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

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edatoakrun said:
There is plenty of wiggle room in Musk's statement to add more restrictions to an "(limited) unlimited" charge option "package" for the 3, making it far less comprehensive than the current "(not) free (not)forever" program payment embedded in the price of every S and X sold.
OK, I think I understand what you're saying now. They'll call it "free for life", but it'll have additional limitations compared to what's currently being offered.
 
Sounds like TSLA is getting ready to announce the end of "free" DC charging, after selling only a small fraction of the ~million BEVs that JB Straubel, Chief Technology Officer, Tesla Motors, suggested it could last year.

However, I'm very skeptical of the suggestion below that TSLA will ever allow anyone to use its chargers, without first buying a Tesla, or at least paying a huge initiation fee to join the country club:

Tesla to introduce new ‘Supercharger Credit’ system to reduce entry price of Model S & X

Earlier this week, Tesla updated its website with a payment option to buy ‘Supercharger credits’ hidden in the source code of the ‘MyTesla’ page of Model S and X owners, and even Model 3 reservation holders.

Tesla quickly reverted the update and refused to comment on the temporary change despite several requests from Electrek. Now sources with knowledge of the new program confirmed new details about its upcoming rollout…

Sources familiar with the program have told Electrek that Tesla is about to introduce a new Supercharger Credit program to unbundle the cost of Supercharger access from the vehicle and consequently, lower the entry price of the Model S and X while ensuring that the value of the Supercharger network is better represented by the pricing model...

The move to ‘Supercharger Credits’ could also facilitate the access to the network to electric vehicles from other manufacturers. Tesla CEO Elon Musk always said that he was open to sharing the network with other automakers, but he also said that they would need to contribute to the cost of the network proportionally to the usage of their vehicle fleet.

This new program will allow them to do just that fairly easily. Tesla could sell a Chademo/SAE DC adapter that would work with other vehicles and could be tied to a credit card as well. This could be a huge market for Tesla who is already years in front of the competition in terms of charging...
https://electrek.co/2016/09/02/tesla-supercharger-credit-system-reduce-entry-price-model-s-x/

edatoakrun said:
(6/3/16)

Tesla has always understood that it will have to have pay-per-use for charge stations, that "free...forever" charging was a marketing gimmick, and that would only be available for a limited number of buyers.

Where TSLA was delusional, IMO, was in it's contention that electricity would remain cheap, and it could afford to subsidize "free...forever" charging until it sold ~ a million BEVs, both of which you can hear about at ~13 minute into this Video of JB Straubel, Chief Technology Officer, Tesla Motors:

https://www.youtube.com/watch?v=HnQs1k_0Yys

Tesla never understood the reality of time-of-use Home charge pricing For BEV drivers, which will probably be almost all BEV drivers, within a few years.

I am on PG&E E6 smart rate, as I expect are quite a few Northern California Tesla owners.

We will be paying over $.90 per kWh this afternoon, from 2 until 7 PM, or close to $100 for a full charge for a tesla owner.

"Free" public charging would be a congestion disaster during peak demand periods, once more BEV driver's rates are rationalized for actual costs per kWh, and even more so if Tesla is unable to maintain its current prohibition on its BEVs vehicle-to-grid use.

Which is why I doubt that Tesla will ever offer "free...forever" charging for the 3, at any price.

Yes, TSLA could impose any level of complexity to regulations on public chargers to limit their use.

But the reality is, no method of rationing is as efficient as market pricing.

Something Tesla definitely seems to understand, when pricing its vehicles...
 
Selected comments, below about the wonders of restricted use free superchargers.

And why we all should expect to be Tesla'd, sooner or later, at public CHAdeMO sites:

If you think this is bad, wait until the Model 3s start hitting the road. I really hope Tesla has a solution to this problem before it becomes one.
It already is a problem in california. Any sort of weekend holiday results in wait lines at superchargers, and the wait is in hours.
We need a paid alternative, so the supply and demand economics can give us the chargers we need. Right now we central planning.
Its called Chademo
...I take my ICE when I drive to the Bay Area because I can't do the round trip without charging, but Fremont, MtView, Dublin have become virtually unusable.
https://www.reddit.com/r/teslamotors/comments/57eaml/line_at_mountain_view_tesla/?st=iucx913k&sh=b16c9165
 
edatoakrun said:
Selected comments, below about the wonders of restricted use free superchargers.

