Business model of the NOT "free...forever" Tesla DC network

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Slow1 said:
Assume a 25c/kWh and that is about $833 in power. Granted this doesn't consider maintenance of the network but it does put the marginal cost somewhat into focus. So, add in $1K/car and perhaps that would cover the marginal cost of the Model3's assuming the initial network (and most ongoing support) is covered by the premium Model S/Model X sales.... I think it is quite doable.
True, but you also need to factor in growth. Unless you think Tesla has enough SuperChargers already.
Some of that money is going into the infrastructure of the SuperCharger network.
So, at least for a while, it should probably be more than $1k per car.

Even tho these things are 5 years old, we're still well in the EV early adopter phase. So there will still be a bit of a premium to help out for later. ;-)

desiv
 
desiv said:
True, but you also need to factor in growth. Unless you think Tesla has enough SuperChargers already.
Some of that money is going into the infrastructure of the SuperCharger network.
So, at least for a while, it should probably be more than $1k per car.

Even tho these things are 5 years old, we're still well in the EV early adopter phase. So there will still be a bit of a premium to help out for later. ;-)

desiv

Growth will continue, that is true.
The superchargers also serve a marketing purpose though.
How much money to dealers and auto manufacturers spend on billboards, bus stop benches, TV commercials each year?

Tesla takes that money and puts it into building superchargers.
20 superchargers cost about what a 30 second Super Bowl commercial cost.
Tesla built a few hundred superchargers last year, at $250,000 each that is about 75 million world wide.
I'm willing to bet GM and Toyota spend at least that much on advertising worldwide.
 
Slow1 said:
minispeed said:
At the current model 3 price it's hard to say forcing a $2000 option on you is a thing that will turn buyers away. I bet a good chunk of those people have bought an ultra-luxury car before and been forced to buy a package at a few grand to get one option they really want.

Well - we don't yet know what the "model 3 price" will be - only the target price. I would imagine that having a model offered without the supercharge option may allow lowering the price on that model slightly which then could allow Tesla to claim $x base price for the model.

I have to admit that if/when I get a Model3 I'd give serious consideration to passing on the unlimited supercharger option (if available). IF they offered a per-use option I'm almost certain I'd save vs paying for unlimited given my likely usage pattern.

As to how to implement with minimal overhead - I have to believe that Tesla was smart enough to put communications on the superchargers to allow identification of the vehicle and/or supercharger station; a simple "enable/disable" setting on the car could be checked as part of the charging protocol and allow those without the option to be notified and turned away or possibly asked to authorize a payment method (even better) for the session. A lot can be done in software that has extremely low cost to implement in mass.

Alternatively it may be better long term for Tesla to simply continue to include it in the price realizing that usage is likely lower than many would expect and thus their relative costs are low. Being able to make the claim of 'free access' to the 'coast to coast' network could go a long way in reducing range anxiety and removing a barrier to closing the deal with customers. Simplify the conversation quite a bit when you can say "don't worry - you can use the SC network for free and the car will warn you before you stray too far from it." Tremendous marketing value in that I'm sure. I'd like to see the numbers on what % of the miles driven in the Model S have been powered by the supercharger network...

Sorry that was a typo, I meant to say at current model S prices the people who have been in that high class market aren't as concerned with not overpaying for an option they don't want. The people who are stretching a budget to afford a model S are probably those who drive a lot of miles and want supercharging.
 
minispeed said:
Sorry that was a typo, I meant to say at current model S prices the people who have been in that high class market aren't as concerned with not overpaying for an option they don't want. The people who are stretching a budget to afford a model S are probably those who drive a lot of miles and want supercharging.

That makes sense. Now to project to the Model3 - I would expect that if anything the rate of supercharger use will be lower overall (unless someone has one very close to their daily routine). Seems to me that most of us who are driving daily life and busy would rather charge at home than go make a trip to charge... especially as the SCs are on major routes, not generally at the local grocery stores (I'm sure some are - but that isn't the primary model).

