Supercharging to be uncoupled for new owners - lowering price of S/X

[mspohr]

Tesla, of course, wants you to be asking that question and most likely wants you to conclude lifetime super charging is cheaper -- even if it isn't. Companies typically price bulk purchases to be more expensive on an equivalent per-use basis than per-use would be for most
typical customers. Think of all-you-can-eat buffets: are you really a voracious teenager?

It really depends on how much you use the SCs. If your primary use is only occasional trips and most of your charging is at home, it may be cheaper to pay as you go. If you do a lot of long distance traveling or you don't have a local charging option other than SC, then it's probably cheaper to go all-in on the bulk purchase.
I still think it's not worth it to SC for local use if you have home charging. You might get $5-$10 "free" electricity at the SC but it will cost you at least an hour of your time... this is about minimum wage (or less).

 

[RogerHScott]

I still think it's not worth it to SC for local use if you have home charging. You might get $5-$10 "free" electricity at the SC but it will cost you at least an hour of your time... this is about minimum wage (or less).

You're assuming that I don't have reason to be in the vicinity of the SpC. The rare occasions when I use my local SpC are when my car happens to need a non-trivial charge and I plan to go to either the grocery store in whose parking lot it is located or to a nearby restaurant.

 

[mspohr]

You're assuming that I don't have reason to be in the vicinity of the SpC. The rare occasions when I use my local SpC are when my car happens to need a non-trivial charge and I plan to go to either the grocery store in whose parking lot it is located or to a nearby restaurant.

I do the same thing if I have some reason to be close to the SC but I don't go there just to charge.

 

[ggnykk]

Not the best idea. Power user will still pay up and get "all you can eat" package. Tesla owners who only travel outside the city once a while will opt for paying kwh block as you go.

Not a very good idea if we want everyone to chip in to build out the supercharger network, I think the current pricing structure is better.

 

[msnow]

If I have $2500, I can either invest it, or spend it. If I spend it, I permanently lose it's income. It's sometimes called the Cost of Capital.

Even if Tesla stops making cars, the money they spent on SC's, could have been making income.

It has to do with managerial accounting.

In any case, if I spend the $2500 today on ice cubes for a party in 2018, I lose money even faster. 3 of the outlets in Lusk, Wyoming are ice cubes for 2018. However, if I can sell those ice cubes today, I'm better off.

How would it generate income if it's use is already committed to those of us that paid for it.

 

[mhan00]

It really depends on how much you use the SCs. If your primary use is only occasional trips and most of your charging is at home, it may be cheaper to pay as you go. If you do a lot of long distance traveling or you don't have a local charging option other than SC, then it's probably cheaper to go all-in on the bulk purchase.
I still think it's not worth it to SC for local use if you have home charging. You might get $5-$10 "free" electricity at the SC but it will cost you at least an hour of your time... this is about minimum wage (or less).

People aren't rational and don't value their time the same way you do. There will be people who go nuts for something that's "free" or a "deal". Just look at Black Friday stampedes with people camping out, sometimes a week or more in advance, just to get a barely adequate flat screen TV for 200 bucks off.

There are a couple of free chargers (level two) in my area at a nearby bank and I see people in their Leafs, iMievs, Volts and even a Model S sitting in their cars, charging. The spots- well, spot now, since one of the chargers is no longer working - are constantly full, many times with people sitting inside their cars. I'll pass by hours later and see them still there. Never under estimate people's desire for something "free". It's even worse if they think they've paid for it. The way people act at buffets shows that.

 

[ohmman]

The thing to remember about Tesla opening the chargers to other manufacturers is that the chargers are still Tesla-branded, and will still be primarily Tesla-occupied. Imagine driving your Accord to a BMW-branded fueling station, with logos and BMWs everywhere. For BMW, it would be valuable from a marketing perspective.

I'm sure I'm showing my bias here, but if I drove an i3 up to a Supercharger and parked next to a Model 3, I'd probably be hitting submit on the design studio the next day.

 

[TMobe]

I will be very curious as to how this plays out with regards to CPO cars. If the intent is to decouple supercharging from the car, I could see Tesla selling CPO cars with these new options instead of the rolled in lifetime supercharging they come with now.

