Tesla battery swap: Post announcement discussion

[wraithnot]

I don't really see how the economics of this work for Tesla. If the packs cost $25K, a swap costs $60 of which $50 is profit, an individual pack has to be swapped 500 times to break even. If the packs are kept for an average of 2 days and utilized 50% of the time, that's about 2000 days or about 6 years. Pretty slow payback IMHO.

I don't think they plan to make money on the swap stations. I think they plan to make money by selling cars to people that won't buy an EV unless it has the ability to fuel as quickly as a standard car- even if they would almost never use that ability. People aren't always super logical . . .

 

[hockeythug]

I don't really see how the economics of this work for Tesla. If the packs cost $25K, a swap costs $60 of which $50 is profit, an individual pack has to be swapped 500 times to break even. If the packs are kept for an average of 2 days and utilized 50% of the time, that's about 2000 days or about 6 years. Pretty slow payback IMHO.

Musk claimed 60% profit margins on the swaps.

 

[Andrew]

Some people have commented that any money going to swapping stations is a bad idea. However, I think most of us agree that the primary benefit to the battery swapping option is that is a great marketing tool.

So I wonder: Would you rather have Tesla spend the money on implementing battery swapping instead of paying for traditional advertising? Musk said that it would cost $50-$100 Million to build out the swapping stations. To give that a sense of scale, Audi spent $59 Million on advertising just in the first three quarters of 2008. (That was the best stat I could find, from here.)

I'll take battery swapping stations over advertising any day!

 

[Monto]

Are packs swapped between customers or are only Tesla owned packs swapped? If customer packs are merely being stored at these stations and not put into the rotation won't many of these stations run out of room?

Yes, You can get your original pack back when you return. They will most likely add the pack to the storage grid, but not give them out. They need packs anyway and they are getting free use of our packs while we use the loaner. Also, this way your original pack is charged and ready to go when you return to swap out again.

 

[EVNow]

50 packs per site looks rather small - esp. as Musk says the place will be over stocked.

If the average car takes 2 days to come back and get their original pack, we are looking at only 25 swaps per day. If the average is more like 5 days, it would allow just 10 swaps per day. Since these are to be located in the busiest traffic areas, just 10 or 25 swaps per day doesn't like realistic.

Let us say there are 50k Tesla cars in SF & LA in a few years. 1% of them are traveling between them every day i.e. 500 cars. This only allows 5% or less of those traveling to use swapping. It gets worse on holiday weekends.

 

[FredTMC]

50 packs per site looks rather small - esp. as Musk says the place will be over stocked.

If the average car takes 2 days to come back and get their original pack, we are looking at only 25 swaps per day. If the average is more like 5 days, it would allow just 10 swaps per day. Since these are to be located in the busiest traffic areas, just 10 or 25 swaps per day doesn't like realistic.

Let us say there are 50k Tesla cars in SF & LA in a few years. 1% of them are traveling between them every day i.e. 500 cars. This only allows 5% or less of those traveling to use swapping. It gets worse on holiday weekends.

Swapping will be a lot less frequent that supercharging. I think that there will be a mix of 5% swaps to %95 supercharges in areas that offer swaps (e.g. California)

 

[mitch672]

50 packs per site looks rather small - esp. as Musk says the place will be over stocked.

If the average car takes 2 days to come back and get their original pack, we are looking at only 25 swaps per day. If the average is more like 5 days, it would allow just 10 swaps per day. Since these are to be located in the busiest traffic areas, just 10 or 25 swaps per day doesn't like realistic.

Let us say there are 50k Tesla cars in SF & LA in a few years. 1% of them are traveling between them every day i.e. 500 cars. This only allows 5% or less of those traveling to use swapping. It gets worse on holiday weekends.

Elon said initially they would be stocked with 50 packs, he didn't say what the total pack storage capacity per swapper is, so we don't know, but it could be built to hold 100 or more, it's one of the unknowns currently. Also, if the swapper is out of packs, I guess they would have to use the SuperCharger.

 

[CyberDutchie]

And if swaps are the solution to gaining mass market, why build out super chargers? Tesla's message on the swapping is shooting holes in its message about Superchargers.

I don't know, being in marketing myself, I think its brilliant the way Elon has been able to boil this down to the very simple message of "fast or free". He's getting credited with Steve Jobs like showmanship, deservingly in my opinion. Making complex things sound simple is a great gift that only a few possess.

 

[jvonbokel]

Let us say there are 50k Tesla cars in SF & LA in a few years. 1% of them are traveling between them every day i.e. 500 cars. This only allows 5% or less of those traveling to use swapping. It gets worse on holiday weekends.

