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"Free" batteries!

"Free" batteries!

Some assumptions:

A Model E battery will cost about $12k. I saw this figure a few times on the internet, so it must be true...

Tesla will enter into partnerships with other automakers and perhaps others in the auto and energy industry.

Other automakers will not be interested in the free charge idea and will not wish to subsidize it.

Free Supercharging will be reserved for the S and other expensive models where the costs for charging are pre-paid.

Tesla will offer quick-charge technology, especially effective with the Model E's smaller battery. Maybe a full charge of that battery in 20 minutes?

Buyers of the Model E and variants will prefer to get the car cheap and pay a modest fee for charging, if there are lots of convenient and attractive places to do this, rather than pay something like 25% more for the car up front and have to locate rather remote Supercharging facilities.

Buyers of cheaper models will not expect free charging and will be glad to pay for recharges that are about one-third the cost of a gas refill.

------------

So, Tesla basically lends out the battery to customers, both to Tesla buyers and to those who buy BMWs with Tesla batteries. Tesla and partners build a huge network of for-profit KwikCharge stations.

If the Model E is charged up on average every 250 miles at a cost of $15, Tesla makes $12K every 200,000 miles, enough to pay off the battery costs. Of course the batteries get cheaper, so newer models pay off faster and faster as time goes by. And older cars need more frequent charging and so as time goes by, they pay off faster as well! There is also the considerable recycle value of the battery which can be repurposed for stationary use, etc.

Gas stations make little off gas, even the $80 fill-up. The mini-mart is where the money is, not to mention car washes and other services. Yes, and the Tesla Cafe where In 'n Out Burger is put to shame with the mighty Electro Burger. Sadly market research shows that the Musk Burger name cannot be used effectively. The fries would be fried in organic duck fat of course...

Tesla could literally give away batteries to other automakers, but retain the charging rights. There could be no quicker way to universal adaptation. Of course BMW, etc might well want to get in on this one would think...as perhaps would a chain of traditional gas stations. One would think Shell would want to make money on both electric and gas driving.

Many on this forum express their distaste for the gas station model. They are thinking of the basic smelly oil-stained station we are all used to. A charging station would inherently be clean and odor-free, and could be more parklike, rest stops really. They would have by far the best restrooms and food in the industry, great landscaping and be attended and safe at all hours. The 20 minute full charge would ensure that the mini-mart would do a good business. They would be famously great and attract more and more people to electric driving.

If you could combine a charge and a carwash without electrocuting anyone...

Consider various trickle charger options, out back by the dumpster, for owners of other electric cars. Make money off of everyone and promote electric car driving. Sell Teslas as they see dozens of Teslas get charged up and go down the road and they are still there getting 13 miles per hour hooked up to the Post of Doom...

The chain of Supercharges is always going to be useful. They are a reward for Tesla owners who buy the profitable expensive models. And these flagship models will always be important for Tesla's image.

What I like about this general idea is that it doesn't require magic batteries or really any new technology, yet becomes even more profitable and useful as new technology unfolds and as sales of electric vehicles expands. It does not seem to be something that would ever become irrelevant or unprofitable. It makes the adoption of Tesla batteries a deal that cannot be refused really. If the charging network was in place and the motive power was free, why would anyone make or buy ICE vehicles (although there will always be special purpose models of course)?

I mentioned the idea before that Tesla could essentially evolve into a battery and charging company, supplying and servicing other brands, which is a heck of a lot easier than making and selling the cars themselves. Surely they would always make at least a few flagship models to keep up the magic, but think instead of hundreds of giant battery plants making batteries for about every make and model of cars, solar storage, etc. and running a huge international chain of compelling charging stations. It is almost a perpetual motion business model. Better than razor blade or printer ink schemes...

Of course this turns into a world monopoly and would attract the ire of every sort of government and eventually would be broken up. Wouldn't matter to Musk. By then his goal of converting to electric driving would be done, Tesla would have trillions in the bank and Musk would have the dealership rights on Mars anyway.

DTsea | 31. heinäkuu 2014

200000 miles.... 16 years. So tesla carries cost of battery for 16 years? $12000 * 500000 cars per year is $6 billion invested per year in battery inventory with a payback of 16 years- and by your numbers that provides no return, ie a 0% cost of money.

This plan would bankrupt tesla in short order.

Red Sage ca us | 31. heinäkuu 2014

ASSUMPTION: No one, anywhere, will ever have to pay to use a Supercharger. Ever. They will be free forever, and to every Tesla owner, from the release of the Model ☰, and into infinity.

DTsea | 01. elokuu 2014

Sure if somebody wants to plow billions every year into batteries, then EVs would grow faster. Who will bankroll that?

Remember TM is still losing money even though they SELL the batteries.

