Model S battery pack upgrade *will* happen, per Elon Tweet

[AmpedRealtor]

Tesla called me today since I was on the interest list for the battery. They quoted me $22,500 minus $2,500 credit for my current battery "core", so $20,000 plus 1.75 hours of labor. This call came from Fremont, not my local service center. I see this is different than what other people were told. It's possible I misunderstood. Either way, though, it's to rich for my blood!

 

[yobigd20]

Tesla called me today since I was on the interest list for the battery. They quoted me $22,500 minus $2,500 credit for my current battery "core", so $20,000 plus 1.75 hours of labor. This call came from Fremont, not my local service center. I see this is different than what other people were told. It's possible I misunderstood. Either way, though, it's to rich for my blood!

They obviously don't want anyone to upgrade.

 

[tinm]

Yeah this happened to me yesterday. I was driving along and noticed a call coming in from a 510 area code.

"Hello?"

"Hi this is so-and-so from Tesla. You expressed interest in the 90kWh battery upgrade?"

"Uh huh."

"Well, we wanted to let you know it's available now."

"How much?"

"The battery upgrade is $22,500."

"Wh--WHAT? Wait, you're joking right?"

"No, sir, it's $22,500."

"Well, that's a showstopper right there. That costs more than half what I suspect my car is now worth. Why would anyone in their right mind pay that much just to get 5kWh more on their battery?"

". . . "

"Perhaps this is a clever strategy on Elon's part to get us all to buy new 90D cars. Well. So much for upgrading my existing battery. Not gonna happen, I'm afraid."

"Ok, sir, I will remove you from the list. Have a nice day."

She couldn't care less. I hope every single person getting this call is telling her something similar. This is highway robbery on the part of Tesla. I hope every customer says NO WAY. I can only imagine what a 95kWh battery, let alone a 100kWh battery, is gonna cost. Sheesh.

 

[green1]

She couldn't care less. I hope every single person getting this call is telling her something similar. This is highway robbery on the part of Tesla. I hope every customer says NO WAY. I can only imagine what a 95kWh battery, let alone a 100kWh battery, is gonna cost. Sheesh.

It seems apparent that tesla also hopes everyone on the list says no, that's the only reasonable explanation for their pricing strategy.

To be fair Elon did say that it would be available, he also said it wouldn't be a good idea. Their policies have ensured he is correct.

 

[AmpedRealtor]

What's even more ridiculous is the $2,500 credit for the existing battery "core". I would have thought the credit for an existing battery would be closer to $10,000.

 

[MsElectric]

Tesla called me today since I was on the interest list for the battery. They quoted me $22,500 minus $2,500 credit for my current battery "core", so $20,000 plus 1.75 hours of labor. This call came from Fremont, not my local service center. I see this is different than what other people were told. It's possible I misunderstood. Either way, though, it's to rich for my blood!

Is that for a 90KWh battery? So can you pay $22,500 for the 90KWh and then opt to not do the $2,500 credit for your existing battery and basically keep your existing battery?

 

[Stoneymonster]

Is that for a 90KWh battery? So can you pay $22,500 for the 90KWh and then opt to not do the $2,500 credit for your existing battery and basically keep your existing battery?

I think someone said the core trade was required by the deal. I think this is a uniquely Tesla way to get out of something they don't want to do without outright reneging.

 

[MsElectric]

"Well, that's a showstopper right there. That costs more than half what I suspect my car is now worth. Why would anyone in their right mind pay that much just to get 5kWh more on their battery?"

"Perhaps this is a clever strategy on Elon's part to get us all to buy new 90D cars. Well. So much for upgrading my existing battery. Not gonna happen, I'm afraid."

They obviously don't want people to do this based on the pricing they are offering. However Elon specifically said it would not make sense to do the battery upgrade unless you do it perhaps every 3 years so you get a bigger bump in capacity. Also keep in mind battery costs are going down. So each year the cost to upgrade should be less and you will get more battery capacity too. As Elon suggested, I think in 3 years they will have a compelling offer that makes sense. The only part of this i find surprising is that they are only offering $2,500 for your existing pack as I would have thought it is worth at least $7-10K -- especially considering how they charge $3,000 to bump capacity from 85 - 95 and that is just for the cells...

The bottom line is they have come up with a price so high that you would need to be borderline out of your mind to pay that. In most cases you are likely better off selling your car and buying a brand new P90D.

