Poll on battery size.

[Lloyd]

I'm leaning toward leasing as well. I think that since the EV technology is developing so quickly, there may be a good argument for upgrading after just 3 or 4 years. More like you do with a computer than with a ICE car. Its not just the battery either. What if the first version of the Model S only has 3G, but the Model S 2.5 gets 4G? What if they come out with a Model S Sport?
:

I disagree with this. I used to run a lease company! If a sport come out in two years, and you have a 4 year lease. It will likely cost you for early termination to change to the new car. Most lease companies will 'bury' the cost of the early termination in the new lease, but you still pay for it. Also, if you hold your vehicle to the end of the lease and it is an open ended lease, you may be liable for any deficit to the value of the car at the end of the lease. Thus if technology increases quickly, the vehicle being turned in may not be worth as much as they had anticiped at inception of the lease. Close ended leases cannot charge you extra if the mileage and condition of the car are within normal wear and tear. Owning the car gives you better freedom to sell you current car, and trade up to another model when the time is right for the sale of the old model, and when you want to trade up. Additionally the total cost of financing is lower for a purchase as well in most cases.

 

[Doug_G]

I think it is extremely unlikely that Tesla will simply throw out old packs and sell us new ones.

They will extract the worn-out cells and sell them to a recycler, who will extract the Lithium. The rest of the pack - structure, plumbing, electronics - will be refurbished as needed and largely reused. This not only makes sense for Tesla and for the environment, but refurbished packs will be less expensive for the customer.

I'm sure they'll offer brand-new packs at a higher price as well, so the consumer can choose either a refurb or a brand-new pack.

 

[Larry Chanin]

I disagree with this. I used to run a lease company! If a sport come out in two years, and you have a 4 year lease. It will likely cost you for early termination to change to the new car. Most lease companies will 'bury' the cost of the early termination in the new lease, but you still pay for it. Also, if you hold your vehicle to the end of the lease and it is an open ended lease, you may be liable for any deficit to the value of the car at the end of the lease. Thus if technology increases quickly, the vehicle being turned in may not be worth as much as they had anticiped at inception of the lease. Close ended leases cannot charge you extra if the mileage and condition of the car are within normal wear and tear. Owning the car gives you better freedom to sell you current car, and trade up to another model when the time is right for the sale of the old model, and when you want to trade up. Additionally the total cost of financing is lower for a purchase as well in most cases.

Hi Lloyd,

Thanks for your insights.

So is there ever a situation where leasing has advantages?

Larry

 

[ckessel]

I think it is extremely unlikely that Tesla will simply throw out old packs and sell us new ones.

Definitely. From the viewpoint of a customer upgrading, apart from warm fuzzy feelings of reuse and environmentalism, it's just part of whatever used market there will be. I'm really curious what the used and refurbished market will look like. That'll have a pretty big impact on how people trade in batteries at some point.

In the near future though, it's sort of a non-factor as it'll be years before that market matures, probably too late and too unpredictably to consider it in any sort of "ugprade now or later?" calculations.

 

[Trnsl8r]

For me, two reasons to go max out to 300:
1. Better to have it and not need it. If this is to replace my current family car, I need the distance - not for the daily drive, but for the once a month trip out to the coast or when we have visitors that want to see the sights. (You guessed it, I'm in Tesla's home neighborhood.)

2. Resale value. Not that I'm planning on selling it, but I have a suspicion that the 160 mile model will be like the 4GB model of the first iPhone. Eventually it got dropped because nobody wanted it...

It's all about the range... at least until there is a charging infrastructure in place, and that'll be a while yet.

 

[NigelM]

For me, two reasons to go max out to 300:
1. Better to have it and not need it. If this is to replace my current family car, I need the distance - not for the daily drive, but for the once a month trip out to the coast or when we have visitors that want to see the sights. (You guessed it, I'm in Tesla's home neighborhood.)

2. Resale value. Not that I'm planning on selling it, but I have a suspicion that the 160 mile model will be like the 4GB model of the first iPhone. Eventually it got dropped because nobody wanted it...

It's all about the range... at least until there is a charging infrastructure in place, and that'll be a while yet.

3. "Size anxiety" when talking to ICE owners. :wink:

 

[W.Petefish]

3. "Size anxiety" when talking to ICE owners. :wink:

I guess we'll see at the factory tour. 27 days and counting.

 

[Larry Chanin]

I hear a lot of talk about battery costs (in general) coming down, followed by the assumption that replacement battery packs being sold by Tesla will drop in price by an equal amount. Wow, that's a *huge* leap of faith. They are the single-source for the part, and you are completely at their mercy. Why in the world would they even *dream* of lowering the price?

Hi William,

I don't think if a competing battery technology is less expensive to produce than Tesla's that Tesla's replacement battery packs will drop by an equal amount. However, I do believe, as Tesla management does, that the general cost of batteries is trending downward. I also believe that the new Panasonic batteries that Tesla will eventually be using will be less expensive to produce than the current Tesla battery packs. Will Tesla pass some or all of these economies on to their customers? Sure. Why, because there is real competition developing in the EV and Hybrid arena. So if Tesla expects to remain a viable player, especially as they roll out lower priced, higher volume EVs, they will have to pass along some of those reduced production costs. Even in the luxury EV niche market the model S won't remain the only player for very long.

Larry

 

[vfx]

While I don't expect batteries to be half price (though I'm hoping). I do think that all eyes are on Tesla so if they get too crazy with pricing it will play poorly for the EV movement.

 

[NigelM]

"We will not stop until every car on the road is electric." - Elon Musk

If Tesla lives their guiding principles, it wouldn't make any sense to keep battery prices artificially high.

