wrench into the kind of seamless elegance that has become a hallmark of all things Tesla (how many knobs or levers you got in yer chariot versus an ICE?). A case could be made for subscriptions, but it is worth noting that, to date, the entire network has been paid for by ZEV credits, and as noted above, money will continue to come from Operations/Infra (mostly distance) and Sales/Marketing (more density as time goes on). The network works today, and will continue to work without pay per use. There are all kinds of technological levers that haven't been pulled yet - have a little faith, ye of the FUD camp.

 

[Red Sage]

The highest capital costs are the station equipment/installation and ongoing electricity. They have already made enough stations that there isn't much economy of scale to be had on the stations and electricity costs does not decrease per car. I don't see there being a significant reduction in costs per vehicle (esp. the 2-4x suggested).

Hmmm... I just realized you are looking at this from the completely different end of the telescope as I am.

The economy of scale I refer to is the cost of the DC fast charging hardware in the cars themselves. Not the cost of the hardware that is installed in the field for Superchargers. Imagine that if Tesla Motors reaches a point where they are selling 100,000 of the Model S, 100,000 of the Model X, and 500,000 of the Model ☰ per year. And all of them have the DC charging hardware built in that allows them to use the Supercharger network, or alternatively, the CHAdeMO chargers. 700,000 units per year is vastly more than the 20,000 units of combined output of Model S and Model X that Tesla Motors hoped for in 2013.

The only reason there used to be a fee to add Supercharger access to the Model S 60 was to pay for the DC fast charging hardware that was added to the car if requested. It was not for the operation of, or installation of, the Supercharger network at all. Once Tesla Motors realized it was easier to simply include the DC fast charging hardware in every car during the manufacturing process, it was decided to make the fee for activating a software switch to use that hardware.

Now, since we know that the Model S 85 has included Supercharger access from the very beginning... And, that now the Model X and every iteration of the current Model S has Supercharger access included... We may speculate that the cost is built in to the margin of the vehicles, which we generally express as being 25% or so. With that in mind...

The Model S 60 is now $66,000 and includes Supercharging. You might presume that if it achieves a 25% margin, it cost around $49,500 to build. If the DC fast charging hardware were still an option, and if one assumes there was no reduction to internal cost due to economies of scale since 2012... Then the $2,000 fee to add it would be roughly equivalent to 12.1% of the $16,500 profit margin. [FYI: The number is only 11.4% of $17,500 with a $70,000 Model S 70 instead.]

Proportionately speaking, if there is only a 12% margin on the $35,000 Model ☰... The car would cost $30,800 to build... Making for a $4,200 raw profit, and 12.1% of that would be... ~$509. [ASIDE: And at 11.4% this would be $480, so $500 works as a good compromise.]

Just as it is presumed that the embedded $2,000 per Generation II vehicle is put toward the Supercharger network... I presume that a $500 amount per Generation III vehicle will join the Supercharger funding pot (yes, even if someone doesn't order the option). Therefore, even if 'only' 100,000 Generation II vehicles are sold per year, that yields $200,000,000 for the Supercharger network per year. And if 'only' 300,000 Generation II vehicles are sold per year, that adds another $150,000,000 to the pot.

OK, so with $350,000,000 to work with, even if you only used half of it to build Superchargers... And it cost around $400,000 to build an 8-stall location... You would have enough dough to build 437 of them from one year's earnings. And, with $175,000,000 left over for energizing them, even if you paid $0.25 per kWh, you'd have enough to buy 700,000,000 kWh of energy. If 49 kWh were expended during each charging session, you could do so 14,285,714 times. yeah. 14 million times. From the sale of 350,000 vehicles. Or, about 40 times each.

In a world where most people rarely use Superchargers at all, that's pretty good. Especially since the pay-per-use advocates seem to think they wouldn't use Superchargers 40 times in 20 years... We'll see.

 

[ohmman]

As your Friendly Neighborhood Over-the-Top Optimistic Tesla Motors Certified Apologist Fanboy, I'm more than willing to be 'dangerously confident'. If I'm wrong? Meh. I'm just some guy on the internet. What the heck do I know anyway?

My opinion? The downside to this approach is a steady erosion of one's credibility. That is, dangerous confidence is the sign of someone who is not using critical thinking in a particular realm. Once someone stops being remotely skeptical, they often become dogmatic, and then they lose their credibility.

Being a "guy on the Internet" is fine. But being a guy on the Internet who would like to come back to the Internet with respect, well, that's another thing. So yeah, I try to avoid being "dangerously confident". I teach my kids to be confident, but absolutely always make sure to leave the door open to being wrong. Humility is a virtue.

 

[Red Sage]

My opinion? The downside to this approach is a steady erosion of one's credibility. That is, dangerous confidence is the sign of someone who is not using critical thinking in a particular realm. Once someone stops being remotely skeptical, they often become dogmatic, and then they lose their credibility.

As I've noted elsewhere, I reserve my skepticism for the notion that the traditional automobile manufacturers will be able to build viable long range electric vehicles 'anytime they want' as Tesla Naysayers are wont to proclaim any time of day or night. As optimistic as I am for Tesla Motors, I am equally pessimistic about Ford, GM, Volkswagen, or Toyota matching their efforts from 2008 by 2020. Even the incredibly expensive Mercedes-Benz SLS AMG Electric Drive and ridiculously expensive RIMAC Concept One barely match/surpass the range of the Tesla Model S 40. I understand that some may see this approach as 'fairly unbalanced', as it were... That's OK with me. Because so many claim, relative to Tesla Motors, that they won't believe it until they see it, that I feel it is perfectly fine to use the same metric regarding traditional automobile manufacturers building proper electric cars en masse.

Being a "guy on the Internet" is fine. But being a guy on the Internet who would like to come back to the Internet with respect, well, that's another thing. So yeah, I try to avoid being "dangerously confident". I teach my kids to be confident, but absolutely always make sure to leave the door open to being wrong. Humility is a virtue.

Well, you've got that covered. You are undoubtedly respected. And, with good reason. This post being one of them.