Powerpack pricing

[ItsNotAboutTheMoney]

InsideEVs posted some pricing information for Powerpack.

Tesla Energy Reveals Powerpack Pricing, Starting From 200 kWh Of Storage

Nowhere near the original stated $250/kWh for the Powerpacks. Maybe had to switch to more expensive cells because of the cycling. I don't see how Tesla Energy is going to be competitive at those prices. Shares could take a hit on Monday.

Glad Tesla got those Model 3 reservations.

 

[Johan]

I don't see how Tesla Energy is going to be competitive at those prices.

Who is offering better pricing than $470/kWh?

Did you consider that maybe they haven't had increased costs at all, but they just decided to increase sales price (i.e. increase margins) after having done market research and found that they could price it this high and there would still be enough demand?

 

[quartzav]

If that is the consideration then that will slow down my adoption of gird storage as a home solar owner. I was planning to use what Tesla was hinting around $250/kwh (even $290 is acceptable...) to absorb most of my production and use it as a leverage against NV energy's push back on home solar adoption...
Very disappointed with Tesla's strategy should it plans to price high because of the demand...

 

[brucet999]

If that is the consideration then that will slow down my adoption of gird storage as a home solar owner. I was planning to use what Tesla was hinting around $250/kwh (even $290 is acceptable...) to absorb most of my production and use it as a leverage against NV energy's push back on home solar adoption...
Very disappointed with Tesla's strategy should it plans to price high because of the demand...

Why are you disappointed? Tesla's first electric car was a rich man's toy aimed at wealthy first adopters. The Model S was much larger, more capable and less costly but still a premium priced car. Almost all new products are priced as high as possible to recover development costs and only later, as demand softens, economies of scale emerge and/or competition arises, are prices lowered.

 

[Johan]

Why are you disappointed? Tesla's first electric car was a rich man's toy aimed at wealthy first adopters. The Model S was much larger, more capable and less costly but still a premium priced car. Almost all new products are priced as high as possible to recover development costs and only later, as demand softens, economies of scale emerge and/or competition arises, are prices lowered.

Clever. But you're forgetting something that Elon has understood: by not being like this but trying to very quickly get to the mainstream, by pushing development faster than if they wanted to stay in the "high price sweet zone" as long as possible, so as to grow the company at a relentless pace and rather financing current development by borrowing against future valuation (selling debt). This works as long as you keep developing and developing in the right direction.

 

[SageBrush]

Why are you disappointed? Tesla's first electric car was a rich man's toy aimed at wealthy first adopters. The Model S was much larger, more capable and less costly but still a premium priced car. Almost all new products are priced as high as possible to recover development costs and only later, as demand softens, economies of scale emerge and/or competition arises, are prices lowered.

Clever. But you're forgetting something that Elon has understood: by not being like this but trying to very quickly get to the mainstream, by pushing development faster than if they wanted to stay in the "high price sweet zone" as long as possible, so as to grow the company at a relentless pace and rather financing current development by borrowing against future valuation (selling debt). This works as long as you keep developing and developing in the right direction.

I imagine both of these approaches are true and we will see a fairly rapid transition from designer to volume as GF1 ramps up production.

It also seems fair to point out that today's industrial customers are paying for power stability and quality more so than storage.

 

[brucet999]

Clever. But you're forgetting something that Elon has understood: by not being like this but trying to very quickly get to the mainstream, by pushing development faster than if they wanted to stay in the "high price sweet zone" as long as possible, so as to grow the company at a relentless pace and rather financing current development by borrowing against future valuation (selling debt). This works as long as you keep developing and developing in the right direction.

You are talking about long-term strategy, but in the short term Elon's pattern has been to recover development cost with high priced products at first (Roadster, MS, MX) to enable lower price product (Model 3) to piggy back on the technology later. To spend development money up front and price the first products low might expand the market faster, but leaves you with huge debt but little profit margin to retire it.

 

[Johan]

You are talking about long-term strategy, but in the short term Elon's pattern has been to recover development cost with high priced products at first (Roadster, MS, MX) to enable lower price product (Model 3) to piggy back on the technology later. To spend development money up front and price the first products low might expand the market faster, but leaves you with huge debt but little profit margin to retire it.