And why we all should expect to be Tesla'd, sooner or later, at public CHAdeMO sites:

If you think this is bad, wait until the Model 3s start hitting the road. I really hope Tesla has a solution to this problem before it becomes one.
It already is a problem in california. Any sort of weekend holiday results in wait lines at superchargers, and the wait is in hours.
We need a paid alternative, so the supply and demand economics can give us the chargers we need. Right now we central planning.
Its called Chademo
...I take my ICE when I drive to the Bay Area because I can't do the round trip without charging, but Fremont, MtView, Dublin have become virtually unusable.
https://www.reddit.com/r/teslamotors/comments/57eaml/line_at_mountain_view_tesla/?st=iucx913k&sh=b16c9165
Good thing Tesla's building more SCs along I-5 in the San Joaquin Valley (Santa Nella's currently under construction, and it's expected they'll probably add Kettleman City and/or Lost Hills to Harris Ranch, Buttonwillow, Bakersfield-Stockdale, and Lebec), because they'll need them. Fremont #2's 20 SC stalls have been sitting dormant all year, waiting for the interior of the building to be completed. Santa Nella will help reduce the load on Gilroy, Dublin and Fremont, and maybe Manteca (When I drove by coming back from Yosemite on a Sunday afternoon in August all 8 slots were full, with cars waiting). They still need to thicken up I-5 north of Sacramento, if for no other reason to shorten the Manteca-Corning leg. and they really need to put limits on local SC use for the cheap at heart, i.e. only those who can't charge at home or work get unlimited use. Still, Tesla's had to build 10 SC sites around Beijing, and Hong Kong and Shanghai are similarly supplied, so urban areas with lots of condos/apartment dwellers here may well need the same provisions.
 
I hope that you understand that clogged SC's is pretty much a California-only problem. I just traveled 3600 miles up and down the East Coast in the past 2.5 weeks in my 70D, never saw more than 2 other Teslas charging at any SC, never had to wait or share power with another Tesla, and never had another Tesla waiting for me to finish. I probably visited 20 or more SC's in 9 or 10 states, and never had an issue. EV adoption in CA is WAY above the US average, so I don't think anecdotal stories about crowding at SC's or TOU pricing in CA have much relevance to most buyers.
 
keydiver said:
I hope that you understand that clogged SC's is pretty much a California-only problem...
Yes, long waits for "free...forever" superchargers is now a problem, and will only be a problem in the future, in regions where Tesla actually sells a significant number of cars.

Where it will inevitably fail to deliver reliable charging.

As to costs, "free...forever" is already a failure, at every supercharger site.

Some of the highest-cost kWh anywhere in the world are those delivered at supercharger sites in regions Tesla sells few cars, but has, for promotional regions, placed propriety charge sites.
 
solution: just don't buy a Tesla.

there. sorted. now you don't have to worry about this.

The rest of us are quite a bit less worried when we do go Tesla, since it is many times better than having broken/inop Chademos, with ONE connector per location. THAT is a bigger worry.
 
keydiver said:
I hope that you understand that clogged SC's is pretty much a California-only problem. I just traveled 3600 miles up and down the East Coast in the past 2.5 weeks in my 70D, never saw more than 2 other Teslas charging at any SC, never had to wait or share power with another Tesla, and never had another Tesla waiting for me to finish. I probably visited 20 or more SC's in 9 or 10 states, and never had an issue. EV adoption in CA is WAY above the US average, so I don't think anecdotal stories about crowding at SC's or TOU pricing in CA have much relevance to most buyers.
While true now, once the Model 3 arrives this may no longer be an 'only in California' problem. Even if California takes 50% of them, that still leaves maybe 100k+ for the rest of the country if all the reservations in the U.S. are taken up. Even 50k would impact major routes like I-95. Many of them won't opt for the 'all-you-can-eat' package; whether that will be enough to avoid the problem, especially on holiday weekends, remains to be seen. This thread on tmc tracks the ratio between SC stalls and cars quarterly by country: https://teslamotorsclub.com/tmc/threads/tesla-supercharger-stats.75640/

At the end of Q3, while the U.S. as a whole had 45.2 cars per SC stall, in California the ratio was 100.3.
 
GRA said:
While true now, once the Model 3 arrives this may no longer be an 'only in California' problem. ...
That is certainly a possiblitly it is also a possibility that it won't be. Or even that it isn't a problem in CA at that time either.

The challenge is building enough superchargers to support the region they are in.
Even in CA, the overcrowding is not state wide.

Can they build enough? I don't know.

But years ago, many around here were convinced Tesla would never survive to release the Model S, that the X would never see the light of day, that SC would bankrupt the company and many other doom and gloom.

Rather than rooting against Tesla, I'm enjoying their product, and cautiously optimistic that they can do what they say.
GRA, I know you aren't one of those, but they know who they are :)
 
I thought the idea was free for long distance travel. I do wonder how many spots are filled with locals. I would be all for Tesla adding a fee for locals living within 100 miles of the station. I could also see a fee for occupying a spot for over 60 or 90 minutes. The model will eventually require this even if the first owners remain exempt.

