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Service says $22k for new battery on 2012 Model S

Droschke

Active Member
Mar 8, 2015
2,450
4,334
Future
I'll try to weigh in here, a little late.

There are two factors in play here: Cost accounting and Elon Asperger.

Cost accounting is how companies determine the total costs that go into a finished product. For manufacturing it includes, inter alia, raw materials, labor, supplies, shipping, depreciation on equipment and real property, carrying costs like interest and taxes, a healthy allocation of overhead, and recapture of prior costs that developed a process amortized over the expected output over time.

From this analysis the bean counters submit to management to determine the selling price of the unit in line with their targeted gross profit. No doubt these batteries are produced on some sort of mass scale. It gets tricky because the largest percentage of batteries manufactured are components of an entire automobile. A lot of the overhead that is capitalized for just the batteries is also part of the finished automobile, so the cost accountants will come up with some apportionment so that the overhead is not double-counted for pricing a new car.

It is entirely possible that the mass produced battery cost is ~$100/kWh as a component of a new car. But as a stand-alone part to replace in an existing vehicle it may be more. I don't know Tesla's manufacturing process. But there could be a premium built in to the price to allow for the much slower inventory turnover and much lower demand. I can remember many years ago some automotive writer would price a new car using retail prices of all the components, from engines and transmissions to window glass and tires, and the price of just the parts was something like 4 times the new car price! This situation may be why a replacement battery has a much higher resale price.

I would look at it this way: If a customer told Tesla that he wanted to replace all the old 85kWh batteries in his 2013-2014 fleet of 100 Model S, you can rest assured that the price charge to this fictional customer would be a lot less than $22,000 a pop, perhaps as much as $5-6,000 less.

It is not clear to me whether the old battery (the alleged core charge) has any utility to be reused and remanufactured. In ICE, many of the components can be rebuilt or remanufactured and be as good as brand new parts. Hence, the core charge. Maybe the skateboard can be reused. Maybe the cells can be recycled or reused in other applications after thorough diagnostic testing. Maybe the cost to Tesla ain't cheap, so the $15,000 charge to keep the battery is approximately what it would cost Tesla to reclaim, recycle, or repurpose the bad one. Or maybe Tesla does not want its customers to tear apart their batteries to reverse engineer them, and they figure that $15,000 is enough of a deterrent. Or maybe I am ultracrepidarian and should stick to accounting! 😱

The second factor is that once upon a time, Mr. Musk declared that Tesla's Service Centers would never be a profit center. He said that if they broke even, then that was fine. But Tesla was not going to price its service and repair to make $$$$.

I think this has changed. I think that Musk wants the service centers to be cash flow positive and even make a modest contribution to the bottom line. Accordingly, the company will charge higher than customary prices for replacement parts to effect this objective. We have noticed that Tesla now charges diagnostic fees to assess issues, and frequently these fees are not credited against actual repairs made as a result of the diagnosis. The customer pays for parts, labor, and diagnosis. This may not be true 100% of the time at all locations, but there have been reports on this forum where this happened.

Thanks for chiming in. Your posts are never too late.

A lot of the overhead that is capitalized for just the batteries is also part of the finished automobile, so the cost accountants will come up with some apportionment so that the overhead is not double-counted for pricing a new car.

And this ^^^ is something I have always been curious about.
 

Droschke

Active Member
Mar 8, 2015
2,450
4,334
Future
Knowing what we know now about the battery replacement costs, the evolving battery technology, capacity capping, charge throttling, etc. (and this applies to any EV) why not lease instead of buying today?
 
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cduzz

Member
Jun 6, 2019
385
446
boston ma
Knowing what we know now about the battery replacement costs, the evolving battery technology, capacity capping, charge throttling, etc. (and this applies to any EV) why not lease instead of buying today?

It shouldn't really come as a surprise that expensive cars are expensive. Expect a car to lose half its value in 2-4 years, and half again in another 2-4 years, and another half again in another 2-4 years, etc.

Any new car is going to depreciate enormously in 4 years.

If you buy a new Model 3, it's maybe going to depreciate 22k in 4 years (the lifetime of the replacement battery warranty). If you buy a new model S, it's sure as taxes going to depreciate more than $22k in 4 years.

