[Rant] locals clogging the Highland Park, IL supercharger

[kort677]

What if they just implement a paid model when charging within a certain range of "home"? Could this be a good compromise? It means special case really-actually-need-it folks can still charge, regular trip takers still get free charging, and locals are discouraged from local charging. I would fully support this model.

what part of unlimited usage does your plan address?

 

[Skotty]

what part of unlimited usage does your plan address?

Well, it doesn't limit usage. It just adds a cost factor for charging close to home. Seems completely reasonable to me. Not the best deal for Tesla though, as it would mean developing a full billing system that would not see much use overall.

 

[kort677]

Well, it doesn't limit usage. It just adds a cost factor for charging close to home. Seems completely reasonable to me. Not the best deal for Tesla though, as it would mean developing a full billing system that would not see much use overall.

it's not reasonable because it would be a breach of the agreement between the car owners and tesla.

 

[Skotty]

it's not reasonable because it would be a breach of the agreement between the car owners and tesla.

That's fine. Just grandfather in existing cars, and create a new policy for future cars. Plenty of companies use this approach when they want to change policy without affecting existing agreements or promises.

 

[Az_Rael]

Is there a Supercharger use agreement that spells out unlimited use? Not a current owner, so just curious what the current terms are in the contract when you buy the car.

 

[ohmman]

Is there a Supercharger use agreement that spells out unlimited use? Not a current owner, so just curious what the current terms are in the contract when you buy the car.

There is nothing in the Purchase Agreement that discusses Supercharger use. Nor in the Terms and Conditions or Order Agreement. I think the only agreement between the customer and Tesla is what was advertised at the time of purchase. In all cases, that was free Supercharging for long distance travel. They've been clear since the start on that point.

 

[bhzmark]

No they're not. Please stop spreading this misinformation which a brief search will show you is incorrect. Superchargers are a marketing expense. The previous option for Model S 60s of $2000 with purchase or $2500 later was for the supercharging hardware and software IN THE CAR.

Then you better call the SEC and tell them that Tesla is "spreading misinformation" in their 10-K.

Sayeth Elon and his accountants and securities lawyers:

"Cost of automotive revenues includes direct parts, material and labor costs, manufacturing overhead, including amortized tooling costs, shipping and logistic costs, vehicle internet connectivity costs, allocations of electricity and infrastructure costs related to our Supercharger network, and reserves for estimated warranty expenses."

see SEC Filings | Tesla Motors

Also, in 2015 they only spent a total of $58 million under their marketing line item. That did not cover the supercharger expense and all other marketing expenses.

In 2015 they sold about 50k cars. at reserving $2k/ for each car for supercharger expense, for those cars, gives them $100 million from those cars to contribute to fund the pro rata supercharger expenses (infrastructure and elec) for those cars during their lifetime.

Supercharger facilities and the electricity that they use is booked as cost of goods sold, allocated to each car, just like warranty reserves. And just like warranty reserves, they might allocate too much or too little. It is not a marketing expense.

Maybe their budgeted cost is $1000/car, maybe it is $2500 per car. The price at which they charge old 60 buyers to enable gives a sense that it is probably in that neighborhood.


Also all the hardware is in all the cars. They enable supercharging by flipping a software switch. The charge is to contribute to the annuity like reserve the fund the supercharger expenses. Anyone who understands what an annuity is, or a warranty reserve as cost of goods, can understand this simple concept.

 

[ThosEM]

Unnecessary. Just charge a nominal fee for activation, then charge by the kWh. The car knows when it's charging, it's a couple web developers away from being a reality. I'd be more than happy to pay for supercharging, as long as the superchargers were actually available where and when I need them.

Why is this not obvious to us all?

 

[TexasEV]

Then you better call the SEC and tell them that Tesla is "spreading misinformation" in their 10-K.