The business model is to reach critical mass or self sustaining business asap.... before the money runs out.
 
Zythryn said:
Even in CA, the overcrowding is not state wide.
A bit over a week ago, while returning from the San Diego area, we charged our new-to-us Model S for 27 minutes at the Temecula Superchargers. There are ten stalls, and yet ours was the only car present. (Even with our older "A" battery pack, we picked up 112 miles of EPA-rated range during that time and made it back to our mountain home with a very comfortable margin.)

We've also stopped by the Lone Pine SCs along US 395 a couple of times (prior to acquiring our Model S) and both times found them completely empty.

For those of us in California whose idea of "long distance travel" is something other than driving I-5 between LA/OC and SF or SD, or within one of the big metro areas, it appears that the SC network has plenty of capacity. The Barstow SCs (between LA/OC and Vegas) also see a lot of use, but this only seems to be an issue during peak weekend times.

This isn't to say that Tesla doesn't need to work hard to increase SC capacity along heavy-use corridors. They really need to prioritize this. But for those of us who like to take trips away from the big cities, the appeal of the SC network is greater than ever.
 
abasile said:
Zythryn said:
Even in CA, the overcrowding is not state wide.
...For those of us in California whose idea of "long distance travel" is something other than driving I-5 between LA/OC and SF or SD, or within one of the big metro areas, it appears that the SC network has plenty of capacity...
Yes, most of the "free...forever" SCs are currently under-utilized.

I have passed the Corning CA site ~ a dozen times (on about half of those trips stopping for hours of AC charging right across the street) and (IIRC) have only seen a total of two Teslas at the site, in all those trips.

This is likely not only because most Tesla owners rarely make long trips up I-5 by car, but because when they do, many choose to drive their ICEVs in preference to their Teslas.

The overcrowding problem, however, will both increase and shift outward, as Tesla's depreciate and pass into the hands of second and third owners at ever-depreciating prices.

Those who paid ~$50,000 (used) for their Teslas will tend to find "free...forever" charging more appealing than those who originally paid ~$100,000 for the same car.

In the near future, when you can pick up a used Tesla for ~$25,000, the option of avoiding another $20 to $40 dollars on your home electricity bill per each charge, by using nearby "free...forever" sites, will probably seem like a very good idea...
 
Are you serious? Tesla drivers prefer their ICE when traveling I-5? Okay, I can make things up too.

That really made my day, though. Thanks for the laugh.

Please continue.
 
finman100 said:
Are you serious? Tesla drivers prefer their ICE when traveling I-5? Okay, I can make things up too.

That really made my day, though. Thanks for the laugh.

Please continue.

I got a chuckle over that comment as well.
 
finman100 said:
Are you serious? Tesla drivers prefer their ICE when traveling I-5?...
I'm, sure there are many more reasons, but just to list a few:

I expect many Tesla owners also own larger and/or more luxurious ICEVs that they might prefer to drive.

If you are in a hurry, even a ~$15,000 ICEV is superior to a ~$150,000 Tesla on a long freeway trip.

If you are towing, a Tesla is useless.

And, back on-topic:

...I take my ICE when I drive to the Bay Area because I can't do the round trip without charging, but Fremont, MtView, Dublin have become virtually unusable.

https://www.reddit.com/r/teslamotors/comments/57eaml/line_at_mountain_view_tesla/?st=iucx913k&sh=b16c9165
 
edatoakrun said:
The overcrowding problem, however, will both increase and shift outward, as Tesla's depreciate and pass into the hands of second and third owners at ever-depreciating prices.

Those who paid ~$50,000 (used) for their Teslas will tend to find "free...forever" charging more appealing than those who originally paid ~$100,000 for the same car.

In the near future, when you can pick up a used Tesla for ~$25,000, the option of avoiding another $20 to $40 dollars on your home electricity bill per each charge, by using nearby "free...forever" sites, will probably seem like a very good idea...
Maybe, but if the number of Model S/X cars on the road is dwarfed by the Model 3 as hoped for, then this will be a comparatively minor problem. Regardless of the types of SC payment models chosen for the Model 3, of course, Tesla will need to redouble its efforts to expand the capacity of the SC network.

