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40 kWh battery will not be produced. It's official

40 kWh battery will not be produced. It's official

Tesla just announced :

Also being announced today is that the small battery option for the Model S will not enter production, due to lack of demand. Only four percent of customers chose the 40 kWh battery pack, which is not enough to justify production of that version. Customers are voting with their wallet that they want a car that gives them the freedom to travel long distances when needed.

The customers who ordered this option will instead receive the 60 kWh pack, but range will be software limited to 40 kWh. It will still have the improved acceleration and top speed of the bigger pack, so will be a better product than originally ordered, and can be upgraded to the range of the 60 kWh upon request by the original or a future owner.

vincent1001 | 31 marzo 2013
mpottinger | 31 marzo 2013

And all 60kw cars have the supercharger on board!

JoeFee | 31 marzo 2013
Noah.S | 31 marzo 2013

I always thought it was a marketing thing, or a DOE loan requirement. That way, the news stories could always say 'starting at $49,000' even though no one really chose it.

shop | 31 marzo 2013

The press release wasn't completely clear. Will the 40Kwh version still be available for order going forward, or will they build the ones they have reservations for and let it go at that?

danielccc | 31 marzo 2013

Seems a little odd. For one thing, the early adopter buyer mix is not the same as the mix of buyers one can expect one year from now.

For another, they never offered the 40 kWh model in Europe, where it would have made more sense (and possibly been more popular), since distances are so much shorter and the car is more expensive.

I think the key here is not production, it's average selling price. I guess the Model S cannot be a $50K car after all.

Brian H | 1 aprile 2013

OMG. The Easter Egg announcement that all 60 kWh cars actually have, and all future cars will have, SC hardware! I assume that also includes the software-limited 40 kWh. version. What about the $2K activation? Is that still an option or ...???

4% is about 1,000 of the 22K orders so far. They will get a 60 kWh performance level, and be able to add the extra 20 kWh for a charge now or later or never.

Never a dull moment.

Docrob | 1 aprile 2013

Brian, the announcement only ever discuss the 40kwh option in past tense "The customers who ordered this option will instead receive the 60 kWh pack"
I am fairly certain that they will honour orders for the small number of 40s ordered so far with software limited 60s but offer no further 40ksh orders.

Andre-nl | 1 aprile 2013

A new form of chip tuning will be invented. How to access those hidden 20 kWh on your Model S?

Docrob | 1 aprile 2013

I think jail breaking will not be an issue, Tesla will simply refuse all service, updates, supercharging and warranty claims on a car with any evidence of jail breaking, having an unsupported iPhone or Xbox is one thing, risking a $60,000 vehicle is rather different.

Kal-el | 1 aprile 2013

I think is a april fools day posting, just like google nose beta. they have not updated the design studio. I'm one of the 40kWh order and would love for this to be real simply because I will have 40kWh available for decades to come, not to mention the performance increase. but I would not get my hopes up today (tomorrow if this announcement is still valid I will be jumping on the couch)

Carefree | 1 aprile 2013

The timing is indeed strange but it would be one of the crudest April Fool's jokes ever. Tesla must know that all the 40kwh holders are on edge anyway. To play such a joke on them would be foolish - pun intended.

Longhorn92 | 1 aprile 2013

They sent out an official email as well, so it is legit.

defmonk | 1 aprile 2013

And Forbes picked it up, noting that the release was dated March 31 to avoid any suggestion that it was an April Fools' joke.

Logical_Thinker | 1 aprile 2013

This makes the Tesla "40 kwh" battery one of the best if used regularly for ~100 mile distance travel, because it will have a guaranteed battery longevity buffer of 30%.

In other words, when you hit " zero" you still have not drained the battery fully. This buffer will prolong battery longevity. Definitely desirable.

Conversely, it's basically irrelevant for most drivers who won't be regularly fully draining their batteries. By their normal usage they will be retaining a very large buffer.

dortor | 1 aprile 2013

@Logical - I'm not quite sure what you mean by "buffer" - would seem to me they would software limit the battery from being fully charged…

if by buffer you mean that the battery will never be fully charged and therefore you don't have the problem of battery degradation due to full charge all the time then I agree with you…

scole04 | 1 aprile 2013

Mhmm. Do I sense a 2k refund for those of us 60 owners who paid up to get Supercharging. (Fingers crossed)

elguapo | 1 aprile 2013

No, because the $2,000 means your SC is active. I think people will still have to pay $2,000 (or some price) to software activate SC.

