Model 3 Supercharging Capable Discussion

[nwdiver]

Unlike the Model S for rich folks, the Model 3 is going to be a workhorse. People are going to depend on it far more than owners of the Model S. It must be reliable and people must be able to travel where they need to travel regardless of their economic status. Any upgrade to enable supercharging should be priced appropriately for that audience. Revenue can still be generated through volume of sales and margins included with other premium or luxury options.

A robust fast charging network is part of that reliability... if Tesla sells 500k cars in 2018 they probably need to spend ~$1B on the network in 2018. That money has to come from somewhere and the only viable source is from vehicle sales.

 

[JeffK]

A robust fast charging network is part of that reliability... if Tesla sells 500k cars in 2018 they probably need to spend ~$1B on the network in 2018. That money has to come from somewhere and the only viable source is from vehicle sales.

They don't need to keep spending $1B per year. A slower rollout will require less upfront costs. Look at what's already been accomplished with the lower volume Model S/X. A similar revenue can be generated with 1/4 to 1/8 the cost per vehicle compared to the Model S and X due to the volume of sales.

Charging $500 per vehicle would nearly than double any current revenue earmarked for supercharger expansion.
Consider if $2500 of every model S went to superchargers, that's $2500 * 50k per year
Now consider adding 400,000 cars times $500 each per year....

 

[stopcrazypp]

~*SIGH*~

Here the thing is... If you set aside $500 for every 500 vehicles sold... That comes to $250,000 -- probably enough to build a four unit Supercharger location. If half that amount is set aside for electricity, that $125,000 would buy 1,250,000 kWh at 10 cents per kWh. If you assume that most cars will add around 40 kWh before moving on, you can service 31,250 car charging sessions from the revenue generated from only 500 vehicles sold. Something tells me that Tesla Motors spends a bit less than ten cents per kWh at Superchargers.

Or, to put it another way... At $500 for each of 500,000 vehicles sold... That comes to $250,000,000. If you take half of that, $125,000,000 just to pay for electricity... You can charge 1,250,000,000 times adding 40 kWh to a battery pack. Vehicle sales can support all aspects of the Supercharger network.

Actually, according to Tesla's SEC filings, they have setting aside $500 per vehicle to account for ongoing costs alone (but only for 8 years), which includes not only electricity, but depreciation, lease, maintenance costs. The network itself is paid for by a combination of cost of sales (for popular stations) and as a marketing expense (for less popular stations).

For the deferred revenue, at $500 per vehicle for 8 years. Average American travels 13500 miles and at 33kWh/100mi (70D efficiency), that is 4455kWh per year total. Right now supercharger usage hovers at ~10% of total miles, so 3568 kWh over 8 years working out to a rate of $0.14/kWh.

We can compare to other networks:
Blink charges $0.49/kWh at the lowest.
Blink - Membership FAQs
EVgo charges $4.95/session plus $0.20/minute. At 50kW that $0.20/min = $0.24/kWh (session costs not included). If you do a 1 hour session, that is $16.95/50kWh or $0.34/kWh

So that $0.14/kWh rate seems low in the first place when factoring in network costs. But let's say if the average age of the Model S is 11.5 years like average cars, that will drop things down to $0.09/kWh.

However, the most worrisome for Tesla would be the ratio of supercharger to total miles goes too high. For example at 20%, that drops rate down to $0.07/kWh ($0.05/kWh if using 11.5 yrs).

A local that drives all miles on superchargers would have paid an equivalent of only $0.014/kWh ($0.0097/kWh if using 11.5 yrs) toward the ongoing costs of the network. Even if you quadruple the set-aside to $2000, that is still only $0.056/kWh ($0.039/kWh), certainly not enough to pay for all ongoing costs (much less network installation costs also).

This is the math Tesla likely had done in regards to the network and their decision on whether to include long distance supercharger free for life. This is also why Tesla is so adamant to emphasize "long distance", since long distance is a natural limiter on proportion of miles (trips over 100 miles make up only 15% of total miles for the US fleet).

 

[ksfrogman]

An anonymous reader writes from a report via The Verge:

"In response to a question about how the company would handle an influx of Model 3s to its Supercharging stations, which are currently offered as a free service to Tesla customers, Elon Musk said at Tesla's annual shareholder's conference in Mountain View, California, "it will not be free long distance for life unless you purchase that package." He did not specify what the "package" contained, nor did he say how much it would cost as an add-on with the purchase of a Model 3."