Now, get me a Model 3 with 2-300 mile range at Leaf prices, stick a super charger at my local grocery store (or some other place I frequent weekly or more often) and I may never charge at home again. Being able to get a full charge that can last a full week while buying my groceries? yeah, I could go for that. I just don't have time to make a special trip for a 30 minute refueling trip 1-2x a week - on a long trip, yup, daily driving not as likely.
 
JB Straubel, Chief Technology Officer of Tesla, has hinted that Supercharging might be free for the first Tesla owners but that a fee could be phased in after a certain number of cars:

http://www.teslamotorsclub.com/showthread.php/8590-Tesla-Supercharger-network/page625" onclick="window.open(this.href);return false;

...The typical usage is that somebody stays at one of these stations for about twenty to thirty minutes and then you'll drive another, roughly, 150 or 200 miles. The other interesting thing here is that we offer these free, to our customers. We thought about this for a long time and it turns out that the energy cost is very low; it's more about the cost of convenience of having access to the infrastructure. But a full charge, or even a 50% charge, on a Model S is less than $10. So it's really not entirely worth the hassle of trying to deal with a whole separate billing structure. In the future, of course, it will make sense to figure out how we phase in some kind of financial transaction, but it's going to take time. And for the beginning, a million cars, it is a pretty viable way to do it...[emphasis added; my transcription]
 
Would anyone in the know like to speak on how the SC business might change if other manufacturers take Tesla up on their open patents and provide SC capability? How would a Leafer use SC and where would they send their check? And what might that do to the SC ecosystem?
 
Possibly the car manufacturer would need to buy into a substantial share in the
SC network, and pay some fee for each VIN that is authorized.
Further, it might be required that Tesla be able to track each SC-enabled
vehicle, to make it difficult to spoof the SC network.
The authorized vehicles might need to charge at a fairly
fast rate, like at least QC rate, to avoid clogging the charging stalls.
But, that is just my current conjecture.
 
AndyH said:
Would anyone in the know like to speak on how the SC business might change if other manufacturers take Tesla up on their open patents and provide SC capability? How would a Leafer use SC and where would they send their check? And what might that do to the SC ecosystem?

According to what has been stated...
Other manufacturers are welcome to participate as long as they contribute towards the growth of the network proportionately to the number of vehicles they are adding.
There will be no "pay at the pump". Authorized cars can fill up simply by plugging in.

Wether this means the manufacturer charges for SC access as an option, or simply folds it into the cost of the car would be, it appears, up to the manufacturer.

Authorization is by VIN currently. I don't see that changing. It is very simple and straightforward.

I don't see any manufacturer doing this for <100 mile range cars, they simply can't take advantage of the speed available.
 
AndyH said:
Would anyone in the know like to speak on how the SC business might change if other manufacturers take Tesla up on their open patents and provide SC capability? How would a Leafer use SC and where would they send their check? And what might that do to the SC ecosystem?

I think there's a little bit of smoke and mirrors to it. Yes others can use the patents and build something that works with it and contribute to the cost. However if they want a car out to market quicker it would probably make more sense for them to source Tesla as a supplier of parts, ie battery, chargers, motors etc... and then let them pay into the SC network for cars that option with it. That way Tesla makes money even on the cars that don't option it.
 
I wonder what the real costs in dollars and CO2 emissions were per kWh delivered were last weekend at Harris Ranch, for the S drivers waiting in line to plug into the SuperDieselCharger?

http://dailykanban.com/2015/05/tesla-and-its-customers-find-its-not-easy-being-green/" onclick="window.open(this.href);return false;

Tesla Motors and its customers are famously proud of their environmentally friendly image, but their anti-carbon and anti-oil sentiments are apparently not as absolute as their public statements and vanity license plates might suggest. In the course of investigating Tesla’s Harris Ranch, CA battery swap station, Daily Kanban found that Tesla’s solution to peak demand for grid-powered Superchargers that are also on-site does not involve stationary battery storage or customer battery-swapping at its only swap station. Instead, the company relies upon backup Superchargers powered by diesel generators. Moreover, several Tesla customers were observed charging from the noisy, carbon-emitting backup generator even when the standard Supercharging station had numerous plugs available. This oddly un-green charging option, foisted on customers as a result of Tesla’s lack of desire to make its battery swap capabilities widely available, in turn raises unanswered questions about the environmental claims Tesla has made about its entire charging network.