Xfrank | 1 aprile 2013

I think this is the great news for tomorrow. that this limited 60kw version will be also available in Europe, just in time, before the production versions should have to finalize. :-)
This would boost the sales of Europe. the 40kw version is more obvious for Europe than in America.

dortor | 1 aprile 2013

what Tesla announced today is quite simple (and a good idea IMHO):

a) 40 khw reservation holders will receive a 60 kWh battery, software limited to 40 kWh of capacity - pay $10,000 (the current price difference) and they will remove the software restrictions and you'll have a 60 kWh battery.
b) all 60 kWh cars have Supercharger hardware built in - it is enabled/disabled in software. Pay $2000 and they will remove the software restriction (again the cost of the Super Charger option.

from a supply chain, logistics, simplification point of view this is an excellent announcement for Tesla as a business, and I don't think it's too bad as a customer.

being able to "add" battery capacity in the future (original owner, or 2nd or 3rd owner) and enabling Super Charging in the entire product line (there is no not a single Model S without SC hardware) make the car more desirable, marketable, and less confusing in the market place (attempting to explain to my family the differences in the 40, 60, 60 w/SC, 85, 85 Perf was just too confusing…simple product lines/features sell things if the overall product is desirable - when I see a complex product configuration matrix I see a complex sales environment, not conducive to easy sales story.

there is now the following products

40 kwh model - software limited - limited production run (existing reservation holders)
software upgradable to 60 kwh for a fee
------------
60 kwh model w/SC Hardware - SC enable/disable in software for a fee
85 kwh model w/SC Hardware - enabled by default
P85 kwh model w/SC Hardware - enabled by default

rebeccap88 | 1 aprile 2013

What kind of badge do you think they will put on these 40's?

Jolinar | 1 aprile 2013

Yea, I am sure that $2,000 will be still needed to _activate_ SuperCharging.

However, there is one question: Will that "new" 40kWh cars support SuperCharging (will it be able to activate it) now when 60kWh battery will be used as base platform?

Logical_Thinker | 1 aprile 2013

I don't think the 40kwh option is going away. I think it is going to be available going forward, and will simply be a full 60kwh, supercharger-ready Model S, but software- limited to 40kwh, not supercharger-capable. The option will be available for the price difference.

Guys: think about this... Tesla is brilliant: 1) they have simplified production greatly. 2) They have heavily incentivized purchase of a Model S for those who were on the fence about possible purchase of a 40kwh vs some other car.

BRILLIANT.

Logical_Thinker | 1 aprile 2013

Furthermore, let's say you really want a Model S, and you drive a LOT daily, so that with your regular driving you can just make do with 120 - 140 miles range, but after 10 years or so the battery degradation is making the daily drive really tight: well you can unlock more range. SWEET.

This announcement makes the 40kwh actually a great car, not some borderline- acceptable EV.

Longhorn92 | 1 aprile 2013

@rebeccap88: I was thinking that the badging will be "60-"

citroNord | 1 aprile 2013

Makes me wonder... Would the 60kW battery be a software downgrade of the 85kW? Nah... April fool's again! :)

noel.smyth | 1 aprile 2013

WOW, this makes the 40KW model a true bargain. that battery will never get near the full charge and should last very long with its intended range.

mrspaghetti | 1 aprile 2013

@dortor

I think what Logical is getting at is that you could set your software-limited 60kwh Model S to charge at Max Range rather than Standard on a regular basis and not worry that you're degrading the battery. It is indeed a good deal for those who are getting it.

According to the article I just read it's only retroactive though, no future 40kwh orders will be taken. (Though the article could certainly be wrong)

http://www.usatoday.com/story/money/cars/2013/04/01/tesla-motors-model-s...

Logical_Thinker | 1 aprile 2013

@noel.Smyth, yes, except it is not really of any practical significance for the average user, who will only regularly be using a small fraction of their car's battery capacity anyway.

However, for 40 kwh purchasers who would have been regularly maxing out their car's battery pack, this is indeed good news.

Logical_Thinker | 1 aprile 2013

I hope USA Today is wrong re: no more 40 kwh orders. Well it appears that right NOW you can still reserve a 40kwh on this website... So if you are in the fence, click away and order right now because Tesla will have to honor your reservation.....

fluxemag | 1 aprile 2013

This is awesome! Most certainly not an April Fools joke.

ramtaz | 1 aprile 2013

Tesla stock jumped $6.64 or more than 17%, to $44.53 on the news early Monday.

But customers who want to try to jump on the bandwagon to own one of the chic electric cars on the cheap may be in for a disappointment.

The electric car maker has announced that it's not going to offer its cheapest version of the Model S sedan, the starter model

EvRevo | 1 aprile 2013

Just spoke to Tesla.

Cost to upgraded from
* 40kw to 60kw down the road will be $11k
* Cost to upgrade to supercharger down the road will be $2.5k, however you need to have a 60kw to upgrade.

Total cost of upgrading from 40kw to 60kw with supercharing will be $13.5k vs $12k if you order out right

Logical_Thinker | 1 aprile 2013

Any official statement that the 40kwh is called to the few orders that have already been placed? Link?

Logical_Thinker | 1 aprile 2013

*capped ( not called)

fluxemag | 1 aprile 2013

Whoa, that cost to upgrade is steep. Especially considering the battery replacement option cost.