 

[FlasherZ]

So, two questions:

1. Put the core value aside... Does $22,500 seem reasonable for a 90 kWh battery pack? My gut says "yes".

2. If you say "yes" to #1, then let's look at what's being offered for the core - what is a fair value for the "core"? Please explain in terms of what Tesla can do with the cores, and consider the labor of disassembling, testing, refurbishing, and repackaging the battery modules, along with warranty implications. In general, products cannot be sold as new if they contain refurbished components. My gut tells me Tesla doesn't have many options available without sacrificing somewhere else (or cannibalizing their new sales).

 

[jerry33]

So, two questions:

1. Put the core value aside... Does $22,500 seem reasonable for a 90 kWh battery pack? My gut says "yes".

2. If you say "yes" to #1, then let's look at what's being offered for the core - what is a fair value for the "core"? Please explain in terms of what Tesla can do with the cores, and consider the labor of disassembling, testing, refurbishing, and repackaging the battery modules, along with warranty implications. In general, products cannot be sold as new if they contain refurbished components. My gut tells me Tesla doesn't have many options available without sacrificing somewhere else (or cannibalizing their new sales).

Right now there are not enough used cores to do anything with other than refurbishing like you say. However, later on I can see a line of low priced Powerwalls for backup using the Tesla packs. I believe Elon said this at one point, though I added the "low priced" part.

 

[gaswalla]

My issue is that Tesla's advantage long term is based on being a battery-tech company and not really a car company. In this case they are acting like an old school car company,.... Yes, I do think it is fair to expect them to repurpse the battery in some manner that increases it's salvage value. Otherwise, there is no difference between them and Nissan and BMW

 

[green1]

I think the real kicker here is that market value of the old pack seems to be above what tesla is offering, but tesla won't let you keep the old one. If they really have no use for it, they shouldn't force you to sell it back to them.

 

[Andyw2100]

2. If you say "yes" to #1, then let's look at what's being offered for the core - what is a fair value for the "core"? Please explain in terms of what Tesla can do with the cores, and consider the labor of disassembling, testing, refurbishing, and repackaging the battery modules, along with warranty implications. In general, products cannot be sold as new if they contain refurbished components. My gut tells me Tesla doesn't have many options available without sacrificing somewhere else (or cannibalizing their new sales).

I actually kind of answered this upthread, though the issue of whether or not it would be allowed is still a question mark:

Interesting concept, and interesting point.

Assuming there is a law preventing Tesla from selling a used part in a new car, as I expect there may be, I wonder if they'd be allowed to offer the following, if they had an excess of 85s, (or whatever the battery being turned it at the time happens to be. )

A customer purchases a new 70, but is given an option to accept a used 85, --NOT SOFTWARE LIMITED TO 70-- at no extra charge.

Assuming Tesla would be allowed to do that, it winds up being a great use for the turned in batteries, as Tesla then manages to get excellent value back on them. The only "cost" is any incremental revenue not received from a customer who would have spent the extra money to get an 85, but gets the upgrade "for free" this way. One way Tesla could minimize that would be to not offer the option to everyone. So the only way to be certain you'd get an 85 would be to buy an 85. If you ordered a 70, a couple of weeks before delivery you may or may not get a call, asking you if you want a free upgrade to a used 85.

There may be legal issues with this, but if those could be dealt with, I think a program like this could actually make sense for Tesla. It might allow them to charge less for battery upgrades when the used packs are turned in, which could in turn help increase demand for the cars if people see a more reasonable way to be able to upgrade the packs to larger packs down the road.

After I posted this Matias suggested another option would be to offer buyers of the 70s the used 85s, software limited to 70, but guaranteed not to degrade, since adjustments could be made via software to keep them providing the equivalent of a band new 70.

Or they could limit that 85kWh to 70 and give guarantee, that it says at 70. When battery suffers degradation, they just tune the software so that it stays at 70. I would rather buy that than new 70 kWhs pack.

 

[MsElectric]

2. If you say "yes" to #1, then let's look at what's being offered for the core - what is a fair value for the "core"? Please explain in terms of what Tesla can do with the cores, and consider the labor of disassembling, testing, refurbishing, and repackaging the battery modules, along with warranty implications. In general, products cannot be sold as new if they contain refurbished components. My gut tells me Tesla doesn't have many options available without sacrificing somewhere else (or cannibalizing their new sales).

