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

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dgpcolorado said:
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, a "marketing expense" it was, and a brilliant one at that. By making SCs "free" and encouraging long-distance driving, Tesla also controlled the message in the media - rather than having to read endless pieces comparing the price of Supercharging with gasoline, we've instead seen stories, posts, etc. that focus primarily on the utility of the SC network.

Even after the "3" ships in volume and there's a pay-per-use model for the SCs for most cars, I anticipate that Tesla may continue to subsidize its SC locations for a while, in order to keep charging costs below gasoline as Elon Musk promised. This seems most likely to be needed in places like California where real estate is expensive and electric utility demand charges are substantial, as well as in remote areas where the SCs see relatively little use yet still need to be maintained.

While putting an appropriate price on carbon would decrease this burden for Tesla (and other quick-charge network operators), the cost of the SC network should remain within reason when viewed as a marketing expense. Long term costs should also drop as Tesla installs more solar PV and battery storage at SC sites.
 
dgpcolorado said:
.
...This suggests that Tesla won't have anything close to a million cars on the free forever plan...
You now seem to be agreeing with my post below of July 2015, that ~ million Cars allowed the "free...forever" promotion is a foolish idea:

Now, you just have to get TSLA to agree with you...

edatoakrun said:
="dgpcolorado"
...Whether or not the network will remain free without limits when there are a million Teslas on the road remains to be seen...
As per comments by JB Straubel, Chief Technology Officer, Tesla Motors (and others at TSLA) "free...forever" will only apply to initial Tesla BEV sales, and Supercharger fees will be instituted at a later date.

As you pointed out previously Straubel (at ~13 minutes into this video) says he thinks this will need to occur after ~ one million Tesla sales:

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

IMO, fee-per-charge at Tesla Superchargers will probably have to happen at a far lower total sales number, if superchargers are to remain reasonably reliable.

Let's see how well "free...forever" is still working, when and if Tesla sells a few hundred thousand BEVs.

The reason Tesla owners only occasionally have to wait for a charger today is because there is a ratio of nearly ~one charger installed for every twenty S's on the road.

So of course, many of the charger stalls are empty, most of the time.

Do you think Tesla will be able to maintain that high a ratio of "free...forever" chargers to vehicles, and corporate profitability, when and if it reaches ~one million BEV sales?
http://www.mynissanleaf.com/viewtopic.php?f=7&t=19617&start=40
 
edatoakrun said:
dgpcolorado said:
.
...This suggests that Tesla won't have anything close to a million cars on the free forever plan...
You now seem to be agreeing with my post below of July 2015, that ~ million Cars allowed the "free...forever" promotion is a foolish idea:

Now, you just have to get TSLA to agree with you...

http://www.mynissanleaf.com/viewtopic.php?f=7&t=19617&start=40
The end of the "free...forever" promotion may have been timed to stimulate weak demand for for Models S and X in this quarter.

Just be sure to order your Tesla in the next ~eight weeks, and take delivery by next April fools day.

I wonder how will this effect demand next quarter...?

Tesla officially announces end of free Supercharging, new ‘Supercharging credit program’ starts in 2017

...The company is not releasing all the details of the program, but it confirmed that starting after January 1, 2017, 400 kWh of free Supercharging credits will be given with new Tesla orders and “a small fee” will be charged for Supercharging after the credits are used...

...For Teslas ordered after January 1, 2017, 400 kWh of free Supercharging credits (roughly 1,000 miles) will be included annually so that all owners can continue to enjoy free Supercharging during travel. Beyond that, there will be a small fee to Supercharge which will be charged incrementally and cost less than the price of filling up a comparable gas car. All cars will continue to come standard with the onboard hardware required for Supercharging.

We will release the details of the program later this year, and while prices may fluctuate over time and vary regionally based on the cost of electricity, our Supercharger Network will never be a profit center.

These changes will not impact current owners or any new Teslas ordered before January 1, 2017, as long as delivery is taken before April 1, 2017....
https://electrek.co/2016/11/07/tesla-end-of-free-supercharging-new-supercharging-credit-program-2017/
 
edatoakrun said:
edatoakrun said:
dgpcolorado said:
.
...This suggests that Tesla won't have anything close to a million cars on the free forever plan...
You now seem to be agreeing with my post below of July 2015, that ~ million Cars allowed the "free...forever" promotion is a foolish idea:

Now, you just have to get TSLA to agree with you...

http://www.mynissanleaf.com/viewtopic.php?f=7&t=19617&start=40
The end of the "free...forever" promotion may have been timed to stimulate weak demand for for Models S and X in this quarter.

