webb14leafs wrote:Thank you for your responsiveness John. Your business is intriguing, but the cost seems excessive. Is it possible for the cost to go down as your business scales?
Over a 5 year period, the cost of a deposit plus monthly "premiums" is equivalent to a new battery pack (24kWhr), but over that time you will certainly not have provided an equivalent number of cells. You will have likely replaced anywhere from 20% to 50% of the individual cells. Finding enough car owners who 1 - Need or desire 100% of the original capacity for the entire period they own it, and 2 - Are willing to offset their fuel cost savings with a battery "subscription" service seems unlikely.
I wish you luck, but as an avid investor in new and emerging technologies and services, I'm lost. What am I missing.
I'm wondering if you see this as just the tip of the iceberg, and you are really just getting your foot in the door of what's to come. V2G, Micro-Grids, Energy Storage...
First, I think your estimate of 20-50% of cells replaced over 5 years is a pretty wide swath, so lets split that up into manageable bits. I think 20-30% is a fair assumption based on our research, but at the same time, I also think it's fair to say over 5 years our customers will have swapped 50% of their _modules_. At any given service event we will be replacing modules within a scored range of need, some for degradation, some for other metrics. All returned modules will go through a remanufacturing/reconditioning step and some of the individual cells will find their way back into re-use in EVs. Which leads me to:
Yes, it's the tip of the proverbial iceberg for our design. and a strong market entry point. There's a definite customer need, a manufacturer that turns it's back more and more each year, and an expectation by the customer that somehow an EV is unlike any vehicle type before it and should last forever. So it makes sense for us to bring the product to a market that's ripe for a solution, prove the solution in the real world, and then expand it to other points of use. Fixed-storage is a natural second market for EV batteries already and is a market we're planning for. As for V2G, the obstacles there are more political and legal than technical, I'm not sure we'll jump into that just yet.
And yes, we anticipate the cost to drop over time, insert typical economy of scale claim here. But to answer that more specifically, our cost has 4 major components we need to address out of the gate: The logistics of physically moving battery to/from the customer (this is not inexpensive!), the cost of a service event, module manufacturing costs, and backend service costs. We're expecting our early generation to effectively be upside down on our balance sheet, however, we have a road-map for scaling and cost reduction for each of those 4 areas and believe we can get there inside of 5 years once in production. (There are some pieces here I'm being purposefully vague here, apologies, but business is business.) Our long-term target monthly rate is to get to $1/kWh/month and still have operational margin.
I have to ask, you mention being an avid investor, I assume here you mean you manage your own investment portfolio with a lean on emerging tech? Or are you what the SEC refers to as an accredited investor? (If you're the latter, shoot me an email to email@example.com
, there's more detail I can share with you.) Pardon the ask, I'm a startup founder, never miss an opportunity!
Sorry to bug you so much, but I am really interested in this service. Not so much for what it is now, but what it could be in the future.
The cost of thermal battery management exceeds the monetary value of the avoided degradation. Replacing this initial cost with a “service” cost for ALL battery powered cars would be a real value. Assuming battery costs get to ~$100/kWhr, or lower, and the average passively managed battery loses 1-2kWhr of capacity per year, this becomes an affordable, viable and scalable solution.
Tesla could stop spending $3K-$7K (depending on what you read) on their battery cooling mechanism and off-load this cost to customers who are already accustomed to paying >$100/year on routine maintenance. Topping off your battery capacity could be the equivalent of swapping out your engine coolant or transmission fluid.
We are entering a battery powered world and those batteries will need to be maintained.
Don't apologize! What we're doing is different enough from other models we know that we have to explain and answer quite a bit. (And frankly this early into the conversation this is all very helpful when we start to scale our advertising dollar the message has to be much more clear than you see today.)
And yes, I think I addressed the cost reduction component in the answer just above this one. And you hit the nail on the hear about maintenance. A huge drive for me personally is for years I have been my own mechanic, and sure it helps I went to an automotive engineering school, but I believe cars need to be serviceable long after the manufacturer's warranty and support end. I have purchased many high mile cars over the years, for pennies on the dollar, and had great experiences with them and extended their lives sometimes more than decades. The way EVs are being built right now their batteries are anything but serviceable. Just removing them often takes more hardware than the average DIY mechanic has. Now for us, as a startup, to wave our hands wildly and try to get Tesla, Nissan, VW, or any other major manufacturer to stop and listen to us is largely an exercise in futility. However, if we demonstrate this serviceability in a very popular EV, we'll get their attention.
Of course, we believe that our solution is better than theirs, we're supposed to. But to anyone else, we have to prove it. I have spent the last 4 years hunting for a product model, interviewing customers, proposing various solutions and price points, and looking to see where customers respond the strongest to find a market entry point with the highest chance of success. We settled on this Leaf solution last winter and had planned on announcing next spring, but frankly, Nissan is darn near daring us to come to market faster. So we're going to try to.