Contrary to other people, I think $22k to keep an otherwise good-condition S on the road is pretty reasonable. I'm far more alarmed about the S's tendency to break suspension components than the possibility that the battery may krump on year 9. After all, a replacement for my 9 year old S is likely to be a much more expensive car than another 9 year old S.

As far as lease vs buy, someone's going to buy the off-lease S; that's how I got mine (an off-lease 2016 90D bought in 2019, at the time tesla was still offering the 4 year B2B warranty if the car had less than 50k miles when you bought it). A current S long range will lease for $46k for a 36 month lease.

If you lease a car, you're paying 50% (or in that neighborhood, depending on the duration of the lease and expected value of the car at the end, etc) of the cost of the new car, and at the end of the lease you have nothing to show for it besides having been able to drive around for the duration of the lease.

Old cars and new cars are unreliable; you have *insurance* (in the form of a warranty) on a new car that manages the unexpected costs of repairing the car. I'm sure if you could buy a new car without a warranty it'd cost less than the same car with a warranty. If you buy an audi Q5 "CPO" but with an extended warranty it'll cost more than the same car without the CPO warranty. That added cost is the insurance policy in the form of a warranty.

We don't yet know the extent of the battery failures in the S platform. The first generation certainly has had some poor characteristics in the form of a high outright failure rate and caps put on it to keep them from catching fire. Many of these have been replaced with updated packs that address some of the failures, though probably not all of them.

Are later packs as unreliable? The 90s certainly have some weaknesses that may make them poor runners over the long haul. It's also possible that they degrade at a high rate but otherwise don't outright fail. I'd be sad if my car only went 150 miles in 2030, but if it still supercharges at some non-absurd rate it'd still be mostly usable and I'd keep using it or possibly think about buying a replacement battery.

Are the 100D packs unreliable? Tesla's had a lot more practice and a lot of beta testers (us); maybe they've got it figured out? I guess I'm a chump but if my car's still in good shape but has a rotten battery on year 9 (or 10 or 11) I'm inclined to keep it and just pay the freight on a new (not refurbished) battery to keep the car on the road rather than buy a new car. Ask me again in a couple years and I may sing a different song.

But hey, lots of people with an axe to grind, everyone's gotta air their opinions on the internet.
 

Rocky_H

Well-Known Member
Feb 19, 2015
6,106
7,087
Boise, ID
KBB has my private party car value at $20,000 irrespective of battery age (that is not a valuation factor).
That's not the right scenario. You are looking at your car, which still works. The topic is about a car with an already failed battery that is in non-working condition. In no way at all is that worth $20,000. So the rest of your statements based on this false premise are inapplicable. I'm not going to respond to the rest of your insults, but will just be reporting the comment for deletion.
 
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SmartElectric

Active Member
Jul 9, 2014
2,429
2,065
Toronto,Canada
We don't yet know the extent of the battery failures in the S platform. The first generation certainly has had some poor characteristics in the form of a high outright failure rate and caps put on it to keep them from catching fire. Many of these have been replaced with updated packs that address some of the failures, though probably not all of them.

As of a poll I saw last year on this site (couldn't find it), the vast majority of 2013 Model S are on original battery packs.
Also, if you view this site (which I contribute my survey results to), it shows similar:

Meaning, the incidents of failed packs is a likely minority of 2013 cars. FYI that my own 2013 S is 95% original capacity and identical supercharging to new after 145000 km.
 
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tes-s

Active Member
Oct 6, 2013
2,471
2,687
CT
As of a poll I saw last year on this site (couldn't find it), the vast majority of 2013 Model S are on original battery packs.
FYI that my own 2013 S is 95% original capacity and identical supercharging to new after 145000 km.
My experience is similar. 2013 Model S original battery pack, charges to about 92% of original capacity, supercharges a bit slower, with over double your mileage - 198,000 miles.
 
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Zuikkis

Member
Aug 19, 2020
228
260
Finland
It is entirely possible that the mass produced battery cost is ~$100/kWh as a component of a new car. But as a stand-alone part to replace in an existing vehicle it may be more.

This is a very good point. Also it should be noted that new cars currently in production are using different kind of battery. You can't just take one battery out from the production line and stick it into a 2013 car. It's a different part, with much smaller production numbers.

Also batteries are huge, and difficult to store because they probably need to the charged once in a while.. So you really can't make a production run for 10000 pcs to get the production costs down, because it would probably take years to sell those.
 

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