Just be sure to order your Tesla in the next ~eight weeks, and take delivery by next April fools day.

I wonder how will this effect demand next quarter...?

Tesla officially announces end of free Supercharging, new ‘Supercharging credit program’ starts in 2017

...The company is not releasing all the details of the program, but it confirmed that starting after January 1, 2017, 400 kWh of free Supercharging credits will be given with new Tesla orders and “a small fee” will be charged for Supercharging after the credits are used...

...For Teslas ordered after January 1, 2017, 400 kWh of free Supercharging credits (roughly 1,000 miles) will be included annually so that all owners can continue to enjoy free Supercharging during travel. Beyond that, there will be a small fee to Supercharge which will be charged incrementally and cost less than the price of filling up a comparable gas car. All cars will continue to come standard with the onboard hardware required for Supercharging.

We will release the details of the program later this year, and while prices may fluctuate over time and vary regionally based on the cost of electricity, our Supercharger Network will never be a profit center.

These changes will not impact current owners or any new Teslas ordered before January 1, 2017, as long as delivery is taken before April 1, 2017....
https://electrek.co/2016/11/07/tesla-end-of-free-supercharging-new-supercharging-credit-program-2017/

Wait. So you've maintained all along that they model is not sustainable once Model 3 arrives, and they will have to charge something or people will just start using it to do daily charging. Then when they come up with a new system that addresses this issues and launch it at the start of the year Model 3 will arrive, you change you position on why they are doing it to just simply that they are trying to increase demand for Model S. Perhaps you are right that they are doing this to stimulate demand for Model S, but the main reason is still your original premise that it wont be sustainable as the network builds out and the Model 3 gets released in mass.

I see this as a positive for the company in many ways. Original owners still get unlimited long distance, and It gives new Tesla owners free long distance travel for 1000 miles per year. Tesla has much more control over the cost of the supercharger network. Adding a billing system to the network makes it easier to allow other car manufacturers onto the network (which may be a big reason behind this that is not announced yet). I'm long TSLA and this is a positive for the stock in my view.
 
palmermd said:
...you've maintained all along that they model is not sustainable once Model 3 arrives, and they will have to charge something...
"Free... forever" has in fact been abandoned long before the model 3 begins production, and with a small fraction of the ~"million" S and X sales that TSLA projected, without even selling the "few hundred thousand" cars that I thought might be possible.

When do you think will TSLA will install all those "solar and battery pack additions to the stations" you expect?

Post 1, Page 1:

edatoakrun said:
Thought it might be time for a thread on this topic, continuing from the off-topic discussion at:

http://www.mynissanleaf.com/viewtopic.php?f=26&t=11219&start=130" onclick="window.open(this.href);return false;

palmermd said:
...The current cars are paying for the charge stations...after the network is built out, the next car sales will pay for the solar and battery pack additions to the stations. Yes, sales of the Model S will pay for the build-out of the network and in return they will get charging for life. I don't believe that Model 3 will have the same offer. I expect that they will be charging for Model 3 owners to use the superchargers. $100k car gets prepaid charging, $50k car gets to pay for the energy consumed. Tesla has not stated any of this but this is just my own view of what they are doing and I think it makes perfect sense...

Tesla is charging the one group who is willing to pay for the infrastructure, and that is people who can afford a $100k car.
Well, this is an interesting theory, variations on which I've read many times before.

Can you try plugging in the anticipated costs for the network and the kWh (purchased or generated) and show how it could actually be profitable, or even recover the costs, for TSLA?

It seems to me that the only way it could work (and quite improbably, at that) is if the future purchasers of the "$50k car" (if and when they are sold) would be willing to subsidize the charging costs for those "people who can afford a $100k car" in the present.

Anyone else have a guess on how "free...forever" DC charging could be possible?
 
edatoakrun said:
When do you think will TSLA will install all those "solar and battery pack additions to the stations" you expect?

