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Discussion in 'TSLA Investor Discussions' started by electracity, May 9, 2016.
Why not make money off the model 3?
because Tesla has promised that the SpCs will be free of charge.
If they could make a profit off the SuperChargers by licensing the technology and allowing other brand to use it, there would be some short-term pros and cons. Pros is more revenue immediately. Cons would be more crowded SuperChargers, especially during busy times, and the they would likely have to plow all revenues into growing the network of chargers. Then again, if others join and start deploying chargers that Tesla owners could use, then it would be win-win for all, but likely an issue in the short term growth period.
Was that promised for the model 3? The quote I know is "includes supercharging", which I interpret as the capability being built into the base car.
I guess the flip side of the question is whether totally free supercharging could be included in the price.
I believe they already walked back that statement to say "standard supercharging capability", not "free supercharging"... I read that to mean you can "buy" free supercharging for a one time fee of $X,000. I think it would make sense to do it this way, so that city dwellers who don't frequently do long distance driving can save the upfront fee, and perhaps just pay per use in the future? Which means it could be a profit center per the OP's suggestion...
I doubt a one time fee. But maybe. The problem I see is:
1) Most attractive to the highest mileage drivers without home charging
2) Disappointing for the occasional user, who is probably the typical M3 customer.
I suppose there could be a high one time fee with a pay per use option.
When Musk said he was doubling superchargers I started to think of this network as a separate business. How does Tesla turn this large expense into a money making business over the long term? I don't believe other car companies will do their high speed charging for free, except for luxury models.
It seems pay per use is unlikely as Super chargers don't have the payment infrastructure right now. I think they will go for subscription model. monthly/yearly/lifetime.
IIRC, the lower versions of MS in 2013 came without free SC, but you could pay $2000 for that option on a S60. Since the discontinuation of these lower capacity versions, and subsequent price increase to the base price, free SC have become standard. I speculate the intent with M3 is to give the customers a choice, based on their needs. You can check the $X,000 option to include free SC for your car, or decline it and have a lower initial purchase cost, but pay per use when you need it. Or perhaps you don't even get the pay per use option if you don't purchase the free SC option?
They could do it like the tollway where the customer's account must maintain a positive balance.
I'm sure they put the software hooks for billing in from the beginning. They would want to stay flexible with future plans.
Investors would love to see a new long term profit center from Tesla. The obvious question is the effect on M3 demand.
while Tesla may have charged for the hardware to enable supercharging, cars that were not SpC enabled haven't been sold for 2 years, the actual usage of the SpCs is with no additional charges
I don't know, I can't comment on vaporware
Just a thought exercise.
ICE car: 12000 miles a year. (using premium fuel costs since BMW 3 series do)
At 20 mpg = 600 gallons of gas x 2.5 dollars/gallon = 1500/year
At 30 mpg = 400 gallons of gas x 2.5 = 1000/year
For five years: 7500 or 5000 for gas.
If Model 3 charged 2000 with initial purchase to activate supercharging ability.
That's 400/year for five years. Less the longer the car is kept.
For five years or more: 2000 for SuperCharger access.
IMHO, it would not seem too unreasonable to charge an upfront fee to supercharge for those that want it. I based my $2000 on the supercharging option Tesla used to have for Model S, 60kWh model.
Not sure about pay as you go. Not sure if it's feasible given how supercharging is set up for now. May change in the future.
I would hope that as Tesla builds out more superchargers, other automakers (Ford?) may see the benefit of using Tesla's network to charge their future EVs. Thereby allowing Tesla to further monetize their network from the "competition".
The Superchargers don't need payment infrastructure. It can all be done with software in the cars. Pay-per-use (specifically pay-per-minute, ~$0.25/min) makes the most sense IMO, because it effectively discourages abuse, while being more affordable upfront to prospective Model 3 owners. The subscription model doesn't deter excessive local charging or stall-hogging, but a pay-per-minute fee would.
Speaking of stall-hogging. Hopefully the person who left the model S isn't hurt...
Dutch Model S in Supercharger Bay for over 2 days
For cars already bought, yes. And in all likelihood this will remain the case for the Model S and X. But Tesla has not promised it for all future cars, specifically for the Model 3.
City people or second/third car Model 3 owners may want to use a SC once a year or less. Pay per use makes more sense. Transaction fees are minimal. $2000 extra on a 35k car is more important than on a 100k car.
I would really like to see the math (profit margins) for a Model3 built in California exported to another market (say Europe or China) and then allowed to "supercharge for free" for the entire lifetime of the car.
Why would Tesla otherwise only mention "capable" (i.e. change its Model3 website) as reported below and not "free"?
Tesla walking back some language around the Model 3’s features: Safety, Autopilot and Supercharger [updated]
Model3 SC access likely either comes with a lump-sum or a per usage fee (software unlock for one of the two), otherwise the math really doesn't add up for a Model3 imo.
This is an old story (article is from April 8th). A non-story in fact. I do not understand why you put it up again.
Tesla never said that all base-price model-3 could use the SuperChargers for free. That is just your interpretation. So no need for anyone to do the math for you on that.
I am also pretty sure this has been explained to you several times already. Please do not bring this up again, not here, not on other forums.
Since Tesla has never had free electricity in the business plan, I'm not sure why they would start with the model 3.
Lump sum didn't work in the sales process with the model S, and I doubt it would work with the model 3.
Oh really? How about a certain CEO?
Elon Musk Confirms Free Supercharging for Tesla Gen 3 (Model E) - Inside EVs
or original source
Elon Musk Confirms Free Supercharging for Tesla Gen 3 Vehicle Owners
PS: Also discussed in this very forum on that day...
Elon Musk in Munich: "Free long-distance trave for ALL FUTURE VEHICLES!!!"