Harris Ranch, a hotel/restaurant/truckstop destination located about halfway between Los Angeles and San Francisco on Interstate5, was one of six sites where Tesla initially introduced Superchargers in 2012. In April of 2013, the site was upgraded to its current array of six Superchargers. These Superchargers are located directly in front of the Harris Ranch restaurant, near the entrance to the site. On the far side of a sprawling gas station, in a building that once housed a car wash, is the Tesla battery swap station.

When Daily Kanban began observation of the swap station on the morning of Friday, May 22, the first real activity we noted was the delivery of a Supercharger station and a large Collicut backup generator. Over the course of the day, a Tesla employee installed the Superchargers on a plastic pallet at the exit of the battery swap station and hooked them up to the generator. This backup Supercharger setup blocked egress from the swap station, indicating that Tesla had no intention of swapping batteries over the weekend. A notice taped to each of the permanent Superchargers informed Tesla customers that the two additional Superchargers behind the swap station had been installed for “added convenience.”

By midday all standard Superchargers were in use, and as the Supercharger “lunch rush” began to build a line of six Teslas backed up into the Harris Ranch parking lot. Soon a Harris Ranch security guard drove up and told the two Teslas at the front of the line to follow him to the backup Supercharger behind the swap station where they subsequently began charging. Daily Kanban’s observations for the day ended shortly thereafter, and we were not able to fully document the demand peak or the backup Supercharger’s impact on it.

The next day, a smaller Doosan generator had replaced the large Collicut unit and another Tesla employee powered it on at about 9:00 AM. Daily Kanban observed the generator running for a cumulative ten hours over the course of the day, during which time only 8 vehicles actually charged from the attached Superchargers. But unlike the previous day, there was no evidence of Supercharger undersupply on the 23rd. Not once on the 23rd did Daily Kanban observe a lack of plug availability at the standard Supercharger station and at one point both plugs of the backup generator-powered Supercharger were in use at a time when all six standard Superchargers were available.

On the 24th, the same Doosan generator was turned on for just 90 minutes, from 11:45 AM until 1:15 PM and no vehicles were observed charging from it. Again, traffic was much lower and no plug shortage was observed at the standard Supercharger station.

On the 25th it appeared that the mid-day “lunch rush” for Supercharger plugs would not take place, but around 3:00 PM a horde of Teslas descended on Harris Ranch once again, causing lines for Superchargers that ranged from five to seven vehicles. Several Tesla drivers waiting for chargers agreed to speak with Daily Kanban, and most said that they would appreciate the ability to swap batteries rather than wait in line. Though Daily Kanban did not interview their wives and children, their exhausted faces spoke volumes about consumer demand for a more rapid alternative to hour-long waits for Supercharger access.

Tesla’s use of petroleum-fueled generators to power backup Superchargers and its customers willingness to use this carbon-emitting power source may not be completely hypocritical; the standard Harris Ranch Supercharger station does not make use of solar panels, and therefore may be nearly as carbon-intensive as a small gas or diesel generator. But it does point out how far Tesla has to go in order to live up to its initial claims about its Supercharger network...
 
This slow-motion-train wreck is beginning to remind me of all the silly posts re using "etiquette" to regulate "free" public L2 EVSES:

Tesla's Contradictory Messages: Is Supercharging Unlimited, Or Not?

At Tesla's annual shareholders' meeting earlier this month, CEO Elon Musk groused about Model S owners who aggressively use the company's Superchargers for their local driving...

Clearly, Tesla would be on thin ice legally if it tried to restrict Supercharger use retroactively.

Instead, the company seems to be trying friendly persuasion and peer pressure.

We'll see how it works.
http://www.greencarreports.com/news/1098831_teslas-contradictory-messages-is-supercharging-unlimited-or-notThe" onclick="window.open(this.href);return false; problem Tesla has created for itself, is illustrated in the quote below:

...The way Noland sees it, access to the Supercharger network was a $2,000 option for people who bought early versions of the Model S 60, so the cost of electricity is already baked in to the price of every other Model S, including his.