Battery supply is still waiting on completion of the Gigafactory in Sparks. Solar won't likely go in without the battery. I think all of these plans were put on the shelf to put focus on Model 3, and rightly so. I could see them building roofs with the solar shingles on top for marketing displays for the solar roof product.

Patients grasshopper. These things take time.
 
Tesla officially announces end of free Supercharging, new ‘Supercharging credit program’ starts in 2017
When I got this announcement, my immediate reaction was why they were trying to push people to the Bolt, since IMHO, Supercharger access is the leading feature the Model 3 has that the Bolt lacks. They should have waited longer before pulling this.
 
jlv said:
Tesla officially announces end of free Supercharging, new ‘Supercharging credit program’ starts in 2017
When I got this announcement, my immediate reaction was why they were trying to push people to the Bolt, since IMHO, Supercharger access is the leading feature the Model 3 has that the Bolt lacks. They should have waited longer before pulling this.

They didn't change supercharger access at all. The existence of the network is still a huge selling point over the Bolt. One of many advantages for the Tesla.
 
palmermd said:
edatoakrun said:
When do you think will TSLA will install all those "solar and battery pack additions to the stations" you expect?

Battery supply is still waiting on completion of the Gigafactory in Sparks. Solar won't likely go in without the battery. I think all of these plans were put on the shelf to put focus on Model 3, and rightly so. I could see them building roofs with the solar shingles on top for marketing displays for the solar roof product...
I suppose self-delusion may be a common response from those Tesla owners who have been lied to by TSLA for so many years now:

OFFICIAL Sep 24th 2012 at 11:20PM
Tesla Supercharger network offers free, solar energy for Model S drivers

PRESS RELEASE

Tesla Motors Launches Revolutionary Supercharger Enabling Convenient Long Distance Driving
Drive the Model S electric car anywhere in the country on pure sunlight for free

HAWTHORNE, Calif. – Sept. 24, 2012 –Tesla Motors today unveiled its highly anticipated Supercharger network. Constructed in secret, Tesla revealed the locations of the first six Supercharger stations, which will allow the Model S to travel long distances with ultra fast charging throughout California, parts of Nevada and Arizona.

The technology at the heart of the Supercharger was developed internally and leverages the economies of scale of existing charging technology already used by the Model S, enabling Tesla to create the Supercharger device at minimal cost. The electricity used by the Supercharger comes from a solar carport system provided by SolarCity, which results in almost zero marginal energy cost after installation. Combining these two factors, Tesla is able to provide Model S owners1 free long distance travel indefinitely.

Each solar power system is designed to generate more energy from the sun over the course of a year than is consumed by Tesla vehicles using the Supercharger. This results in a slight net positive transfer of sunlight generated power back to the electricity grid.
...
http://www.autoblog.com/2012/09/24/tesla-supercharger-network-offers-free-solar-energy-for-model-s/
 
I think that this thread is now moot. That being said, Free SC access was a terrific marketing tool, far more valuable than spending the same money on advertising, and imposing the cutoff will undoubtedly boost sales/deliveries for the next two quarters, while also raising the value of the existing cars on the used market. I particularly like Tesla's decision to give an allowance in kWh, as it will encourage people to move from the SCs once they've got enough charge to get to the next one plus any reserve they want, instead of staying longer because they can. Now we just need to see if/how they tier and price SC charging packages, in addition to the a la carte price.
 
Now that "forever" is over, time to consider how Tesla will pay for its DC network.

Since Tesla already rations kW between chargers at many sites based on demand by lowering kW deliveries when more BEVs are plugged in, a time simple per-minute-fee might be a viable option.

Tesla could adjust the fee depending on the cost of electricity in the area.

For example, in high-cost California, at a site with six chargers, 360 kW total capacity, and 120 kW capacity per charger, it could set the fee at 50 cents per minute.

This would result in a variable cost per kWh of 25 to 50 cents per kWh, depending on how many BEVs are charging, which would might at least come close to TSLA's actual delivery costs per kWh.

This would also incentivize drivers to avoid charge sites already near full occupancy, and also to leave earlier as the last empty chargers filled up.