In a few years there will still be less than 50k Tesla cars in the entire US. There are ~13k so far, but now that they're starting international deliveries, the rate in the US will slow. I believe Elon said long-term about 1/3 of production would be for US sales. Even assuming production ramps up with the launch of Model X, to something more like 35-40k/yr total between the two, that's still just 12-13k/yr in the US.

That said, the 50 packs is only a starting point. They will expand each station according to demand, in the same way they have already started expanding the number of bays/ports at Supercharging stations.

 

[Bubba]

Swapping will be a lot less frequent that supercharging. I think that there will be a mix of 5% swaps to %95 supercharges in areas that offer swaps (e.g. California)

I think it might even be lower than that.
1% to 2% of all people will be Swappers.
98% will be Superchargers.

50 battery packs per swap station is probably enough for the likely volume.
This is the type of option that will be rarely used, only for emergencies or people in a huge rush.

 

[Kipernicus]

Agree with all the thoughts written so far.

1. As a 60, I can definitely see a scenario where I would want to pay for a swap. To get from Harris to Tejon, at highway 5 speeds, I would want a pretty full charge on the 60, which means waiting 45-60 min at the supercharger instead of 30 with an 85. Often we have a schedule to keep, or it's late at night and I don't want to have the whole family sleeping in the car, for an extra hour it is worth it to swap.

2. 50 packs may not be enough especially if they have to stock both 60s and 85s. Would be easier to have just 85s and charge the 60s a reasonable premium to have an 85 for the trip. I'd pay up for that too. This does create concern, however, that less 85s will be sold.

3. I can see a rent-the-pack model being a possibility for Gen3, which relieves the need to pick up "your" pack at the end of a trip and makes swapping much more scalable (not limited to just 50 being checked out at a time). Yes, just like the Renault/Better Place model but with much larger packs you don't need as many stations nor as much pack inventory.

Tesla will do it right!

 

[mtco]

Sorry to disagree with so many, but I want this! I believe it makes complete sense for cross-country trips. If the conservative or "safe" max range of current batteries is 177 miles, then for a trip I do twice a year between Denver and Kansas City (650 miles door-door), I would have to add about 3 hours to my normal 9 hours just for charging (3 stops minimum, if SC's were spaced at ideal distances on the route). Now I don't mind stopping 3-4 times if I can hit the bathroom, get a drink or a bite and hit the road again quickly - which a battery swap would allow. But the additional 3 hours to charge would be out of the question on such a trip. And I don't want to drive less than the 75 MPH allowed - after all, I'm driving a screamin' fast awesome car!

The current high-traffic corridors with SC's are Boston-DC and SF-LA. Those are 450 miles and 400 miles, respectively. Two stops - not so bad, could possibly get by without full hour charges also. I'll bet you would have plenty of takers that would spend 60 bucks to save an hour - especially if the trip is infrequent.

I agree with the questions about the practicality and logistics of storing "my" personal battery and giving it back when I want. I believe Tesla was anticipating the hue and cry from owners that they may end up with a battery with less capacity or "health" after a swap. But there are solutions to that. Charge a premium to do the personal battery storage for example, or if there is a way to measure the "health" or capacity of a battery, just guarantee that eventually you can have the equivalent back, etc.

When battery range doubles (say 350 "safe" miles), swapping becomes way less important, but for now it will allow Tesla to sell more cars to the doubters and help significantly with really long trips.

 

[mattjn]

Q: When you return the battery pack, do you have to pay again for the swap? And next question - how is this technology better than Better Place's?
Elon: Yes, by the time you get pack you get your own pack back fully charged, and you pay again for the pack swap.


No one has noticed this little tidbit? It's not going to cost you 60-800 dollars, it's going to cost 120-160 dollars. Yeah, not really the same as an ICE car.

 

[Enadler]

Q: When you return the battery pack, do you have to pay again for the swap? And next question - how is this technology better than Better Place's?
Elon: Yes, by the time you get pack you get your own pack back fully charged, and you pay again for the pack swap.


No one has noticed this little tidbit? It's not going to cost you 60-800 dollars, it's going to cost 120-160 dollars. Yeah, not really the same as an ICE car.

You get your battery back fully charged so you are getting 2 "full tanks" for that price.

 

[NigelM]

No one has noticed this little tidbit? It's not going to cost you 60-800 dollars, it's going to cost 120-160 dollars. Yeah, not really the same as an ICE car.

In an ICE you'd still use gas going both ways on your trip, so it really all depends on what scenario you use, but you're basically right, although a better analogy might be that of pre-paying the tank of gas on a rental car; unless your distances are just right that tank of gas could be very expensive.