Logical_Thinker | 1 aprile 2013

I'd counter it's not really too steep, considering that the battery pre purchase option is heavily discounted ( likely based on a projection of continued lowering of battery costs per kwh over the next ten years.) The current price to replace the battery is much much higher than the pre-purchase option.

Additionally, in ten years of the cost to replace the battery has significantly dropped, Tesla will almost certainly drop the upgrade cost to reflect the then- current market, because Tesla is not in the business to create waste (e.g. by encouraging unnecessary battery replacement).

Logical_Thinker | 1 aprile 2013

aagh. if, not of. ( Swype, I love and hate you...)

wraithnot | 1 aprile 2013

@Logical_Thinker

"yes, except it is not really of any practical significance for the average user, who will only regularly be using a small fraction of their car's battery capacity anyway."

For the past three weekends, I've taken trips in my Model S that would not have been possible with a 40 kWh pack. One of the three trips would not have been possible with a 60 kWh pack (at least driving fast enough to keep up with the flow of traffic). Maybe I'm an atypical user, but at least for me the 85 kWh battery is the size needed to make my Model S work for most of my needs (but we'll still take my wife's Acura when we venture too far from the nearest supercharger).

DouglasR | 1 aprile 2013

There may still be time for an existing reservation holder to configure a car for 40 kWh, but I suspect that a software-limited 60 kWh battery will not be offered in the future. Too many people would select that option if they knew they could always upgrade later, many more than the 4% who currently select the base model IMHO. By eliminating the 40 kWh car altogether (even the software-limited 60 kWh), TM may lose a few buyers at the bottom end, but will simplify production and marketing, and increase revenues overall.

rebeccap88 | 1 aprile 2013

@Longhorn92 How about "40+"? I'm a glass half full kind of gal.
Jokes aside, it makes sense to mark them 60 because they'll be carrying the 60 batt packs.

vincent1001 | 1 aprile 2013

Tesla just announced cost for upgrading from 40 kWh to 60 kWh. It's $11,000 to remove that limited software and $2,500 to activate SC. Total is $1,500 more if you do it in the future instead of now

larryh | 1 aprile 2013

It would make little sense for Tesla to continue the 40 limited 60 since the battery probably costs them close to the 10k they are charing us.

The reason for the limitation to 40 is to keep the existing 60 buyers from screaming and to have the possibility of more revenue from the update.

jkirkebo | 1 aprile 2013

The 60kWh to 85kWh upcharge is only $8k. The 60kWh battery has ~2000 cells less (5000 vs. 7000) so that is $4 per cell. They are probably making a healthy profit for each one, so my guess is they pay around $2 per cell.

A hypothetical 40kWh battery with the same cells would have around 3300 cells, or 1700 less than the 60kWh battery. Thus the cost would be $3400 less. Since they were going to use one generation older cells, the cost differential would probably have been somewhat larger, on the order of $4-5000 would be my guess.

So if 50% of the 40kWh owners upgrade in a few years, they will probably break even or profit slighly. This is not counting R&D saved from not designing and building the 40kWh pack.

alfafoxtrot1 | 1 aprile 2013

I have a 60kwh car. I'd really have no problem with TM just giving all 40 kwh buyers a 60kwh car without any limitations, provided this was limited to those that reserved on or before 3/31. We can understand this as part of the growing process. The whole software limitation thing is just annoying. Still, since TM has already announced this contrivance, I'd offer the 40kwh res. holders the option to get a full 60kwh car for $5K additional.

jeffaa | 1 aprile 2013

@alfafoxtrot1

There would be shitstorms. Just last week I changed my reservation from 40kwh to 60kwh for the full $10k.

lazyav8tr | 1 aprile 2013

Just finalized a 40kw car today, so we'll see if they honor the order. If they won't I'll have a choice of getting my deposit back or upgrading to 60kw or 85kw.

Should be interesting :-)

Longhorn92 | 1 aprile 2013

@alfafoxtrot1: as a 40 kWh reservation holder, I really appreciate your selfless overture; however, that really would be unfair to the existing 60 kWh owners, especially those who upgraded from 40 kWh batteries recently (see @jeffaa's comment above). I think Tesla would need to reimburse all previous 40 kWh reservation holders who recently upgraded to 60 kWh cars, which probably doesn't make financial sense, especially if Tesla is taking a loss on the 40 kWh cars. Plus, all 60's would have a right to be upset.

Tesla really seems to be going about this the right way (which I haven't said much recently).

brdunton | 1 aprile 2013

I think this sets up for a major Super Charger announcement tomorrow. Entire US roll out by EOY '13, all of North America and key Europe markets by mid '14. The fact that every Model S delivered will be SC capable, makes getting the roll out done sooner that much bigger! Removing the range anxiety and being able to get in the consumers ear now when gas price is a hot topic is huge, and IMO result in the current 20% pop in stock value as only the beginning.

Go TESLA!

mrspaghetti | 1 aprile 2013

@Longhorn92: +1

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