I agree with what you're saying, I guess my view is just complementing your view because mine is on a more zoomed out scale: "when looking back on the success of TSLA it will be very clear that Tesla went from the top-down strategy early in it's development, and were just leaving that stage now which means at this point in time (and stock valuation) we're still in the early stages of TSLA growth.

 

[quartzav]

I understood the strategy for the transportation sector and voted with my wallet. But I disagree about applying the same principal with energy storage systems as I believe the original intent was to ensure consumption of gigafactory's production should the demand from transportation sectors be softer than they anticipated. I believe there are sufficient incentives to lower the price for the storage systems and drive other manufacturers' price down. There are no lower trim options (i.e. non-scalable version) in the power pack to make it affordable for home owners, which makes it very different than the well known car strategy to be applied here.

 

[Fallenone]

I think the $250/kWh was the price for their pilot project partners. You help us test out our new product with a lower price. Now they see demand is there and more than they can produce, so they quote a higher price (but still lower than others) to maximize profit. As a shareholder I love how they did this. Provides extra $ for pushing out Model 3.

 

[Johan]

I think the $250/kWh was the price for their pilot project partners. You help us test out our new product with a lower price. Now they see demand is there and more than they can produce, so they quote a higher price (but still lower than others) to maximize profit. As a shareholder I love how they did this. Provides extra $ for pushing out Model 3.

Exactly what I've been saying. Those were proof of concept projects where the especially (abnormally) low pricing helped in catalysing them coming to fuitition. Sort of like breaking the ice. The way a dealer gives a good price on weed at first and then when you've become heavily addicted to weed he jacks up prices to market pricing: i.e. the price the market is willing to pay. I'm not saying the market will become addicted to storage and therefore be willing to pay higher prices (the way a drug addict will put a higher value on the drug than before he was addicted) but I am saying that it's worth losing out on some margin early on in order to open up the eyes of 99% of your potential huge future consumer base.

 

[quartzav]

It looks like most of you think solar growth is a given and the demand would only be going up exponentially. Perhaps it takes this strategy of losing the fight to win the war. We all agree that gigafactory's success is needed in order for model 3 to succeed. But after witnessing regular Nevadans' losing fight against a utility monopoly that practically destroyed residential solar industry over last few months, I am very aware of the likelihood of sudden policy shifts on significant delaying of home solar adoption. The ground game at Nevada is actually applicable at other states and it won't take that much to turn a relatively financially unfavorable propositon now into financial suicide in the future. Clearly the Tesla's gigafactory focus has shifted their confidence back to supplying model 3 seeing the demand. 30% profit margin is OK for me to swallow but not at 250%- I am also vested in TSLA but I am disappointed that I can't personally support the implementation of grid storage for a few more years with this pricing.

 

[Fallenone]

It looks like most of you think solar growth is a given and the demand would only be going up exponentially. Perhaps it takes this strategy of losing the fight to win the war. We all agree that gigafactory's success is needed in order for model 3 to succeed. But after witnessing regular Nevadans' losing fight against a utility monopoly that practically destroyed residential solar industry over last few months, I am very aware of the likelihood of sudden policy shifts on significant delaying of home solar adoption. The ground game at Nevada is actually applicable at other states and it won't take that much to turn a relatively financially unfavorable propositon now into financial suicide in the future. Clearly the Tesla's gigafactory focus has shifted their confidence back to supplying model 3 seeing the demand. 30% profit margin is OK for me to swallow but not at 250%- I am also vested in TSLA but I am disappointed that I can't personally support the implementation of grid storage for a few more years with this pricing.

I don't think solar/wind is the targeted market for Powerpack, at least not now. The purpose for these business level storage batteries are more for lowering the cost of electricity bill. I have a friend who runs a cluster of servers and paying a ton for electricity he's pretty excited about this and certain it would be great cost reduction for other businesses, small or large.

 

[mspohr]

InsideEVs posted some pricing information for Powerpack.

Tesla Energy Reveals Powerpack Pricing, Starting From 200 kWh Of Storage

Nowhere near the original stated $250/kWh for the Powerpacks. Maybe had to switch to more expensive cells because of the cycling. I don't see how Tesla Energy is going to be competitive at those prices. Shares could take a hit on Monday.