 

[ChadS]

[Edited out part others had already answered]


Owners were not the target of this announcement. The auto industry was. The message is that EVs will be able to do EVERYTHING better than gas cars, so you can no longer dismiss them as niche vehicles - you had better build some if you want to be in business after we put in this infrastructure. (Which will take years, yes. But the automakers will need those years to launch a line of vehicles with a new propulsion system. They have to get started now, and the fastest way is to buy in to Tesla's platform and ecosystem. Too bad they will put their efforts in to building another system purely to avoid assisting Tesla. Infighting among automakers colluding on this new system will delay it by years).

 

[Bubba]

No one has noticed this little tidbit? It's not going to cost you 60-80 dollars, it's going to cost 120-160 dollars. Yeah, not really the same as an ICE car.

The logistics of battery pack ownership make this a requirement.

Yeah, it is not a perfect solution. But it is a reasonably good solution for people that are in a hurry and cannot wait for a Supercharger.
It is a niche solution. It is an option that we have. Most people won't need it. It is something for people who are in a situation where they are in a hurry. It is a 1% or 2% of the time solution when you absolutely gotta get there fast.

Would people do a swap if they have over 50% SOC on their battery? I don't think so. They will use a Supercharger for 10 minutes to quickly get to 75% - 80% on their battery pack.

The only people that really need the Swap are people who are:
1) below 50% SOC, still have and still have a distance to go till they reach destination that is beyond their range
2) also in a hurry and time limits to schedule
3) likely coming back the same direction in the near future so picking up original battery is possible

If you fit that scenario and the battery swap station is in the perfect spot for your trip, it makes sense to use it.

For the 98% to 99% that are not typically in this situation, we have Superchargers.

 

[dadaleus]

Wow, over 60k views of the closeup video of the swap I took on my iphone (posted earlier in this thread). I had a heck of a time posting it--Verizon LTE and 3G were jammed as was Tesla's wifi, so I first uploaded in low def. But once I got it uploaded, Jason Calacanis (@Jason) tweeted it, then Techcrunch used it, and then Elon tweeted the Techcrunch article. I'm pretty shocked.

Anyway, I agree with a lot of others here. Basically, I think Elon is very aware of the Crossing the Chasm challenge and wants to make sure Tesla makes it to the mainstream consumer. That means every objection must be answered aggressively. Many of us here are early adopters so we understand that Supercharging actually makes for a perfectly reasonable long distance experience combined with a far superior day to day experience. But Elon wants to have a killer answer to any possible objection of the more average luxury car buyer. Clearly this particular issue is real--just consider Broder.

A couple approached my wife and I last night because they recognized us from Gallons of Light. They said they had previously pretty much decided not to get an S because of the concern about long distance drives. But a salesrep pointed them to Gallons of Light and it made them feel that a family can really go on a long trip, and this pushed them over the edge. I think the battery swap is to answer just this concern. It eliminates any difference in long distance travel (with the notable exception of the number of stations depending on where you are driving).

That said, I think Elon won't be surprised at all if the swaps are rarely used. And that's just fine. It's a pretty small investment to reassure potential buyers and get Tesla across the chasm.

And on the other other hand, if this exists on my route, I actually might just use it once in a while. Mind you I am perfectly happy with Supercharging. But I could see doing a solo drive to my parents place up in Central CA and wanting to get there by a certain time, and so just doing the swap and picking up my battery on the way back. Yea, its a bit of cash, but on a schedule it could be worth it. I'd still have to use the bathroom (over sharing here am I?) but I could grab a quick to go item and hit the road in minutes instead of an hour.

 

[ggies07]

As I've been reading this thread here and there today, seeing lots of calculations, I think I've come to the conclusion nunbers dont matter with this. The fact that an EV can now have a full battery faster than filling up with gas is going to be great to tell people who are haters or on the fence of EVs. Who cares whether they use it or not, its technically achievable.

 

[NigelM]

1. As a 60, I can definitely see a scenario where I would want to pay for a swap. To get from Harris to Tejon, at highway 5 speeds, I would want a pretty full charge on the 60, which means waiting 45-60 min at the supercharger instead of 30 with an 85. Often we have a schedule to keep, or it's late at night and I don't want to have the whole family sleeping in the car, for an extra hour it is worth it to swap.

I can see where you're coming from but what about the return journey? Sorry I don't know the distances, but here's an example to clarify what I mean:

You do a swap ($80) at Harris drive to Tejon, then you want to return home and you're faced with either supercharging at Tejon or another swap ($80) and back in Harris you swap again ($80) to get your original battery back. Cost has been potentially $240 to avoid 2 extra hours in the car?