 

[bonnie]

I think Larry and Nigel both misunderstand me. I agree that Tesla will price their *new* vehicles according to battery cost and competition. But, the *replacement* packs that the customer needs about 5 years down the road, those are the ones that I'm talking about. I predict that 99% of the people on this forum are going to be shocked when they find out how much Tesla will be charging for those. I think they will cost about *twice* as much as people on this forum are expecting.

Perhaps. But they will also factor in how that might impact future sales. Price will be dependent upon a number of factors such as actual cost and what other car manufacturers are charging (which helps set expectations). If the price significantly exceeds expectations, it will negatively impact future sales.

 

[Larry Chanin]

I think Larry and Nigel both misunderstand me. I agree that Tesla will price their *new* vehicles according to battery cost and competition. But, the *replacement* packs that the customer needs about 5 years down the road, those are the ones that I'm talking about. I predict that 99% of the people on this forum are going to be shocked when they find out how much Tesla will be charging for those. I think they will cost about *twice* as much as people on this forum are expecting.

Hi William,

Thanks for the clarification, but here is what you posted:

I hear a lot of talk about battery costs (in general) coming down, followed by the assumption that replacement battery packs being sold by Tesla will drop in price by an equal amount. Wow, that's a *huge* leap of faith. They are the single-source for the part, and you are completely at their mercy. Why in the world would they even *dream* of lowering the price?

I agree that in 5 years battery pack replacements will still be expensive. However, the thrust of your remarks was that Tesla would not pass along savings due to economies of scale and technology improvements because they are the exclusive supplier of their battery packs. Is that still your key point as to why the replacement packs will be expensive in the future?

Thanks.

Larry

 

[dsm363]

I think Larry and Nigel both misunderstand me. I agree that Tesla will price their *new* vehicles according to battery cost and competition. But, the *replacement* packs that the customer needs about 5 years down the road, those are the ones that I'm talking about. I predict that 99% of the people on this forum are going to be shocked when they find out how much Tesla will be charging for those. I think they will cost about *twice* as much as people on this forum are expecting.

You may be right but they also can't price it too high otherwise angering current owners might drive away future owners. They have to find the right balance between maximizing profit and attracting new customers.

Oh, just saw I posted the exact same thing as Bonnie. So I guess..I agree with Bonnie.

 

[Larry Chanin]

Perhaps. But they will also factor in how that might impact future sales. Price will be dependent upon a number of factors such as actual cost and what other car manufacturers are charging (which helps set expectations). If the price significantly exceeds expectations, it will negatively impact future sales.

Hi Bonnie,

I completely agree.

Folks make purchase decisions primarily considering the initial costs, but the cost of ownership also has an influence. When battery pack comprises such a large percentage of the costs of a vehicle their replacement costs will be a significant factor in the buying decisions. If Tesla were to artificially inflate those costs it would materially effect future sales. Repeat buyers would fall by the wayside.

Larry

 

[vfx]

At some point outside battery makers will see the market for sales like printer cartridges. digital media and car batteries. Anything that is 'expendable" will find an outlet.

 

[Doug_G]

I believe that Roadster packs will be more expensive per-kWh than Model S packs, simply because they're hand-built instead of mass-produced. That said, refurbished packs with new cells will be less expensive than all-new packs. So I think the ultimate replacement (refurb) cost will be more than many suggest and less than William3 fears.

 

[vfx]

I believe that Roadster packs will be more expensive per-kWh than Model S packs, simply because they're hand-built instead of mass-produced. ...

Maybe they can reprogram their fancy new battery welding machine to do the old Roadster pack.

 

[kgb]

I realize this thread has veered towards battery pack cost, but allow me to go back to the real vs. ideal miles discussion. I recently did a trip from Houston to Austin. From my house to my destination, 168 miles. One would think that would be a no-brainer for a 244 mile pack... let me tell you about my "real world" experience.

My actual plan was to make a couple stops on my way out of town, and I wanted around 10-20 miles left when I arrived in Austin, so I could take care of some business before I had to charge. I mapped my route, and calculated that with all the stops, I needed 202 miles. That's close, but that was everything from outlet to outlet. I got on my way, and I set the cruise control to 50 mph. It is brutally hot here in Texas, so I decided to drive with the A/C. I closely monitored my estimated range and the remaining distance as per the GPS. It looked like it was going to be brutally close, and I couldn't drive any slower! So, I called an RV park I had in the ready, and stopped in there to charge up. This was my first time taking the Roadster out of town, it was a learning experience.

On the way back, I drove without the A/C on. I was determined to prove that my car could go from Austin to Houston. I found that with the A/C off and the cruise control set to around 60 mph, my estimated miles and ideal miles were around the same. I would have made it back with around 50 miles to spare, but I couldn't take the heat any longer and put the A/C on.

The only cities to which I would consider driving are: Galveston (~60mi), Austin (~165mi), San Antonio (~200mi), and Dallas (~250mi). Unless you want to arrive in a shirt soaked with sweat, you need a battery with enough capacity to run the A/C while driving. Given my experience, I think I'd rather err on the side of having extra battery. So I am pretty convinced that I'll go for the 300 mile variety.

 

[ckessel]

I realize this thread has veered towards battery pack cost, but allow me to go back to the real vs. ideal miles discussion. I recently did a trip from Houston to Austin. From my house to my destination, 168 miles. One would think that would be a no-brainer for a 244 mile pack... let me tell you about my "real world" experience.

Ouch, that is incredibly deflating. Going standard freeway speed (actually, quite less) with the A/C and you're looking at maybe 70% of actual range? I think I just gained range anxiety.

 

[Todd Burch]

It looks like kgb said the route he was taking was 202 miles...so more like 83% of actual range.