That one is easy to answer. I bet with very minimal refurbishing returned cores will be repurposed for stationary energy storage. Given that they are selling a 10 KWh power wall for $3,500 an 85 KWh battery pack used for a couple of years in a Model S likely still has at least a good 50 KWh of usage in it so it is easily worth about $15K in a stationary energy situation.

I have a feeling that stationary energy storage is where slightly used automotive battery packs will go to retire So when Tesla starts implementing a battery upgrade program that makes any financial sense (present one clearly does not), they will end up with a nice supply of batteries that they can repurpose and reuse for their stationary energy products at a very low cost. Brilliant plan actually.

 

[EarlyAdopter]

$22.5k is a bit much, agreed.

However, if those new 90kWh packs have the new inconel contactors and smart fuses and that price included the "Ludicrous Mode" upgrade for existing P85D's, I _might_ almost spring for that.

 

[FlasherZ]

I actually kind of answered this upthread, though the issue of whether or not it would be allowed is still a question mark:

After I posted this Matias suggested another option would be to offer buyers of the 70s the used 85s, software limited to 70, but guaranteed not to degrade, since adjustments could be made via software to keep them providing the equivalent of a band new 70.

They would have to create a new product built around refurb'ed parts as they can't sell it new. Then they also have to deal with an additional separate inventory, service and warranty issues, and other assorted goodies. Perhaps they might find it worthwhile, but it seems like it would cannibalize some 85 sales to do that with 70's. It's probably better for them to encourage others to sell the existing car, rather than do some kind of "used product gymnastics".

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That one is easy to answer. I bet with very minimal refurbishing returned cores will be repurposed for stationary energy storage. Given that they are selling a 10 KWh power wall for $3,500 an 85 KWh battery pack used for a couple of years in a Model S likely still has at least a good 50 KWh of usage in it so it is easily worth about $15K in a stationary energy situation.

It's not like they can lop off the "good" 50 kWh portion of the battery and use it for the Powerwall. The Powerwall uses less modules than the Model S, and as such it's going to see a proportional reduction, unless Tesla purposely redesigns the product to use battery modules whose cells hold only 70% of their design capacity, etc.

There's no doubt that we'll find something to do with used packs, but I am unsure Tesla has the time or energy to create a new refurb product set with used packs right now.

- - - Updated - - -

I think the real kicker here is that market value of the old pack seems to be above what tesla is offering, but tesla won't let you keep the old one. If they really have no use for it, they shouldn't force you to sell it back to them.

This I agree with - if you want to keep the old pack, they should allow you to.

 

[AmpedRealtor]

They would have to create a new product built around refurb'ed parts as they can't sell it new. Then they also have to deal with an additional separate inventory, service and warranty issues, and other assorted goodies. Perhaps they might find it worthwhile, but it seems like it would cannibalize some 85 sales to do that with 70's. It's probably better for them to encourage others to sell the existing car, rather than do some kind of "used product gymnastics".

Do we know for sure that Tesla cannot internally recycle and reuse our battery cores to be included in another product sold as "new"? I'm sure all of our cars contain some amount of recycled material, including the aluminum from which most of the car is made, and our cars are sold as new. If an older battery cell meets the same specifications as a new cell, or if an old cell is remade into essentially a new cell through a recycling process, what does it matter?

 

[Drucifer]

I bought an 85 because I wanted an 85....that would over time become an 84,83,82,81...

When the 85 I have becomes a 70, and I can upgrade to 120 or more at a reasonable price.....well, by then it will be 2030, and I will have probably replaced the car at least twice, and be driving my P225D with a 650 mile range.

 

[stopcrazypp]

Do we know for sure that Tesla cannot internally recycle and reuse our battery cores to be included in another product sold as "new"? I'm sure all of our cars contain some amount of recycled material, including the aluminum from which most of the car is made, and our cars are sold as new. If an older battery cell meets the same specifications as a new cell, or if an old cell is remade into essentially a new cell through a recycling process, what does it matter?

Recycling and reuse is different though. In recycling the items are processed into raw material and remade before being sold as new. In this case, you are reusing used components and is much closer to a refurbished item.

 

[Rifleman]

I suppose if someone has a 40 kWh Model S, and the 20k price would bring it up to a 90, then it *might* be worthwhile, but otherwise, I think it is pretty obvious the intent is to not sell a single upgrade. You would probably end up ahead selling you car for fair market value, and then buying a new 90 kWh Model S rather than upgrading (probably their intent)