Grinnin'.VA | 01. elokuu 2014

@Red Sage:

"ASSUMPTION: No one, anywhere, will ever have to pay to use a Supercharger. Ever. They will be free forever, and to every Tesla owner, from the release of the Model ☰, and into infinity."

This is consistent with Tesla's statements.
However. "forever" ... "into infinity" is a very long time.
Although I value your point of view, I don't trust this exaggerated claim.

Ron :)

DTsea | 01. elokuu 2014

What's the exaggeration? Tesla model is you pay up front for supercharger when you buy
That minimizes cash flow for tesla. Battery.... same deal. Owner pays

Better place tried the other way. They are gone.

Red Sage ca us | 01. elokuu 2014

Idunno... Thought I had posted it here? I might be confusing some posts I made at TMC instead...

OK, I found this conversation among my notes:

SCCRENDO wrote, "One issue with suddenly allowing 60 owners free charging would be to annoy those who have paid $2000 for the option. You will see these forums explode."

joehuber wrote, "If people think Model 3 Supercharging will be free/included, then why isn't Tesla doing that already with today's 60 kWh MS?"

That is why I would do this in stages, ahead of the launch of Tesla Model ☰, but after the launch of Tesla Model X. To review:
The profits from Model S and Model X will fund the Supercharger expansion, because those cars will likely always have the highest gross profit margin per unit.
At some point after the launch of Model X, the 135 kWh version of the battery pack would be revealed as an option for both Model X and Model S.
At that time the Model S 60 would be discontinued.
Anyone with an unfulfilled order for a Model S 60 would get an 85 kWh battery pack that was software limited to 60 kWh, with Supercharging enabled.
Those who had recently received their Model S 60 prior to the announcement, and paid the $2000 fee for Supercharging, would be in the same situation as those who complain about having paid for the $250 Parcel Shelf, after it was made an included line item.
I'm thinking this would be done in the last half of 2015, or the first half of 2016. Either way, it would be at least another year from now, and up to about 18 months away. It should not be done before the higher capacity battery pack is available. It should definitely be done in time to inform future Model ☰ owners that Supercharging will be 'Free for Life' for them all. This is because the Model ☰ is the endgame.

Grinnin'.VA | 01. elokuu 2014

@DTsea

"What's the exaggeration? Tesla model is you pay up front for supercharger when you buy
That minimizes cash flow for tesla. Battery.... same deal. Owner pays

Yes, the current Tesla SC deal minimizes Tesla's need for cash in the short run. That deal works for me since I have the money. I'm suggesting that there are many prospective Gen3 buyers who find paying the up-front $2000 fee a challenge; Tesla is better able to raise that capital. I believe it would be easy for Tesla to offer such an option. IMO it's just a matter of marketing strategy for Tesla. They can continue to offer SC service exactly like they do now. They could offer pay-as-you-go SC service for future buyers without any adverse fallout as long as they fulfill the existing SC deals. I believe that offering both of these at the buyers' option would attract the most Gen3 buyers.

If you think this would be illegal, immoral, or inconsistent with Tesla's goals, please explain.

BTW, I would consider any claim that a business marketing deal would last "forever" ... "into infinity" as an exaggeration. You have no crystal ball showing a perfect view of Tesla's future. Why would I not consider your claim to be an "exaggeration"?

Ron :)

Red Sage ca us | 01. elokuu 2014

Grinnin' Ron wrote, "I'm suggesting that there are many prospective Gen3 buyers who find paying the up-front $2000 fee a challenge; Tesla is better able to raise that capital."

My suggestion is that the very existence of Tesla Model S and Model X was to fund:
Installation of Superchargers
Expansion into multiple territories
Increase of Tesla Store locations
Proliferation of Service Centers
Thus, there is no need for Model ☰ owners to pay for the infrastructure that profits from Model S and Model X sales will have already provided. From this point forward Model S and Model X revenues will be 'play money' for Tesla Motors to fund whatever endeavor they like. After the Supercharger network is fully installed, Tesla can upgrade existing locations with battery backup or solar panels, if not both, for instance.

"If you think this would be illegal, immoral, or inconsistent with Tesla's goals, please explain."

Illegal? No. Immoral? No. Inconsistent? Yes. I think that Tesla Motors will make the whole thing as simple as possible for all of their Customers... Even if there is a Zombie Apocalypse.

FREE ENERGY | 02. elokuu 2014

Carlgo :) u just got it right, and keep on the gospel for our future :) with a prediction from Jules Verne himself, qoute: in the future all Cars will have air-engines (Check MDI air car from France)

centralvalley | 02. elokuu 2014

I do not believe that Tesla will ever be in the business of charging for their Superchargers or developing additional proprietary charging spots for others. These are nickel-and-dime transactions that will cost a lot of money to monitor, maintain, process and collect.