Or, does Tesla just set some cutoff date? All VINs built prior to XX date have lifetime supercharging with the car, all VINs afterwards are the paid option. Good luck sorting that out on the used market.

I was thinking the exact same thing. The possibility that CPO's from tesla or private party. They may decide the lifetime charging would be limited to 1st owner or non transferable. If they still included lifetime charging only for Tesla sold CPO's they could get a higher sales price.

Food for thought

 

[johnnyS]

When we were at the Lusk supercharger in May, there were 10 Teslas there. Of course we were all headed to the Custer rally. While in Custer, we heard that two of the Lusk chargers were down. With 60 Teslas in Custer that made many of us very nervous about the return trip. I called Tesla before returning and the person on the telephone said they had 25 calls about the Lusk supercharger.

So Lusk may not be busy a lot of time, but it is a vital link in the cross country route.

Once Tesla commits to building a supercharger station, the cost per stall must go down as stalls are added.

 

[theslimshadyist]

I have to believe that the higher end Tesla's will continue to use the SpC's for free?

 

[deonb]

I have to believe that the higher end Tesla's will continue to use the SpC's for free?

As long as you pay for it, if will be free.

 

[Reeler]

Why not sell a Tesla to Chademo adapter (or other L3 standard) that has an UID so that the Supercharger can hit your account when you use the adapter to charge your non-Tesla car. That would take the competiing car companies out of the equation. Not that my LEAF could go cross country with the current network, it would be far better than current charging networks.

 

[Canuck]

I don't buy the argument that this is about lowering the price on the Model S/X by $2,000. That's simply an excuse. Good one Tesla, wink, wink, But let's look at this logically people. This is the start of no more "free supercharging for life of the vehicle" (for long distance travel only -- as if they could ever enforce that part!) so they must ease us out of this model. Why? Because this model no longer makes sense. Why? Because we will soon see used Model S's fall below $25k once the Model 3 comes out (with used X's to follow -- longer after, of course, but we must look to the future here) and it won't be long until you get a 2012 60 S with high mileage but free supercharging for $25k and lower, especially when comparing it to a new Model 3. Isn't it now patently obvious that Tesla simply can't continue to pump out vehicles with free SC for life because it will be very appealing to people with superchargers down the street, around the corner, etc. as they build more and more, to buy a used Model S for $25k or lower and never pay a dime to drive? And that's not too far off. So they need to limit the used vehicles that can do this, and this is start. In a couple of years or less, supercharger credits will be the only option for new S and X vehicles and it will be the only option for every Model 3 vehicle made.

So, you say, why not "free only for the original purchaser of the vehicle". Because that's a headache in reality. Tesla would then have to track the sale of its vehicles to turn it off, plus how do you determine the price for that? So I think Tesla has ruled it out.

It's just my opinion, but please feel free to flame me and dislike it. It's more fun when people say I'm out to lunch than when they agree with me. Especially since I can come back here and I said I told you so. (Well, except when I said AP 2.0 would be out by the end of 2015!).

Once you negotiate the space, install the transformer and charging equipment, it's almost "free" to add another plug. Right now, the only Supercharger sites where I regularly see lots of cars are in California. For the rest of the country, I'm usually alone.

Not true, in Canada at least. I know for a fact that parking lot owners who lease to Tesla get a monthly fee from Tesla for every single space, but that's probably nominal compared to the power that Tesla pays for. Adding superchargers to existing sites are not "almost free" at all. Tesla has to pay for the rent and power, not to mention maintenance and upkeep. And when you say it's only California that's busy, you're just looking at the future of Tesla for everywhere else, today.

Supercharger credits are not only coming for the Model 3 - they are coming as the only option for all Tesla vehicles.

 

[sorka]

look at the bright side - at least a BMW i8 won't be hogging a SpC stall for long while charging its 7.1kWhr battery

....and what does the charging taper look like with a battery that small?

