What is Tesla's upcoming 'under your nose' announcement?

[JRP3]

I have to agree with ckessel on this. On the other hand, if they just use it as "range washing", i.e. 'look what we can do", just in a few token locations, they get the ability to say "faster fill up than an ICE", and string people along for a few years until larger packs with higher charge rates can be rolled out. This way they don't have a huge investment across the country, or around the world, on a soon to be obsolete technology.

 

[CapitalistOppressor]

Anyone wanna lay odds on whether Tesla charges a swap fee or just does it for free as long as you return to pick up your old pack?

 

[SteveG3]

Bet they charge a fee to truck your pack from one location to another, i.e. if you want to take a different route out than return, are a snow bird... Likely some extra fee if you hang onto swap battery longer than 2 weeks. Can't have people swapping out there 5 year old battery and forgetting about it in storage!

 

[ckessel]

Maybe the SuperCharger announcement is that they are scaling them back in favor of a new strategy, lol

Who knows, maybe. As an investor, I'm not tickled if Tesla is throwing money at what are basically mutually opposing plans for addressing range issues. Yea, we hear about range from folks like Consumer Reports, but demand is fine regardless and reviewers that have tried the SC (including CR) were pretty happy with them. Tesla and Elon have been completely over the moon talking about SCs, how great they are, how competitive with gas, free for life, blanketing the whole USA and then Europe and on and on.

It seems it'd be knifing their very highly visibly touted SC in the back. If that's really the announcement, it'll certainly be interesting to see how they spin it as anything than saying SCs aren't the right solution.

 

[CapitalistOppressor]

I have to agree with ckessel on this. On the other hand, if they just use it as "range washing", i.e. 'look what we can do", just in a few token locations, they get the ability to say "faster fill up than an ICE", and string people along for a few years until larger packs with higher charge rates can be rolled out. This way they don't have a huge investment across the country, or around the world, on a soon to be obsolete technology.

It's not so bad as all of that. Batteries will get denser, but to a certain extent those gains will need be realized in lighter and cheaper batteries over the next decade rather than extra range. If you build a swapping infrastructure why do you really need more than 200 miles of range except as a niche application?

 

[SteveG3]

I have to agree with ckessel on this. On the other hand, if they just use it as "range washing", i.e. 'look what we can do", just in a few token locations, they get the ability to say "faster fill up than an ICE", and string people along for a few years until larger packs with higher charge rates can be rolled out. This way they don't have a huge investment across the country, or around the world, on a soon to be obsolete technology.

It may be an announcement and token implementation, but JRP3, do you really think it so unlikely a high percent of S/X buyers would drop $1.5M to have access to a swap network if they believe it will be built? If so, why not collect the cash and use it to actually build the darn thing.

 

[JRP3]

the ability to drive long range as conveniently as an ICE is the biggest drawback in public opinion.

Disagree, it's price. If people could get a 200 mile range EV for $30K very few would care that much about the range issue, especially with the supercharger network in place. Sure some would still complain, they always will.

Just in case anyone missed the switch over. This thread is solved. Tesla has already announced Battery Swap in the 10Q filed yesterday.

The 10Q doesn't say when it may be happening. Plus, even if that's an announcement, is it a supercharger announcement or the under your nose announcement?

 

[CapitalistOppressor]

And don't forget charging times. Filling a 200kWh battery quickly is exceptionally difficult with the electric grid that exists. You might need heavy duty power generation right at the charging source to even make it practicable.

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Disagree, it's price. If people could get a 200 mile range EV for $30K very few would care that much about the range issue, especially with the supercharger network in place. Sure some would still complain, they always will.

The 10Q doesn't say when it may be happening. Plus, even if that's an announcement, is it a supercharger announcement or the under your nose announcement?

It say's "near future". The SEC would probably spank them if "near future" meant in 2014. It would be the under your nose announcement I would assume, based on Elon saying "faster than filling a car" in relation to the mystery announcement.

 

[SteveG3]

ckessel complementary, not opposing plans. Swapping avoids giant mess on the handful of days of dramatically higher usage, and for those who find 30-40 minutes at SC no issue, don't drop $1,500 on the option. If you're one of the ones who thinks the wait is unimaginable, fine, we've made an option available to you.

 

[ckessel]

ckessel complementary, not opposing plans. Swapping avoids giant mess on the handful of days of dramatically higher usage, and for those who find 30-40 minutes at SC no issue, don't drop $1,500 on the option. If you're one of the ones who thinks the wait is unimaginable, fine, we've made an option available to you.

Well, that'll be the spin part. I'll be curious to see how they spin it because it doesn't look complementary at all.

To me, wearing my Tesla investor hat, Tesla is going to store dozens batteries in wait for the few high traffic days sounds equivalent to having piles of cash committed to something that's almost never used.

 

[Royal TS(LA)]

Anyone wanna lay odds on whether Tesla charges a swap fee or just does it for free as long as you return to pick up your old pack?

I have a feeling that the swapping infrastructure was already installed during construction work and that they tried to get the swapping station firmware to function properly until recently. The Model S is expensive enough to allow the assumption that this extra effort is already priced in. So, I think this is most probably for free, too. If not, maybe 10 bucks per quick swap?

 

[SteveG3]

Well, that'll be the spin part. I'll be curious to see how the spin it because it doesn't look complementary at all.