I'm also interested in the fact that so many of the EV owners that I talk to actually think they will be keeping their cars indefinitely, something I don't hear very often from other groups. That's not a jab at anyone, but given the kind of money we are talking about (in addition to mechanical issues obviously), it would just seem that trying to do this in the long run is going to cost more money than it's worth to keep the cars. If a lease option was available up front at the time of purchase (similar to what Renault offers on the Zoe), I think it would make much more sense. But again, seeing as how I may be picking up a Leaf this weekend, I am interested in seeing 3rd party companies stepping up to help out the EV community if the OEM abandons customers.
I think EV owners recognize that aside from the battery, so very little else in the car fails. Various heaters and electronics notwithstanding, most of the traditional wear components in an ICE are simply non-existant, and the mundane ones that are, like brake pads, wear much more slowly. I think it's reasonable for them to assume that if the battery can be fixed, the car should last a few hundred thousand miles. But, I'm a bit biased here, I agree with them and want to make that happen. Consider this: Every year a vehicle is on the road longer used to mean there was the potential for more and worse emissions as the car aged. With EVs, every year it's on the road longer, is one less new car purchase (with its energy and environmental cost of manufacturing) and really the "tailpipe emissions" of a 1,000 mile EV and a 200,000 mile EV are (nearly) identical. Another personal motivator of mine: I want to help get the EV aftermarket/3rd party manufacturer party started, there's not enough going on in this space yet. This is why we're also developing a kit for converting 5th generation Corvettes to EV, building a complete kit that can be installed by the average garage mechanic is to demonstrate to the aftermarket world that things could be better than they are today.
I think it's more from a peace of mind perspective and it also reduces the initial purchase price of the vehicle. So for example, that $30K Leaf S is now $21,500 without you actually buying the pack and then you make a lease payment for the pack, etc. When/if the pack goes bad, you take it back to the dealer and have it swapped out no questions asked. That way you are not on the hook for an $8500 replacement battery, etc. I guess it just depends on what each individual purchaser wants to do you know?
YES! To outline that scenario further, your hypothetical $21,500 LEAF doesn't come with a battery and is now less expensive than ICE competitors. At the time of purchase, there's no "install fee" like we're currently including in the Leaf product we're offering, but instead, the car is designed to accept modules. You tell the dealer what kWh capacity you're looking for, 24, 30, 40, whatever, they put modules in, and you drive away. Now, when there's an issue with your battery, perhaps one module needs to be replaced, and 2 more are indicating they might need to be in the future, you go to your service center, they swap 3 modules, and you're on your way. But again, we need to get the attention of the manufacturers, so we're starting with aftermarket first.
I think that the main problem is that the EV companies need to have an "open sourced" battery design so that owners can have the batteries replaced as a maintenance item. Not have batteries with computers and serial numbers that must be married to the car only by Nissan.
Most battery powered appliances (except Apple) allow people to replace the batteries easily. We need to lobby to have this made into the designs of new cars... Its like saying that Nissan cars can only run on Nissan gasoline available ONLY at Nissan dealers... Ridiculous..
Yes, and no. I've worked in tech for a very long time, and to get businesses to agree on an interoperable standard is a very tall order. You're quite right about the open source component, open standards do much better than closed standards, but when you go too open, you also slow down development and risk fracturing standards. That said, we're working towards nearly what you're describing. Much of our development has been seeking ways to make interoperability work. There are some more details here I wish I could expand on, but we're not quite ready to share them yet. And I say "no" here because I disagree about the serial numbers and computers piece, quite the opposite, in much the same way that your cell phone is effectively a computer, has multiple unique identifying numbers yet still can interoperate across multiple carriers, batteries will need this too. (Hint: I spent nearly 2 decades building next-generation wireless networks.)
I HATE monthly subscriptions. It is the noose around the first world's citizens, which will ultimately make us all merely compliant ignorant masses. I want to OWN my car, whatever it is, and I DECIDE what I buy, how much, and when I decide to spend on it. Would you go along for buying a car and LEASING the engine? Of course not..
The irony here is I too loathe the micro-payment world we live in. But you're looking at leasing the wrong part of the car in your argument. Let me explain, in an ICE how much do you OWN the gasoline? Do you own the gasoline you already burned? Of course not. You just leased the gasoline long enough to convert it's stored energy into moving energy. We view battery the same way. Batteries are the storage method and have no less business being a car part than gasoline does. So we're de-coupling that from the car. Now I know this model won't attract everyone, yet, so you're not going to hear me tell you "you're wrong" here. For the last 20 years every car I've bought has been past warrant, cash, and serviced only by me. I really do get it. But for many, this solution will make sense. For example one of my best friends, who I convinced to lease a leaf 6 years ago and is now on his 2nd lease said to me "I'm tired of cars that are needy, I just want to subscribe to a car, have it in my garage, drive it only where I want to go and that's it." He's exactly the opposite of you and me, and he's closer to what our customers are.
At least, with this option, you don't end up replacing a crappy Nissan designed battery pack with an equally crappy battery pack. If this Fenix Power pack has liquid cooling, TMS, and a modular design (which is their intention), then that should be far better than the original LEAF packs.
I'm just simply going to say "thank you!" to that.