Glad Tesla got those Model 3 reservations.

These are the industrial PowerPacks, not the home PowerWalls.

 

[quartzav]

It's been repeatedly debated. Even at my modest outout of over 10 MWh from 6.2 kWp system over last year, I could potentially pay less eletricity bill even with anticipated netmetering change. Never mind the bill, my goal is to power most my energy consumption via self-sufficient means. Being given an option to guard against utility compnay's monopoly is also a bonus. The fact remains it has home utility against prolonged overcast days and/or off grid applications in my opinion.

 

[mspohr]

It's been repeatedly debated. The fact remains it has home utility against prolonged overcast days and/or off grid applications in my opinion.

No doubt that some people might make good use of the PowerPacks at home but the original pricing which was announced was for the home PowerWalls. I think this is the first time we have seen PowerPack pricing.

 

[quartzav]

No doubt that some people might make good use of the PowerPacks at home but the original pricing which was announced was for the home PowerWalls. I think this is the first time we have seen PowerPack pricing.

Yes, it is my first time seeing the pricing as well. Thus my disappointment via extrapolation as stated above.

 

[Johan]

No doubt that some people might make good use of the PowerPacks at home but the original pricing which was announced was for the home PowerWalls. I think this is the first time we have seen PowerPack pricing.

Yes it's correct this is the first time we see PowerPack pricing on the order page. HOWEVER, I clearly remember Elon tweeting something like "the kicker is $250/kWh utility pricing" or something. In this case utility means PowerPack. I'll go find the tweet.

Edit:

 

[MitchJi]

InsideEVs posted some pricing information for Powerpack.

Tesla Energy Reveals Powerpack Pricing, Starting From 200 kWh Of Storage

Nowhere near the original stated $250/kWh for the Powerpacks. Maybe had to switch to more expensive cells because of the cycling. I don't see how Tesla Energy is going to be competitive at those prices. Shares could take a hit on Monday.

Glad Tesla got those Model 3 reservations.

Definitely not because they had to switch cell types.

The home product Powerwall product pricing hasn't changed. $3,000 for 7 kWh or $428 per kWh.

I understood the strategy for the transportation sector and voted with my wallet. But I disagree about applying the same principal with energy storage systems as I believe the original intent was to ensure consumption of gigafactory's production should the demand from transportation sectors be softer than they anticipated.

So you believe that they launched a multi-billion dollar business with "off the hook demand" as a hedge.

How is their intent relevant?

It looks like most of you think solar growth is a given and the demand would only be going up exponentially. Perhaps it takes this strategy of losing the fight to win the war. We all agree that gigafactory's success is needed in order for model 3 to succeed. But after witnessing regular Nevadans' losing fight against a utility monopoly that practically destroyed residential solar industry over last few months, I am very aware of the likelihood of sudden policy shifts on significant delaying of home solar adoption. The ground game at Nevada is actually applicable at other states and it won't take that much to turn a relatively financially unfavorable propositon now into financial suicide in the future. Clearly the Tesla's gigafactory focus has shifted their confidence back to supplying model 3 seeing the demand. 30% profit margin is OK for me to swallow but not at 250%- I am also vested in TSLA but I am disappointed that I can't personally support the implementation of grid storage for a few more years with this pricing.

Powerwall prices didn't change.

How many homeowners were planning to buy a 100 kWh Powerpacks? Were you.

It's clearly more likely that their confidence in TE demand has given them the confidence to raise their prices.

 

[quartzav]

The home product Powerwall product pricing hasn't changed. $3,000 for 7 kWh or $428 per kWh.

How is their intent irrelevant?

How many homeowners were planning to buy a 100 kWh Powerpacks? Were you.

Powerwall prices didn't change.

How many homeowners were planning to buy a 100 kWh Powerpacks? Were you.

It's clearly more likely that their confidence in TE demand has given them the confidence to raise their prices.

1. I did plan to buy a power pack since you asked.
2. My extrapolation form Elon's tweet is obviously a mistake.
3. From my calculation although $250/kWh per power pack is still financially unsound but it's doable with enough convictions from a sane individual. There is a reason why buying 10 power wall units are not a good idea to start with.

But that is just my opinion. You obviously have a strong sense of holding onto your opinion. No need to be testy