What is more likely is that after the Supercharger network is fulfilled, that they would license the fast-charging concept to a third party to allow for any BEV to plug in and receive a 80-100 kWh fast charge. The plug end would not be compatible with Tesla, nor would the charging stations have the word "Tesla" on them, nor would the apparatuses themselves resemble the current style of Superchargers. They would use whatever plug standard becomes generally accepted in the industry.

The charge to utilize these proprietary fast charging stations would have to be less than half the equivalent cost to refuel an ICE for a similar distance, so the economics might not make sense for a few more years.

Anemometer | 02. elokuu 2014

I read a bit of your post and to be honest the alarm bells started to ring that you obviously never looked at the model S60 pricing.

They don't come with free supercharging. It's the stripped down bargain basement model.

I you want to access free supercharging for the rest of the cars life - pay $2,000 on the options list. Maybe they don't teach maths these days but $2,000 is not 25% of the cars up front cost. Whether that be a Model S or a Model III.

If you think about the business model for more than 3 minutes you'll work out how they do this...

The $2,000 is mainly infrastrucutre related. He's fixed the cost of the future energy by using only solar power supply contracts into the grid + the solar on top of the station (which won't really provide the require inputs). They then looked at a typical owner's yearly long distance driving. Probably say 10-20 trips where you will need to supercharge. Say you stop and you fill up 50kWh of electric at whole cost price that's less than $0.10/kWh so $5 - max. x 20 per year (max) $100.

Those are just typical examples. Some people won't use it depite having it onboard (85kWh models) and some will make the most of free electric to visit everyone they know in a 1,000 mile radius :-)

Still for Tesla it's a lot cheaper than sepnding money on adverts.

I don't think they'll be allowong other manufacturer cars to come along and charge up as it would clog up the bays. Not until they at least start selling cars with 50+ kWh battery packs that can do most normal driving without needing a top up. Currently its their USP. But everntually there will be standard plceas to charge. But they may cost a few dollars a pop. Telsa's current advantage is you know when you get there you'll have the right connector to plug in.

Anemometer | 02. elokuu 2014

They didn't teach me spliing ovbiously.

Anemometer | 02. elokuu 2014

@Red Sage

Anyone with an unfulfilled order for a Model S 60 would get an 85 kWh battery pack that was software limited to 60 kWh, with Supercharging enabled.
Really... you are mad. ;-) LOL.

I don't think they would ever ever do that. It's a bit like saying BMW would sell you a car with a 2 litre engine which only has 140 bhp when it could have 177 if you upgrade the ECU. Er, hang on a minute.

But in reality, the cost of the batteries is based on the cells, they wouldn't ship you 85kW of of batteries 25kw of which are for free. They just stick 60kWh of the higher density cells in a frame made for 85 and fill the rest with foam padding. Or something like that.

Would make the car a lot lighter too!

Grinnin'.VA | 03. elokuu 2014

@Red Sage

Grinnin' Ron wrote, "I'm suggesting that there are many prospective Gen3 buyers who find paying the up-front $2000 fee a challenge; Tesla is better able to raise that capital."

You failed to address my point. What you said seems to support my point, although I disagree with some details such as your: After the Supercharger network is fully installed, Tesla can ... I expect the SC system to grow in number of sites as well as number of stalls per site for the indefinite future.

Illegal? No. Immoral? No. Inconsistent? Yes.

Just what was it that I wrote that you think is "inconsistent"? Was it just inconsistent with your thinking?

I think that Tesla Motors will make the whole thing as simple as possible for all of their Customers...

I disagree. I think they will strive to serve their customers exceptionally well, with due consideration of important differences between different types of customers.

Even if there is a Zombie Apocalypse.

What has this to do with anything I wrote?

Ron :)

Red Sage ca us | 03. elokuu 2014

Grinnin' Ron: OK, I see now... You had asked, I think, why we are all so certain that the Supercharger network would always be free... We mentioned that it had been stated many times, but you seem to have dismissed that as 'marketing'... I'm using a tablet now, but when I get to my full PC, I'll post a link to the video that is relevant to the Zombie Apocalypse comment I made. It's pretty funny, and refers to Elon's response to a query that's been quoted with glee a few times.

;-)

Brian H | 04. elokuu 2014

You mean solar panels feeding battery banks servicing SCs? I'm sure the zombies will appreciate them. >;)

Anemometer | 05. elokuu 2014

Quote me... I don't think they would ever ever do that. It's a bit like saying BMW would sell you a car with a 2 litre engine which only has 140 bhp when it could have 177 if you upgrade the ECU. Er, hang on a minute.