Sayeth Elon and his accountants and securities lawyers:

"Cost of automotive revenues includes direct parts, material and labor costs, manufacturing overhead, including amortized tooling costs, shipping and logistic costs, vehicle internet connectivity costs, allocations of electricity and infrastructure costs related to our Supercharger network, and reserves for estimated warranty expenses."

see SEC Filings | Tesla Motors

Also, in 2015 they only spent a total of $58 million under their marketing line item. That did not cover the supercharger expense and all other marketing expenses.

In 2015 they sold about 50k cars. at reserving $2k/ for each car for supercharger expense, for those cars, gives them $100 million from those cars to contribute to fund the pro rata supercharger expenses (infrastructure and elec) for those cars during their lifetime.

Supercharger facilities and the electricity that they use is booked as cost of goods sold, allocated to each car, just like warranty reserves. And just like warranty reserves, they might allocate too much or too little. It is not a marketing expense.

Maybe their budgeted cost is $1000/car, maybe it is $2500 per car. The price at which they charge old 60 buyers to enable gives a sense that it is probably in that neighborhood.


Also all the hardware is in all the cars. They enable supercharging by flipping a software switch. The charge is to contribute to the annuity like reserve the fund the supercharger expenses. Anyone who understands what an annuity is, or a warranty reserve as cost of goods, can understand this simple concept.

When supercharging was announced Elon explained the $2000 option for 60s as $1000 for the hardware and $1000 for the software in the car. Later Tesla announced that all 60s were built with the supercharging equipment and it could be activated later for the $2500 charge. That doesn't change what the charge was intended to cover.

At TMC Connect 2014 Steve Jurvetson, a Tesla board member, described the marketing purpose of the supercharger network and said Tesla would continue building it as long as that was a better use of funds than other forms of marketing. The video of his talk is probably on this site somewhere.

 

[AZ Desert Driver]

In most state's it's illegal to bill by the kWh.

I did not know that billing for kWh was illegal. I have a meter at my house and they bill me for kWh every month.
I know that a tank full of juice is not expensive, so some outfits choose to not bill for the pittance and instead get the business for the traveler. But ILLEGAL? Is that True??

 

[Az_Rael]

I did not know that billing for kWh was illegal. I have a meter at my house and they bill me for kWh every month.
I know that a tank full of juice is not expensive, so some outfits choose to not bill for the pittance and instead get the business for the traveler. But ILLEGAL? Is that True??

In most states you have to be a "utility" to bill by the kWh by law. Laws that were written well before EVs were on the scene I am sure. Some states have updated their laws to allow kWh charging, but others that haven't seen a lot of EVs haven't bothered.

Blink lists the states that do and don't allow it here under their pricing schedule:
Blink - Membership FAQs

 

[AZ Desert Driver]

In most states you have to be a "utility" to bill by the kWh by law. Laws that were written well before EVs were on the scene I am sure. Some states have updated their laws to allow kWh charging, but others that haven't seen a lot of EVs haven't bothered.

Blink lists the states that do and don't allow it here under their pricing schedule:
Blink - Membership FAQs

Does this mean a solar array with excess capacity becomes a regulated utility? Whole new world for me..please educate me.

 

[bhzmark]

When supercharging was announced Elon explained the $2000 option for 60s as $1000 for the hardware and $1000 for the software in the car. Later Tesla announced that all 60s were built with the supercharging equipment and it could be activated later for the $2500 charge. That doesn't change what the charge was intended to cover.

At TMC Connect 2014 Steve Jurvetson, a Tesla board member, described the marketing purpose of the supercharger network and said Tesla would continue building it as long as that was a better use of funds than other forms of marketing. The video of his talk is probably on this site somewhere.

And even if what someone orally stated in 2012 and 2014 (as opposed to what they said in writing in their 2016 10-k) is true, nothing interesting follows from that.

Having Tesla logos plastered on SCs is nice marketing; i suppose. That's not why they do it, or how they budget for it or how they expense it.

They build the SC funding (infrastructure and elec) into the cost of each car so that each car's revenue is partly allocated to fund that car's pro rata portion of its contribution to SC capex and SC elec lifetime use. (Just like warranty reserve) If they get the projected usage and the math right in the aggregate then they never have to bother us with metering the elec usage. That is the point.