To me, wearing my Tesla investor hat, Tesla is going to store dozens batteries in wait for the few high traffic days sounds equivalent to having piles of cash committed to something that's almost never used.

ckessel, I'm an investor myself. I also really didn't like the idea of swapping. until yesterday. If they charge customers per mile at cost for the use of those batteries (probably $.20/mile), the batteries will be paid for, not cash going to something never used. To the customer it will be on par with the cost of gas, AND, they won't use up those miles on their own battery, actually making it considerably cheaper than gas (this is real, not fuzz Tesla lease math).

 

[JRP3]

It's not so bad as all of that. Batteries will get denser, but to a certain extent those gains will need be realized in lighter and cheaper batteries over the next decade rather than extra range. If you build a swapping infrastructure why do you really need more than 200 miles of range except as a niche application?

If you have a 400-500 mile pack do you really need a swap?

And don't forget charging times. Filling a 200kWh battery quickly is exceptionally difficult with the electric grid that exists. You might need heavy duty power generation right at the charging source to even make it practicable.

Large storage pack on site that can dump charge, plus provide FR for the grid, which utilities might pay handsomely for.

Still, you've all made some pretty good points, and with the 10Q wording, I am leaning in the swap direction. I'm not yet convinced it's necessarily the right move but it may be.

 

[SteveG3]

If you have a 400-500 mile pack do you really need a swap?

JRP3 it may well be obsolete in 10 years (with 500+) packs, but if it pays for itself and opens hearts and minds, why not? and fwiw, I really believe that while Elon Musk has no issue with making billions, he really does aim to accelerate the adoption of EVs as well.

 

[DonPedro]

Now the $1M question is: How will this affect the share price.

I'm thinking a lot depends on how good a job they do of selling it at the demo - it is not an automatic win. People have now gotten used to the idea of how a Model S works, and this is a radical modification of the concept. There could fear that Tesla has doubts about the current concept, while the new one is unproven.

If there is some unforeseen smartness/technology or other hidden gem (partnership?), that could help a lot.

 

[CapitalistOppressor]

So my quickie model.

There is a clear upper limit on the number of swap locations required. This simplifies life, because even scaled to support the entire vehicle fleet in the U.S. you only probably need hundreds of locations, not tens of thousands like with gas stations (actual number 121,446 as of a year ago). Scaling to achieve high swap volumes is straight forward, because typical usage is so low (only used on road trips).

In a decade swap volumes will make those locations wildly profitable if Tesla charges swap fees inline with gas costs, or else they charge customers upfront and then a nominal fee per swap, and might even make it completely free after the upfront charge. Any method allows for road trips that are cheaper and faster than ICE, with power supplied by Solar Panels.

They pirate the Better Place model and promise to support batteries from other manufacturers. Improve on Better Place by enforcing standardized form factors for batteries. Improve it more by selling the batteries to other manufacturers. Regardless of method the infrastructure is in place to encourage other manufacturers to adopt the model.

 

[SteveG3]

Now the $1M question is: How will this affect the share price.

If there is some unforeseen smartness/technology or other hidden gem (partnership?), that could help a lot.

share price impact tougher to figure out than what an Elon Tweet is really about

as to unforseen smartness... we are talking about a guy whose building a rocket at a fraction of Boeing came up with decades more time.

 

[DonPedro]

Just a thought: Is this the "Egg of Columbus" in terms of solving the Gen III equation? As far as I understand, the challenge there has been to make a car that has a sufficient range, yet get it down to the right price point.

The battery swapping would maybe allow Tesla to successfully launch a Gen III with a smaller battery pack?

 

[ckessel]

ckessel, I'm an investor myself. I also really didn't like the idea of swapping. until yesterday. If they charge customers per mile at cost for the use of those batteries (probably $.20/mile), the batteries will be paid for, not cash going to something never used. To the customer it will be on par with the cost of gas, AND, they won't use up those miles on their own battery, actually making it considerably cheaper than gas (this is real, not fuzz Tesla lease math).

Yea, I saw that too and it again seems to completely counter Tesla's other statements. Tesla has been pushing SCs with the free for life bit which is inline with the whole cheaper to operate angle they (very correctly) tout.

Then turn around and introduce a model that's not free and costs roughly the same as gas?

I get what battery swapping brings, it just seems to run counter to all that Tesla's currently promoting. As for winning hearts and minds, they've already raised guidance for this year and 50% for sometime in the future at 30,000 a year. They don't need to win hearts and minds any faster than they already are.

 

[CapitalistOppressor]

If you have a 400-500 mile pack do you really need a swap?

Large storage pack on site that can dump charge, plus provide FR for the grid, which utilities might pay handsomely for.

Still, you've all made some pretty good points, and with the 10Q wording, I am leaning in the swap direction. I'm not yet convinced it's necessarily the right move but it may be.

I don't know. But in 4 years it MIGHT be technically possible for a Model S class vehicle to achieve 500 miles (I actually assume it will). You will still need to charge $70k for the car and it will still be the same size. Think about that, it requires a doubling of power density and a reduction in price per unit of power by half over the next 4 years to achieve the same size and price point as the Model S.

Or you can plow that into a battery which is half the size and costs half as much and put it into a smaller car. And that is assuming a 100% improvement in just 4 years, along with all of the attendant logistical problems of actually charging the battery at an acceptable speed, both at home and at public stations.

Swapping might be necessary to achieved rapid adoption of EV's.

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Just a thought: Is this the "Egg of Columbus" in terms of solving the Gen III equation? As far as I understand, the challenge there has been to make a car that has a sufficient range, yet get it down to the right price point.

The battery swapping would maybe allow Tesla to successfully launch a Gen III with a smaller battery pack?

Yes, absolutely. Once the infrastructure is in place, there is no real need for cars with 300+ mile ranges at all. 250 gets you to any swap station in the country, or else it gets you home.