"Using typical Model S energy-consumption figures of 325 Wh/mile and average electric rates of 11 cents/kWh, the electricity cost of running a Model S works out to about 3.5 cents per mile," he says. "In effect, Model S owners with Supercharging capability have prepaid for 57,000 miles of Supercharged driving, on average. Of the 43,000 miles currently on my odometer, I’m guessing about 10,000 have been Supercharged. The way I see it, then, it’s cool for me to Supercharge another 47,000 miles or so, long distance or not."...
http://ecomento.com/2015/06/24/how-free-is-a-tesla-supercharger/" onclick="window.open(this.href);return false;

Tesla S owners really seem to believe that they have pre-paid for supercharger access, and use ridiculously low cost estimates rationalize their entitlement.

Does anyone believe the total to cost per kWh delivered through the supercharger network is under a dollar per kWh to date?

Does anyone believe that actual supercharger costs will ever average near ~11 cents per kWh, even when it could be more efficiently utilized, after Tesla's payment system (for future Tesla drivers) is introduced?
 
edatoakrun said:
Does anyone believe that actual supercharger costs will ever average near ~11 cents per kWh, even when it could be more efficiently utilized, after Tesla's payment system (for future Tesla drivers) is introduced?

Probably someone believes that. But then they would have to completely ignore the demand charges associated with MW levels of power (peak, with 16 stall pairs each sharing 150kW worth of chargers would be 1.2MW).

Supercharger fees are absolutely paying for convenience as well as electricity. Car Charging Group tries to use that line to justify $0.49/kWh at L2s around here. How much more is electricity worth at 135kW than at 7?
 
edatoakrun said:
Tesla S owners really seem to believe that they have pre-paid for supercharger access, and use ridiculously low cost estimates rationalize their entitlement.

Does anyone believe the total to cost per kWh delivered through the supercharger network is under a dollar per kWh to date?

Does anyone believe that actual supercharger costs will ever average near ~11 cents per kWh, even when it could be more efficiently utilized, after Tesla's payment system (for future Tesla drivers) is introduced?

Frankly I don't think that Tesla owners should have to rationalize/justify anything WRT the supercharger network. While I don't know what legally binding commitments were made during sales of the Model S, it certainly was marketed as "free supercharger use for life". Nowhere in their marketing did I see anything about limits or local use only or whatever. They bought the car with the expectation of being able to use the network and no limitations were specified - so go use it.

Telsa may want to impose limits in the future - in theory they have the tech to do so. That would be a change for future buyers, which is fine too - if that keeps you from buying a Tesla then don't buy it. Original buyers should just keep what they got and everyone go on their way happy.

Actual cost per kWh delivered for ANY public charging station is far above the cost of energy alone. Benefit of the Tesla SuperCharger network, however, is much greater than just the energy delivered to the vehicles. Marketing, image, reduction in range anxiety all have values. Up to Tesla to figure out how to best balance the cost/benefits to them and their drivers.
 
Say what you will about our CHAdeMO system, but at least no one has to wait in a big line behind a bunch of cheap jagoffs trying to score a buck's worth of free electricity on their lunch break. This is also why Tesla can never build a supercharger in the middle of a large city like Seattle, even though that's the prime location for anyone driving through the state. That thing would be absolutely useless to anyone trying to get through to Portland or Vancouver.

I always thought "free" was stupid. The car already auths, so just require a CC on the account and charge the local cost of the electricity. Then it's still free supercharger access, just not free electricity.
 
pkulak said:
Say what you will about our CHAdeMO system, but at least no one has to wait in a big line behind a bunch of cheap jagoffs trying to score a buck's worth of free electricity on their lunch break. This is also why Tesla can never build a supercharger in the middle of a large city like Seattle, even though that's the prime location for anyone driving through the state. That thing would be absolutely useless to anyone trying to get through to Portland or Vancouver...
If you look at the map you will see that they have built Supercharger stations in the middle of large cities, for example: LA, San Diego and Denver, to enable travel through them. But, in most cases, the best locations to enable long distance travel are outside the cities. In the case of very large metropolitan areas, such as LA, it is necessary to have some Superchargers inside the conglomeration of cities that make up the sprawling urban area.