 

[Footer]

Although California may skew the curve up, let's say the average cost for power at a supercharger for a typical Tesla is $0.05/mile. So with the $2500 built in to the cost of my Tesla, the break-even point for Tesla is 50,000 miles, not counting infrastructure costs. My break-even point is 52,500 miles including WI sales tax on my original purchase. I'm never going to rack up 52,500 miles on Superchargers in this car so I would have been better off paying on a per use basis. Maybe subsequent owners of my car will put on more supercharger use during its lifetime but it looks like Tesla is the winner for my car.

I think charging for charging is a better way to go, even for Tesla. I would gladly accept a $2500 reduced price on my next Tesla in exchange for pay per KW. The real selling point is access to the supercharger network when needed. I'm sure any day now we will go to Design Studio and see an across the board $2500 price drop and unlimited supercharging removed.

 

[u00mem9]

Tesla is giving up on their original and excellent concept because they desperately need to increase sales volume.

The cost of supercharging is not $5-$10. That is the cost of the electricity (almost). Of course you won't likely use $2500 worth of supercharging. The money IS needed to build the supercharging network. Letting buyers opt out of paying their part of the network will kill it. That would be like letting people pay for insurance after they are sick.

They need to build the network...otherwise the network fails to function at model 3 volume. They know this.

This is a move of desperation

 

[ChadFeldheimer]

Tesla is giving up on their original and excellent concept because they desperately need to increase sales volume.

The cost of supercharging is not $5-$10. That is the cost of the electricity (almost). Of course you won't likely use $2500 worth of supercharging. The money IS needed to build the supercharging network. Letting buyers opt out of paying their part of the network will kill it. That would be like letting people pay for insurance after they are sick.

They need to build the network...otherwise the network fails to function at model 3 volume. They know this.

This is a move of desperation

I disagree.

The capital/infrastructure costs of building out the supercharger network are insignificant in comparison to the gigafactory and fremont, and the gigafactory and fremont will be paid down with incremental future revenue. Why can't Tesla do the same with the supercharger network?

Bundling supercharger access into the base price of the car made sense at the beginning, when (1) Tesla did not have relatively easy access to working capital and (2) it was unclear what supercharger utilization rates would actually be. It was basically an experiment and a marketing point (long distance driving IS viable in an EV). Today, it seems clear that the supercharger network provides significant value and is viable by itself. Unbundling access allows Tesla to better align revenue with the value derived from the network.

 

[jelloslug]

Tesla is giving up on their original and excellent concept because they desperately need to increase sales volume.

The cost of supercharging is not $5-$10. That is the cost of the electricity (almost). Of course you won't likely use $2500 worth of supercharging. The money IS needed to build the supercharging network. Letting buyers opt out of paying their part of the network will kill it. That would be like letting people pay for insurance after they are sick.

They need to build the network...otherwise the network fails to function at model 3 volume. They know this.

This is a move of desperation

Your argument falls apart with the fact that supercharging use to be optional (or not available at all) on the Model S.

 

[RogerHScott]

@Canuck, compared to the (expected/hoped-for) volume for the M3, how do you figure the supercharging behavior of MS owners, new or used, even registers? Tesla needs to defend the (large) price differential between M3 and MS and built-in free supercharging is one
way to do that. I can't see how they'll do anything but lose money by giving MS buyers a choice of up-front ("for life") or pay-as-you-go,
since most people choosing the latter will likely come out ahead. It would make zero sense for TMC to completely unbundle
supercharging from the MS.

One concern I have about the shift towards a pay-per-use model is that it disincentiivizes TMC to build SpCs in little-used locations and
to expand or even maintain those in lesser-used locations. Basically each individual SpC now becomes a profit/loss center in the eyes of
the bean counters. Maybe they can come up with some sort of compromise where charging at more obscure locations costs (pay-per-
use customers) more in order to support an SpC at that site at all. Come to think of it, that's actually an advantage of opening SpCs to
other kinds of cars: having more users of the sites in lower-traffic areas justifies having more such sties in the first place, which is good
for everyone.

 

[RogerHScott]

Unbundling access allows Tesla to better align revenue with the value derived from the network.

That's not necessarily a good thing for TMC, right? The goal of a business is not to align revenue with value -- it is to have revenue exceed value by as much as possible. This unbundling seems likely to reduce the revenue TMC generates from the existing value.