In related news, Musk hinted at model 3 DC charge fees last week:

Elon Musk says Tesla Model 3 will include ‘free long-distance charging’

...the Model 3 will not qualify for lifetime free supercharging, however in answering this question Mr. Musk stated:

Model 3, from the beginning we said free charging is not included in the Model 3 – free unlimited charging is not included, so, free long distance is, but not free local. It becomes really unwieldy for people to use the gas station approach for electric cars, like, cars should really be charged where you charge your phone, but then you just need to solve the long distance problem which is what the supercharger stations will do.

We suspect this means that they will be on a similar program to the Model S, with a certain kWh allowance per year – only perhaps with a lower limit as the Model 3 is expected to be a more efficient vehicle. Tesla has responded that they have nothing further to announce beyond what Elon said on stage.

You can see a video of the meeting with Q&A here. This answer starts about 15:30 into the video...
https://www.tesla.com/shareholdermeeting
https://electrek.co/2016/11/17/elon-musk-tesla-model-3-include-free-long-distance-charging/

TSLA has also begun to try to get payments from site hosts:

Tesla is increasingly able to make businesses pay for the electricity delivered by its Superchargers
https://electrek.co/2016/11/16/tesla-superchargers-business-paying-electricity/

This may soon be a problem as well as an opportunity for TSLA, IMO.

Once site hosts begin to actually have to pay to charge Tesla BEVs, they may soon to realize that they can optimize the costs and benefits to their businesses by offering DC charging to all BEV drivers instead.
 
Clear-as-mud explanation of the latest policies RE the NOT "free...forever" Tesla DC network.

Understanding Tesla’s new Supercharger access for Model S and Model X

After the changes to both the Supercharger access structure and the referral program today, it can be difficult to understand the current situation around the access to Tesla’s fast-charging network. There were a lot of questions in the comment section of our last article about it.

We reached out to Tesla to get the best understanding that we can in order to break it down to you as simply as possible in this post...
The terms farce and desperation neither of which I would dispute, come up in the discussion below:

https://teslamotorsclub.com/tmc/threads/prediction-free-supercharging-to-be-brought-back.89344/page-4
 
Reply on-topic below, to comments at:

Official Tesla Model 3 thread

http://www.mynissanleaf.com/viewtopic.php?f=10&t=18016&start=680

It's quite striking that many Tesla owners do not comprehend the degree of control TSLA exerts over them by denying them access to any public chargers (DC charging stations) unless they make a large payment to buy into TSLA's own network, a network to which it also bars public access to all other BEVs.

As long as TSLA maintains this policy, Tesla vehicles will only interact with the public charging infrastructure only parasitically, reducing access and dependability of nearby public chargers to drivers of all other BEVs during peak demand periods, when TSLA's own chargers are inadequate.

dgpcolorado said:
edatoakrun said:
If TSLA sells a significant fraction of the total number of model Threes it has projected, we should expect to find public DC charge stations Tesla'd frequently, whenever nearby proprietary "superchargers" are crowded.

Thank you, Tesla, for your generous policy of:

Our chargers are ours, and yours we can share... ...
Perhaps not. It takes a $450 adapter for a Tesla to use Chademo; how many Model 3 owners will buy one? Very few, would be my guess...
You missed the far more likely reason model 3s may not damage public charging opportunities very much implied by my statement above, that TSLA simply may not sell very many model 3s.

="dgpcolorado"...There is a possibility that the Model 3 will eventually get a CCS port; quite likely in Europe, less certain here. But that's not Chademo...
Virtually all new public stations in the US have both public port options, and probably will for the foreseeable future, so your comment is irrelevant.

Again, what you seem to be missing is that TSLA's policy to date has been to make purchasing access to its "free" DC charger network mandatory, at a cost of thousands of dollars before it will permit you (or any other Tesla driver) access to any public DC chargers.

TSLA has never allowed buyers to opt out of the very high costs of "free supercharging", and use public chargers instead.

And I doubt TSLA ever will give its vehicle owners that option, unless compelled by legal action or the demands of its creditors.

="dgpcolorado"...Anyway, Tesla and its customers paid for those Superchargers...
TSLA has lost money, huge amounts of money, every year since it's creation.

So it would be more accurate to state that TSLA's investors expect future Tesla buyers to pay for the chargers.

="dgpcolorado"...Did you pay for the Chademo DCFC stations? How are they "yours?"...
Any BEV driver can charge their BEV at public Chademo/CCS chargers, and we "pay for them" every time we use them.