But in reality, the cost of the batteries is based on the cells, they wouldn't ship you 85kW of of batteries 25kw of which are for free. They just stick 60kWh of the higher density cells in a frame made for 85 and fill the rest with foam padding. Or something like that.

Would make the car a lot lighter too!
Flippn eck. Didn't realise they did that with the 40kWh model S! There's me saying never. But then that was a special case. Can't really see how it would have been cheaper ... unless they had to do crash testing on 40kWh pack cars! Hmmmn.

DTsea | 05. elokuu 2014

When you buy the car it says supercharging for the life of the car. That's what forever means.

Obviously.

Brian H | 06. elokuu 2014

Look up "The Wonderful One-Hoss Shay".

Grinnin'.VA | 06. elokuu 2014

@DTsea | AUGUST 5, 2014

"When you buy the car it says supercharging for the life of the car. That's what forever means.

"Obviously.

Yes, that's what it means.
However, no one can predict or control all of the future.

Things may change.
Tesla is free at any time to offer other options to its new customers.

Ron :)

Brian H | 06. elokuu 2014

Yeah, TM has an ongoing problem with excess demand. Why not suppress it some? <8-\

Grinnin'.VA | 06. elokuu 2014

@Brian H | AUGUST 6, 2014

"Yeah, TM has an ongoing problem with excess demand."

I believe that Elon is correct when he says that Tesla will have no problem increasing demand as their auto production increases, at least for the next few years. Do you agree? If not, please explain.

Ron :)

vgarbutt | 06. elokuu 2014

Elon musk says things, and he means them. He stated "travel forever, for free, on sunlight! These are his holy goals, and i believe he means it. I'ts not about money. It's about getting EVs mainstream.

for all intent and purpose, forever COULD only mean 40 years, and if so I can live with that. Ill be dead by then!

Of course NOTHING is forever. Eventually our sun WILL burn out.

Grinnin'.VA | 07. elokuu 2014

@vgarbutt | AUGUST 6, 2014

"Elon musk says things, and he means them. He stated "travel forever, for free, on sunlight!

"Of course NOTHING is forever. Eventually our sun WILL burn out.

So obviously, Elon got carried away with his dream. His statement is a transparent exaggeration.
Agree?

Ron :)

Brian H | 07. elokuu 2014

Ronnie-poo;
Reread, rethink. 'A problem with excess demand' is not that there's not enough of it. He has too much excess demand already.
\:-/

Homebrook | 07. elokuu 2014

Can we please get over the idea that the charging is free? Let's use "prepaid charging". It's more accurate.

Brian H | 08. elokuu 2014

Some portion of that cost is being allocated to TM's promotional budget and some even capitalized, so "prepaid" is not quite right, either. I.e., some of the cost is being 'picked up' by future sales.

Grinnin'.VA | 08. elokuu 2014

@Brian H | AUGUST 8, 2014

"Some portion of that cost is being allocated to TM's promotional budget and some even capitalized, so "prepaid" is not quite right, either. I.e., some of the cost is being 'picked up' by future sales."

According to my crystal ball, aided slightly by a bit of spreadsheet mumbo jumbo, it's likely that the SC system can be fully funded solely from the 'prepaid' fees that users provide to Tesla when they buy SC-enabled cars. (This assumes that $2000 of the price of every SC-enabled car is allocated to the SC system for capital and operating expenses.)

Caveat: Of course, if SCs are used instead of home charging by a substantial portion of the cars, the parameters in the spreadsheet would need to change, resulting in a huge 'deficit' for the SC system without counting advertising benefits, etc. to Tesla.

Ron :)

DTsea | 08. elokuu 2014

Grinnin' I agree. People who use the supercharger as their only means of charging will burden the system more than was provisioned under the 'for trips' model.

Beyond the power, the issue is how many cars a day can charge at an SC. In another thread I estimated that we currently have about 65 cars per SC bay, but use every three days during morning or evening commute time would require a bay for about every 30 cars.

Red Sage ca us | 08. elokuu 2014

On another thread I found that sales of 200,000 Model X and Model S per year could fund the energy generation for 3,000 8-stall Supercharger locations that were all in use around the clock for a tear straight... And there would still be about seven million bucks change left over. Never mind this 'burden'. It will be well borne.

DTsea | 09. elokuu 2014

Assuming the fee for model 3 us still $2000, yes. My guess is on a car that costs half as much the supercharger fee will be half too.

Red Sage ca us | 09. elokuu 2014

I'm thinking by the time the Model ≡ is released, Supercharging will have been opened, unlocked, for all Tesla owners, existing, and going forward. The 'hidden cost' for Supercharger access to the worldwide fleet will have already been largely paid by Model S and Model X sales. Any further costs would continue to be paid through those lines.