His full quote reads: "Obviously, [free Supercharging] fundamentally has a cost. [...] The obvious thing to do is decouple that from the cost of the Model 3. So it will still be very cheap, and far cheaper than gasoline, to drive long-distance with the Model 3, but it will not be free long distance for life unless you purchase that package. I wish we could, but in order to achieve the economics, it has to be something like that." Tesla did recently announce their Gigafactory Grand Opening will be held on July 29, even if it isn't scheduled to begin production on lithium ion cells until next year.

 

[Garlan Garner]

OK, then I paid Elon's salary too. Does that mean I get to call him up in the evening? I think that's a silly way of looking at things.

Stop it. Its not a silly way of looking at things. Its truthful. That's a nonsensical response. Elon Musk indicated many times that the Model S paid for Model 3.

 

[TaoJones]

Sigh.

Thus the sliding scale. Free for occasional use. Modest fee for some level above that. High fee for anything beyond.

If the intent of the Supercharger network is really to facilitate long distance travel, then eventually we'll need to get to a business model that encourages that scenario and discourages the "abuse" that congests the system for people trying to use it as intended.

It's not. Tesla has committed to DENSITY as well as to DISTANCE for almost 2 years now.

There's no problem at 97% of SCs today. Based upon today's poll, it's evident that a large number of potential M3 owners aren't interested enough in free for life SC use to pay for it, so the impact upon the SC network will be even more manageable.

The handwringing camp appears to be overly consumed with the creation of a complicated solution in search of a problem. Maybe all of that energy won't be a total waste, as one challenge in areas of metropolitan density will be fleets of livery. But a solution for that doesn't have to be complicated. Limit the use of the same SC location to twice a day. Your average local who doesn't leave a 25-mile radius won't use SCs more than twice a week, while livery can and does use SCs as much as 4x/day.

Again, we're talking about a problem that affects a very small percentage of the network at large. The underlying exclusionary rhetoric is what's most disturbing, followed by the advocacy for pay per use. Even Chademo networks today are optimized for monthly unlimited use subscriptions.

I trust in Tesla to recognize the foolishness of "transactions at the pump" and would be surprised if they start with that.

Having said that, I met multiple innkeepers this trip who would LOVE transaction-based processing at their HPWCs.

So in the end, there will be solutions for everyone - free for life and subscription-based for the M3, some limitation for livery, and some accommodation for those hosts who want to charge for HPWC use until that tipping point is reached (few places charge for wifi anymore as it is viewed as a competitive disadvantage).

 

[Cebe]

As in "the $35k version does not include supercharging". Fair enough.

 

[Phillip L]

As in "the $35k version does not include supercharging". Fair enough.

Absolutely reasonable. Part of the high cost of the Model S & X is the funding of the supercharger network included in the price. I never considered Supercharging free with my Model S, I considered it pre-paid. It SHOULD be considered an option with the Model 3. And yes I have pre-ordered one.

 

[Alketi]

Musk just tweeted:

​

Supercharger policy explained well by @LATimes: http://www.latimes.com/business/autos/la-fi-hy-tesla-model-3-chargers-20160601-snap-story.html…

Will post detailed description soon. I think it's a good balance.​

Elon Musk on Twitter

 

[Denarius]

With the Model S the 40s and 60s had to pay "extra" for supercharger access, it was included with the 85. I suspect it will be a similar situation with the model 3.

 

[Red Sage]

I would actually prefer that SC were 'pay-per-minute' with different rate scales depending on time, day of the week etc. I think doing so would value and manage SC resources better.

God, no.

 

[MP3Mike]

Musk just tweeted:

​

Supercharger policy explained well by @LATimes: http://www.latimes.com/business/autos/la-fi-hy-tesla-model-3-chargers-20160601-snap-story.html…

Will post detailed description soon. I think it's a good balance.​

Elon Musk on Twitter

I wouldn't say "detailed" unless there isn't going to be a pay as you go option. The only thing that article mentions is either buying the "free for life" option, or a package that includes it. No subscription, pay-per-use, or other option was mentioned. Perfect!

 

[Alketi]

I wouldn't say "detailed" unless there isn't going to be a pay as you go option. The only thing that article mentions is either buying the "free for life" option, or a package that includes it. No subscription, pay-per-use, or other option was mentioned. Perfect!

Musk said he himself would post a detailed description soon.

 

[MP3Mike]

Musk said he himself would post a detailed description soon.

Yeah, that dreaded word soon at least when it comes from Tesla or any tech company.

 

[stopcrazypp]

I wouldn't say "detailed" unless there isn't going to be a pay as you go option. The only thing that article mentions is either buying the "free for life" option, or a package that includes it. No subscription, pay-per-use, or other option was mentioned. Perfect!