Ideally it would be best to locate them near interstate routes in areas away from residential neighborhoods, although that might not always be practical. They did it with Denver: the station is near I-70 and the airport but is in a commercial area and decidedly out of the way for most residential neighborhoods. Perhaps they will do much the same thing for the station planned for the Seattle area.

Yes, someday there will be enough Teslas on the road that they will need to limit charging by locals. As has been discussed in other Tesla threads.
 
While Tesla has implied that instituting payment-per-supercharger-session can be delayed until ~the model 3 launch, it looks like that plan is turning out to have been based on over-optimistic assumptions of Tesla driver behavior.

Yesterday's WSJ:

Tesla Owners Frustrated by Recharge Waits

Complaints about long lines to top-off batteries has sparked warnings to frequent users


...Mimi Kim Jamil recently slipped into the last spot at the San Juan Capistrano (Calif.) Supercharger station where there are eight stalls and plugged in her 85 kilowatt-hour Model S. A moment later, two other Model S drivers pulled in behind.

Superchargers can recharge 80% of an 85 kilowatt-hour battery in about 30 minutes. While that’s much longer than the about five minutes needed to refuel a gasoline-powered car, it is more than 10 times faster than a typical Tesla home charger.

“I felt bad for them,” Ms. Jamil said, noting that the other seven Model S sedans were unattended, a sign that their owners may be picking up items at the nearby shopping center while their cars charged. The two drivers needing to charge “were just waiting, waiting, waiting.”

...Tesla is installing superchargers at a rate of about one new station a day around the world to keep up with sales that have reached 60,000 vehicles since it launched three years ago. The company’s pipeline includes a sport-utility vehicle launching this fall, and ambitions to sharply increase annual sales through 2020.

Sales growth could put additional strain on the Tesla Supercharger network that currently includes 453 stations and 2,519 chargers, which are capable of cutting charge times from several hours to about 40 minutes.

“Tesla sales will drop if they don’t build more supercharger stations,” said Roger Chou in San Diego, who has ordered a Model X, but has been driving his brother’s Model S. “If they want to start charging people, that is fine, but be clear about it, so people can make their decision before spending $100,000-plus on a car.”...
http://www.wsj.com/articles/tesla-owners-frustrated-by-recharge-waits-1435690694
 
While this does happen, it is the exception rather than the rule.
There are a number of solutions which include adding a cost, adding more supercharger stations, limiting access, limiting chargetime.
My guess is we will see at least two of those tactics. Adding a cost is, in my opinion, the least likely.
 
“If they want to start charging people, that is fine, but be clear about it, so people can make their decision before spending $100,000-plus on a car.”

Yeah because a $35,000 Model 3 is so a $100,000 car.

And the tons of Model S 60s that were sold at the $65,000 mark are so $100,000 cars.


OK, on another line of thought besides idiots that want to talk about how much you can pay for a new Tesla with all the options. It's nice to see the CPOs dropping near $45,000.

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="dhanson865"
“If they want to start charging people, that is fine, but be clear about it, so people can make their decision before spending $100,000-plus on a car.”
Yeah because a $35,000 Model 3 is so a $100,000 car...

And the tons of Model S 60s that were sold at the $65,000 mark are so $100,000 cars.
The Average sales price of an S was over $107k as of TSLA's last quarterly report, IIRC.

="dhanson865".... It's nice to see the CPOs dropping near $45,000.
Imagine how frequently those S buyers who have paid only ~$20-30 k for their used S's in the next few years will want to exercise their "free...forever" privileges...

How will those Tesla buyers in the future who just paid six figures for their cars feel about having to wait behind those FF legacy Teslas for their turn to pay-per-charge?
 
^^ That WSJ hit piece is hardly a reasonable look at the state of the Supercharger network. Murdoch and his cronies have been spreading FUD about Tesla from the beginning and are not credible sources of information. They pick on the one station, San Juan Capistrano, that has backups, since alleviated somewhat by the opening of additional stations, and that becomes the entire network? Rubbish.

Whether or not the network will remain free without limits when there are a million Teslas on the road remains to be seen. But, for now, the Supercharger network is functioning quite well, WSJ disinformation notwithstanding.
 
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