A different point is that since there is no marginal cost for refueling at local SCs, locals will displace travelers who have a more urgent need for using the SCs. Metering would be useful to prevent abuse of, but isn't necessary to fund, the SCs.

 

[TexasEV]

Having Tesla logos plastered on SCs is nice marketing; i suppose. That's not why they do it, or how they budget for it or how they expense it.

Marketing is exactly why Tesla builds the superchargers, and it has nothing to do with logos. The ability to drive conveniently beyond the range of the car sells cars. It's about overcoming objections. Jurvetson said the supercharger network answers the question "how would I get to X?" even if the person hasn't driven to X in decades and has no intention of driving to X.

 

[jgs]

A different point is that since there is no marginal cost for refueling at local SCs, locals will displace travelers who have a more urgent need for using the SCs.

This is only true of people who value their time at somewhat less than minimum wage. Unfortunately there do seem to be a surprising number of Tesla owners who fit that description.

People with no home charging (e. g. apartment dwellers) are a different story since they wouldn't be dissuaded by a marginal cost.

 

[Off_Oil]

I've always thought that unlimited "free" Supercharger access while great marketing is unsustainable. The same abuse issues occur with free L2 stations, however these don't cost nearly as much as a Supercharger. With the Model 3 coming out I think this needs to shift to a one time access fee plus a pay as you go model. Where it is legal, I would charge for kWh usage plus a high hourly fee once charging is complete to discourage camping. Where you can't charge by kWh, I would use a two tier rate based on the length of time. It's simple programming for connected chargers, and is already available for example on the ChargePoint network. In both cases the fee should be higher than it would cost to charge at home.

 

[nwdiver]

With the Model 3 coming out I think this needs to shift to a one time access fee plus a pay as you go model.

OR... simply block access to superchargers within ~X miles of your home...

 

[stopcrazypp]

Then you better call the SEC and tell them that Tesla is "spreading misinformation" in their 10-K.

Tesla actually had to explain the supercharger accounting to SEC in early 2015.

Ongoing expenses like electricity, depreciation, lease, maintenance related to the supercharger network are counted as deferred revenue (this was the calculated $500 per vehicle from previous SEC filings).

Our best estimate of the value of this deliverable is based on a cost-plus model that includes the estimated cost of energy that will be consumed plus a per-car estimate of forecasted Supercharger network depreciation, lease and maintenance costs expected to be incurred over the estimated eight-year life of the car plus a reasonable margin. We have also considered how we price certain options that include and exclude supercharging capability. Because we offer unlimited connectivity to our Supercharger network, we defer and amortize its related revenue ratably over the estimated life of the car.

About the infrastructure cost model for superchargers, the less popular stations are a marketing expense, the popular stations are cost of sales.

Generally speaking, Superchargers located on more frequently traveled routes with eight or more charging stations were those that we estimated would have a higher utilization rate and are recorded to cost of automotive sales. Supercharger stations expected to have low utilization rates serve more as a marketing function for Tesla and we recorded these costs to selling, general and administrative. As of December 31, 2013, we allocated 40% of our Supercharger network costs to cost of automotive sales and the remaining 60% to selling, general and administrative.

Letter to the SEC

Tesla no longer breaks any of this down in recent SEC filings (no more mention of amount of deferred revenue for superchargers).

 

[bhzmark]

Marketing is exactly why Tesla builds the superchargers, and it has nothing to do with logos. The ability to drive conveniently beyond the range of the car sells cars. It's about overcoming objections. Jurvetson said the supercharger network answers the question "how would I get to X?" even if the person hasn't driven to X in decades and has no intention of driving to X.

In that case putting windshield wipers in the car is marketing because it overcomes an objection.

Semantic debate isn't interesting.

Tesla funds the sc costs from the price of the car. That was the point.

 

[kort677]

Does this mean a solar array with excess capacity becomes a regulated utility? Whole new world for me..please educate me.

this is an example of the laws not keeping pace with new technologies