Please tell me what a 2013 P85 with a new battery is worth compared to one with an original battery. I'd love to see the market data on which you base your disagreement. I don't see any difference in pricing in my local market based on the age of the battery. Do you? And you are splitting hairs with my statement. The point everyone should be agreeing on is that the cost of battery replacement is too high and Tesla has not done enough to bring those costs down. All the people buying M3/Y are doing so without any concern for the downstream cost of replacing the battery pack. How many of them even know the cost? Fanboys don't care, it seems.
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Service says $22k for new battery on 2012 Model S
- Thread starter badpenny
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- bad battery hv battery
To avoid talking in circles, I agree. Fanboys don't mind shelling out $22k because it's the most amazing car ever built ever forever and ever, amen.
I'd say 95%+ of Tesla owners or future owners have no clue what a new battery pack costs out of pocket.
You are really letting your intense hatred of Tesla make you totally irrational. I see it all over this forum in every thread you post in now. The premise of the original question was for cars where the battery has already failed and needs to be replaced. Is it worth the cost to do the replacement? And then you made the absurd false statement that actually putting in the money and doing the replacement to put in a new battery instead of the old broken one would make the car worth "LESS THAN ZERO"!
And @TwistedGray rightly pointed out how insane that statement is. A car with a replaced good battery is obviously improved value over a non-working car with a failed battery.
And then you doubled down on it. Obviously doing the fix is very expensive and may or may not be worth doing, but it's indisputable that if someone put that money into it to do the replacement, the car would then be worth more in repaired condition than broken condition. But you insisted that your statement of the opposite was true.
And this was pointed out again:
And then you continued to argue.
It's not splitting hairs to dispute your assertion that doing the repair will drastically reduce the value of the car. That's just ridiculous and false in any scenario.
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I’ll bite
Seriously. Yes, you’d be underwater if you put the battery in, but that assumes you want to sell it.
I believe the OP wants to drive it. Right now it’s worth salvage value. With a battery, it has a value to him.
Let’s see, if he sells for salvage, saybfor 15k and adds 22k he has 37k. What does that get him? Well, I paid $37k for a 2015 S90D with 70,000 miles and 3 years left to the battery and drive warranty. Like him, I have free unlimited super charging.
So yes, he gets a slightly newer car with a little warranty. He wouldn’t know the cars history. So which is worse, take a bet on a used car, or at least know where your car has been, that it has a factory new battery with a 4 year warranty. Mmmm.
But both have value! Yes I can still sell my 2015 for mid $30’s, but I don’t need cash! I need a working car.
So I’d respectfully disagree with your assertion that he’s stuck with a worthless car.
henderrj
Active Member
I look at this thread because I have a December 2014 build with 236,000 mi on the original battery. You can understand my interest. I am not interested in hearing a discussion on what the value of the car is before and after the battery. Perhaps we can leave this go? That way we preserve the purity of this wonderful thread!
ucmndd
Well-Known Member
Totally agree.
For instance, you’ve decided a $22,000 repair has no material impact on the value of a car because an automated algorithm on a website can’t accommodate it. That’s not a math failing (we’ll get to that in a minute), but a reason failing.
As for the math, the proper way to consider this is to assess the value of the car with some reasonable assumptions both before and after the repair. Assume the failure already happened - used cars fail all the time, and is an associated risk of ownership.
I think it’s fair to say a 2013 P85 with a dead HV battery is probably in the $10k range. Let’s assume for a moment that your value for a normal condition, working 2013 P85 is correct at $20k.
So the real question: if you pay $22k to repair the battery, can you sell the car for ~$32k to break even? AKA is a 2013 P85 with a brand new battery that comes with a 4 year 50k mile warranty worth $12k more than a “normal” used P85?
To that, I say a hearty “maybe”. I think it’s a reasonable assumption that it would be close. Any rational person can see a brand new warranted battery has value, regardless of what KBB says.
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navguy12
Active Member
I think KBB software will have to be updated to include the effect of a new, warranty backed battery on the price of a used EV.
If I was in the market for a used TMS and one had a new battery and the other one didn’t and both had the same price, I know which one I would buy...
If I was in the market for a used TMS and one had a new battery and the other one didn’t and both had the same price, I know which one I would buy...
The old battery because the new one devalued its own price? That's clearly the only option there.
68882
Member
I think we forget when looking at the cold hard numbers people make irrational choices, oh say like spending 7K on repairs to a 30 year old Mercedes W140 which everyone in the family loved… well until pending next $5K repair sent it to the recyclers for $500. Some people love their car, give them names, spend another $22k well sure… $40k less than a new one without leather seats!
juliusa
Active Member
I think you may be misinterpreting the KBB estimated values. While the private party value may be $20,000 for a car of your age in reasonable condition, I don't think a car with a failed battery would be worth that much. Probably worth a few thousand for parts. I also think a car with a recently-replaced battery that is warrantied by Tesla would be worth more than one with the original battery.
Is it worth a $22,000 battery replacement? Seems pretty close. If the car with the failed battery is worth $3,000 - and it costs $22,000 to make it worth $22,000 - I would say that is typical of any major repair. The repair increases the value of the car, but not by as much as the cost of the repair.
navguy12
Active Member
If both were somehow, in a universe where marketplace forces don't apply, offered at the same price, I'd buy the one with the new battery.
Did you actually read the email before you punched in send? The battery pack had just been replaced. So we're talking about total failure at 1.5 years? I don't think so! To brick your battery pack at 1.5 years you've got to have some serious malfunction in your high voltage Penthouse management system. The fact that the 12 volt battery has been a perennial point of failure on the model S makes me wonder if the 12-volt system failed and drained the main battery pack. Even that wouldn't explain total failure of the pack unless it happened over and over. So it's a puzzle and is not explained by normal physiological 'wear and tear' inside the cells like dendrite formation. Not even remotely. Would be interesting to get an autopsy on the pack but I suspect Tesla won't give that to you.
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What's alarming frankly is not the few anecdotal sources describing premature battery failure, it's the overwhelming percentage of those that also show Tesla doing everything in their power to offload responsibility for these issues. There's your data!
electricar
Member
electricar
Member
It’s all about new vs reman/warranty vs customer pay as noted in the whole context of the thread.
cpa
Active Member
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.
juliusa
Active Member
What a product or service sells for is in a range - less than or equal what the buyer is willing to pay, and greater or equal to what the seller is willing to accept. If the buyer is not willing to pay what the seller is willing to accept, no sale occurs. Cost may or may not be a consideration of the seller.
As far as volume discounts, AFAIK Tesla charges the same for everyone. The only discount I'm aware of is for swag, and throwing in some end-of-quarter freebies like supercharging or FSD trial - nobody gets volume or other discounts for products or services.
Saying the service center would not be a profit center does not mean no services would not make a profit - just in aggregate they would not. Are service centers profitable? I guess someone could try to figure it out from their financial statements. But remember what the Tesla lawyers keep saying: Elon's discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today’s discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading “Risk Factors.”
As far as volume discounts, AFAIK Tesla charges the same for everyone. The only discount I'm aware of is for swag, and throwing in some end-of-quarter freebies like supercharging or FSD trial - nobody gets volume or other discounts for products or services.
Saying the service center would not be a profit center does not mean no services would not make a profit - just in aggregate they would not. Are service centers profitable? I guess someone could try to figure it out from their financial statements. But remember what the Tesla lawyers keep saying: Elon's discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today’s discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading “Risk Factors.”
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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.
And this ^^^ is something I have always been curious about.
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