By doing so every time we travel outside our initial range, we are doing what Tesla drivers are not, contributing to the establishment of the public charger infrastructure that will be required to accelerate the retirement of the ICEV/PHEV vehicle fleet.
 
edatoakrun said:
It's quite striking that many Tesla owners do not comprehend the degree of control TSLA exerts over them by denying them access to any public chargers (DC charging stations) unless they make a large payment to buy into TSLA's own network, a network to which it also bars public access to all other BEVs.

You are grossly misinformed.
SuperCharger access has been an optional purchase for the majority of Tesla's existence, with some exceptions where the access is given for free if a high trim model is purchased. The car comes with an On-board charger and a versatile mobile EVSE. An inexpensive J1772 adapter is available, as is a $450 ChaDemo adapter.

Where do you come up with this nonsense ?
 
edatoakrun said:
By doing so every time we travel outside our initial range, we are doing what Tesla drivers are not, contributing to the establishment of the public charger infrastructure that will be required to accelerate the retirement of the ICEV/PHEV vehicle fleet.
Your reasoning is perverse.

A taxpayer with only an ICE vehicle subsidizes your charging network, but you berate them for not continuing to pay fees even though they leave the network available for people like yourself ?
 
SageBrush said:
edatoakrun said:
It's quite striking that many Tesla owners do not comprehend the degree of control TSLA exerts over them by denying them access to any public chargers (DC charging stations) unless they make a large payment to buy into TSLA's own network, a network to which it also bars public access to all other BEVs.
You are grossly misinformed...
In fact, it sounds like you may be.

The reality is Tesla will not allow you to have a CSS or CHAdeMO port to access public chargers on any of the BEVs it has built to date.

The only way a Tesla owner (S and X, not the Roadster) can charge at a public charger is by FIRST buying access to Tesla's proprietary DC chargers (usually included in the inflated initial sales price of Tesla BEVs) and then, IN ADDITION, buying the CHAdeMO adapter from Tesla:

...For Model S without Supercharging enabled, onboard hardware must be activated to use the CHAdeMO adapter...
https://shop.teslamotors.com/collections/model-s-charging-adapters/products/chademo-adapter

If TSLA actually gave a damn for the convenience of its customers it would sell you a BEV equipped to charge at any public CSS/CHAdeMO DC site, and would never have installed proprietary charge ports as barriers to BEV infrastructure commonality on all of its cars in the first place.
 
You are "forced to buy" into a DCQC network every time you charge at a "not free" charger. Tesla owners prepay for the network they use most. They can choose to buy a Tesla with those terms you mention, or they can choose not to buy a Tesla, or they can choose to buy and enable an adapter. Market forces will determine if that works, so far, I doubt the lack of chademo or CSS port has dissuaded very many potential Tesla customers.

So far, you seem upset that Tesla had "forced" their customers to prepay, and you are upset that from now on, they are not going to make their customers prepay and therefore possibly encourage one to sully a CSS or Chademo charger. You are upset that Tesla owners are not paying into the CSS/Chademo infrastructure because they haven't needed/used it much, but are upset they will pay for it in the future as an alternative to paying for Tesla QC access. Seems to me, there is nothing Tesla or their customers could do that would make you happy.
 
edatoakrun said:
The only way ... ... ...
By the way, you are right that an activation fee existed to use the ChaDemo charger This never had anything to do with SuperChargers. This discussion taught me that, so it was not a complete waste of my time. However, since the Model 3 and more expensive models are activated for SuperCharger use from day #1 nowadays, that fee has been effectively deprecated.

It comes down to this:
Tesla and its customers spent their money to build out and use their own network.
You may think that you know better how they should have spent their money, but guess what ? They did not ask your opinion and could not care less how you want to spend someone else's money.

Moreover, if a Tesla should use a CCS (not possible currently) or a ChaDemo charging station, they have every right to do so, equal to your right, since both of you paid equally for the network and its use.
 
edatoakrun said:
If TSLA actually gave a damn for the convenience of its customers it would sell you a BEV equipped to charge at any public CSS/CHAdeMO DC site,
Do you similarly condemn NIssan for not including a CHAdeMO on every LEAF it sells?
 
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