I think Elon is saying that he will release a detailed description, not that the report had a detailed description. The report just did a better job of summarizing the comments Elon and JB said than other reports, but obviously the reporter can't read Elon's mind for details.

 

[Red Sage]

I prefer the pay-per-use (PPU) model, but largely because our Model 3 will be used as a commuter vehicle the vast majority of the time. If unlimited Supercharging is a reasonably-priced option, I may consider it, but at the $2000 cost it was on the Model S, I very strongly doubt I'd check that box.

Here the thing is... Lots of people may purchase a Model ☰ with the intention of it just being their daily commuter, that just happens to be a way to escape the ICE paradigm. They may expect to use it as merely a means to get from Point 'A' to Point 'B', and naught more than that. Then they will come to the realization of how wonderful the driving experience is, much more so than they ever thought possible. And they will want to drive more often than they ever have before. They will come up with any excuse to drive. They will even choose to be the default designated driver -- before anyone in the group can even call up the Uber/Lyft app on their phone. They will end up driving not only more than they thought they would, but more often, and further than they had any other car. With this type of forewarning, I urge you to consider if you will be among them. Because over the course of years of ownership you may well find that the cost of the optional 'FREE (of additional fees) for LIFE (the life of the car)!' feature is something that pays for itself over, and over, and over again. If you aren't someone who could be entranced, seduced, enamored by such an experience? You are much more strong-willed than I.

While I don't have the best understanding of how the Supercharger network functions, I cannot wrap my head around why some think a PPU system couldn't be installed. The Supercharger somehow has to differentiate between cars with unlimited and those without, otherwise everybody could charge, correct? Each PPU Model 3 would simply need a credit card linked to the car and when that car plugs in, the card gets charged for the amount of electricity it consumes.

Sure, a pay-per-use system could be installed as part of the Supercharger network. The problem is, it would suck. Credit card transaction fees, administration, customer service... All those things combined would have the affect of raising the price of charging to an unfair level, potentially more expensive than purchasing gasoline. The next-to-last thing that Tesla Motors needs is to be accused of becoming an unregulated, unlicensed utility. They cannot sell electricity at all. The regulatory hurdles they would need to navigate if they attempted to do so could halt their operations for months or years. They have enough issues just trying to get the right to do business as they please in a unified manner across the US. The last thing Tesla Motors needs is to have it known the vast majority of their Customers have credit cards on file and regularly accessed through their Supercharger systems. They have already been targeted by industrial and political interests. It would be that much worse to be targeted by Criminal agencies looking to rob people blind.

Though this model wouldn't bring in an immediate increased cash flow to build more Superchargers, it would end up as a continual source of revenue. For someone like me who may use a Supercharger twice a month on average, it would be perfect.

It would have the affect of increasing the number of people who were like you -- that don't intend to use Superchargers regularly at all. It would discourage people from taking part in the fullness of electric vehicle ecstasy through road trips. It would dampen the allure of Tesla Motors vehicles as compared to direct competitors, and lessen the advantage over ICE vehicles that cost less as well. Someone once said, "Not all money is good money." I think I know what that means now.

 

[S'toon]

OK, then I paid Elon's salary too. Does that mean I get to call him up in the evening? I think that's a silly way of looking at things.

Musk's salary is only a paltry $35K a year.

 

[ohmman]

Musk's salary is only a paltry $35K a year.

In that case, for what I paid for my S and X, I definitely get to call him up in the evenings.

 

[Red Sage]

Tesla will need ~$500M/yr to expand the network to support the model 3. They don't sell enough Ss and Xs... where's that supposed to come from if not vehicle sales? $2k is <10% of the cost of a model 3... if you can't afford it you can't afford it. Money has to come from somewhere.

Uhm... $500,000,000 divided by 500,000 units of Model ☰ comes to $1,000 per car. If a combined 120,000 units of Model S and Model X per year contributes $2,000 each to the fund, that comes to $240,000,000. So, if you only used $500 per Generation III vehicle, you could combine that with funds from Generation II sales, you'd be at $490,000,000. Close enough, I think. If you presume an 8-stall Supercharger location costs ~$400,000 to set up, that's enough to install 1,225 Superchargers per year. Still at around 506 cars per location, much better than the 2,083 vehicles per gas station in the US.

 

[S'toon]

In that case, for what I paid for my S and X, I definitely get to call him up in the evenings.

I view it the same as when people tell cops "My taxes pay for your salary!" If I were a cop I'd toss a nickel (no pennies in this country) and tell them "Here, there's that portion of your taxes that paid for my salary."