In our case, having paid less than half the original, pre-incentive price for our Model S (not at all surprising at almost four years old and 73K miles), it's still very much the growing extent of the SC network, vice the fact that it's "free", that we find so appealing. I mean, we can drive on SCs right up to the gate of Yellowstone National Park, for crying out loud!
 
abasile said:
In our case, having paid less than half the original, pre-incentive price for our Model S (not at all surprising at almost four years old and 73K miles), it's still very much the growing extent of the SC network, vice the fact that it's "free", that we find so appealing. I mean, we can drive on SCs right up to the gate of Yellowstone National Park, for crying out loud!
OT, FYI Jackson, Wyoming opened yesterday. Groveland is moving along too, although I'd think you're more likely to come up the east side on 395. Oh, and congrats on the S!
 
GRA said:
OT, FYI Jackson, Wyoming opened yesterday. Groveland is moving along too, although I'd think you're more likely to come up the east side on 395. Oh, and congrats on the S!
It's still great to have options. And thanks!
 
abasile said:
edatoakrun said:
The overcrowding problem, however, will both increase and shift outward, as Tesla's depreciate and pass into the hands of second and third owners at ever-depreciating prices.

Those who paid ~$50,000 (used) for their Teslas will tend to find "free...forever" charging more appealing than those who originally paid ~$100,000 for the same car.

In the near future, when you can pick up a used Tesla for ~$25,000, the option of avoiding another $20 to $40 dollars on your home electricity bill per each charge, by using nearby "free...forever" sites, will probably seem like a very good idea...
Maybe, but if the number of Model S/X cars on the road is dwarfed by the Model 3 as hoped for, then this will be a comparatively minor problem.

...it's still very much the growing extent of the SC network, vice the fact that it's "free", that we find so appealing...
From its inception, "free...forever" has been structured as a pyramid scheme.

Yes, if Tesla is able to sell large numbers of BEVs in the future to owners who are willing to make large payments for access to the sites, then the losses it has taken and will continue to take, on drivers like yourself, may be manageable.

Success will depend to a large extent on how soon Tesla ends "free...forever" to new buyers, as every BEV it sells with "free...forever" is an additional future liability.

As I have said previously, I think Tesla's plan to allow the first ~million Tesla buyers "free...forever" is unsustainable, as it is unlikely to ever sell enough BEVs and also convince the buyers to pay enough for charge site access in the future, to support so top-heavy a pyramid.
 
edatoakrun said:
From its inception, "free...forever" has been structured as a pyramid scheme.
No, it was in part a marketing expense (some car companies actually spend gigantic amounts of money on advertising instead — I think Tesla's marketing expenditures are much more useful). The idea was to change the perception of EVs as limited range local commuter cars, which it did: the Supercharger network was a paradigm shift in EV utility.
Yes, if Tesla is able to sell large numbers of BEVs in the future to owners who are willing to make large payments for access to the sites, then the losses it has taken and will continue to take, on drivers like yourself, may be manageable.

Success will depend to a large extent on how soon Tesla ends "free...forever" to new buyers, as every BEV it sells with "free...forever" is an additional future liability.

As I have said previously, I think Tesla's plan to allow the first ~million Tesla buyers "free...forever" is unsustainable, as it is unlikely to ever sell enough BEVs and also convince the buyers to pay enough for charge site access in the future, to support so top-heavy a pyramid.
Well, I can't recall if it was mentioned in this thread but the Model 3 will have a pay-per-use option. My sense from reading many comments from prospective "3" buyers is that this approach will be more popular than a one time unlimited use option.

This suggests that Tesla won't have anything close to a million cars on the free forever plan. Regardless, the cost of providing the service to perhaps 200-300k cars, with unlimited access, is fairly small (only a tiny proportion of their miles, on average, will be from Superchargers). The $2000 per car fee for Supercharger access for the life of the car — whether paid directly or as part of the price of the car — provides a lot of capital for building and maintaining the network. The network will get additional revenue from the PPU charge paid by Model 3 drivers. My guess is that the unlimited access option for the Model 3 will be time-limited or linked to the owner, not something that runs with the car as with the current Model S and X. If so, it could be a continuing source of revenue for the system as the car changes hands. Just speculation on my part, though. Anyway, I don't expect many Model 3 buyers to choose this option because PPU will be less expensive for most.


Perhaps you will be correct and the Supercharger network will collapse and Tesla will go bankrupt, as you so fervently wish (based on the tone of your hundreds of posts on the subject). I'm hoping otherwise and can think of several other scenarios that will allow both the Supercharger network and Tesla to survive in one form or another.


Eventually I expect that QC stations will become so common along highways that the presence of a proprietary network will become unnecessary. Five years ago, in the early LEAF days, I wouldn't have even guessed that 2000 mile EV road trips would have been possible, much less downright easy and routine. Nowadays I get the sense that EVs really will start to supplant much of the ICEV market by 2030, something I would have thought was wildly optimistic back then. QC stations may well become as common as gas stations are now.

We shall see.
 
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