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

dhanson865 · Jul 2, 2015

edatoakrun said:
="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.”

Click to expand...

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.

Click to expand...

The Average sales price of an S was over $107k as of TSLA's last quarterly report, IIRC.

In a quarter where most of the cars sold were P85Ds that cost way more than a S60 or S70D.

Looking at only a single quarter ignores the reality of the vast numbers of cheaper cars that sold in other quarters.

Take a data dive into http://logmysc.com/cpo-reports.php and look at all the cars listed for sale and all the cars removed from the listings (presumably sold). It's close to 800 cars, tell me the mix of each if you feel like doing some work. Pay attention to the vast range of prices from $45,000 to $115,000 and think about how the cheaper ones came to be that cheap. I guarantee you they didn't start out as $100,000 cars.

While the current http://my.teslamotors.com/models/design has a price range from $75,000 to $130,750 or so there are Tesla owners that got their model S for less than $60,000 in the past before the S60 was discontinued and was replaced with the S70D.

I think the guy quoted in the article is implying that all Model S are $100,000+ even though you can get one for much less and I think the article is being disingenuous by highlighting that as though every Model S is that expensive instead of just adding a editorial comment to address the accuracy of the real price range.

edatoakrun · Jul 2, 2015

="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?

Zythryn · Jul 2, 2015

edatoakrun said:
...
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?

JD has far more information than either you or I, so I would defer to his estimate of 1,000,000 cars.
Gas station stalls are empty most of the time as well. This is why it is important to size the network properly. I'm still not sure why you feel it is impossible for Tesla to keep on top of it and size the network appropriately.

edatoakrun · Jul 3, 2015

Zythryn said:
Gas station stalls are empty most of the time as well....

Many are, of course, since without an available pump, the owner cannot make a sale.

="Zythryn"
...This is why it is important to size the network properly. I'm still not sure why you feel it is impossible for Tesla to keep on top of it and size the network appropriately.

And exactly what do you think "appropriately" means?

For a Tesla driver who believes they have prepaid for unlimited "free...forever" DC charging, the optimum "appropriate" network means always having empty DC chargers along every route they want drive, as well as more empty chargers as close to their home as possible.

For the Tesla shareholder saddled with the financial liability of "free...forever" DC charging, the optimum "appropriate" network means a limited numbers of chargers only in inconvenient locations, with access limited by wait times.

And even these disincentives seemingly now inadequate to suppress demand, Tesla has begun to use nagging messages to S drivers to try to limit their network use, and vague threats from Tesla to limit future access, for those Tesla owners who have the gall to actually take "free...forever" seriously.

It is amazing to me that both the buyers and sellers of vehicles that cost over $100k on average, can be so naïve about how prices are essential to regulate supply and demand, allowing markets to function, and don't understand how pricing any product at "free...forever" precludes developing a network to distribute that product efficiently.

edatoakrun · Jul 3, 2015

dhanson865 said:
...I think the guy quoted in the article is implying that all Model S are $100,000+ even though you can get one for much less and I think the article is being disingenuous by highlighting that as though every Model S is that expensive instead of just adding a editorial comment to address the accuracy of the real price range.

I'm not quite sure what point you are trying to make, but the average vehicle price (as reported in S Direct Leasing Program Information) increased from ~$101k to ~$107 k from the last quarter of 2014 to the first quarter of 2015.

http://ir.teslamotors.com/secfiling.cfm?filingid=1193125-15-174639&cik=

I don't have a ready source, but if you can find average S sales prices since introduction, I suspect you will see this price increase is just the latest in a ~consistent trend of average S prices increasing over time, which makes Tesla's stated claims of really wanting to sell BEVs to the mass market, somewhat implausible, IMO.

Yes, I agree with you that used S sale prices continue to fall rapidly, and as I mentioned previously, the lower the price paid for an S by the second (and third, and fourth...) owners, the higher the likelihood that these owners will want to take greater advantage of the "free....forever" Tesla DC network.

If Tesla continues to allow them to...

dhanson865 · Jul 3, 2015

edatoakrun said:
average vehicle price (as reported in S Direct Leasing Program Information) increased

Ya, lease prices increased. Those are the people that aren't keeping the car because they have enough money to get a new car every two years or they don't have enough money to buy it outright and need the lease because they can't swing the cash outlay otherwise.

That doesn't tell you what the price of the average delivery is.

From my reading on teslamotorclub.com there is a subset of Model S drivers that buy cheaper builds and don't lease. Of course now that the CPO program has taken off a good chunk of those are buying CPO cars instead of new. So it goes in cycles.

Model X will come out and have all sorts of buyers cheap, middle, maxed out.
Later CPOs will appear of the Model X and the cheap buyers will switch to CPO leaving only the middle and maxed out buyers getting new.

Mode 3 will come out and we lather, rinse, and repeat.

Pick your data from the wrong part of the cycle and you have an incomplete picture. About like the 3 blind men describing an elephant.

GRA · Jul 10, 2015

A somewhat speculative article from GCR:

Tesla Starts Charging For Charging In China; Superchargers Still Free For Owners?

http://www.greencarreports.com/news/1099062_tesla-starts-charging-for-charging-in-china-superchargers-still-free-for-owners

This really needs more info.

edatoakrun · Aug 14, 2015

You really have to wonder how anyone ever could have believed that "free...forever" public charging was ever a viable concept.

Or how anyone could have been gullible enough to spend~$100k on A BEV, and expect to be able to depend on a "free...forever" private network of charge stations.

When Supercharger first appeared, the company trumpeted that they were free to use for life and in some ways encouraged its customers to use them often. But some Supercharger locations are busier than expected, causing drivers to wait for access to a charging point. Tesla has found it especially galling that some of the cars hooked up to the chargers were there for hours with no one around to move them when the charging process was complete.

People who pay $70,000 or more for a car are not the kind of folks who are accustomed to waiting patiently in line...

Now the company has dropped the other shoe. On August 13, the company fired off an email to many customers it essentially says are Supercharger scofflaws. Some of the people who got the shot across the bow from Mother Tesla were confused by it. One said he hasn’t used a Supercharger more than 10 times in the past year. Another says there isn’t even a Supercharger location in his area. One had only used a Supercharger once. Lots of other recipients were simply annoyed by the condescending tone of the email.

“The Supercharger Network’s intent remains to expand and enhance your long distance travel while providing the flexibility for occasional needed use during local trips. Our goal is to provide the best charging experience, keeping charge times low to get you back on the road as quickly as possible. As a frequent user of local Superchargers, we ask that you decrease your local Supercharging and promptly move your Model S once charging is complete….”

... if Tesla is already finding its Superchargers overused, what are things going to be like when the company starts building 500,000 cars a year, which Elon Musk says it will do by 2020? Will there be fist fights at charging stations? People who follow Tesla have noticed that the company website no longer says its Superchargers are free for life. Reality appears to be catching up with the Tesla’s utopian dream.

http://gas2.org/2015/08/14/customers-annoyed-tesla-supercharger-e-mail/

Longer comment, on the same subject:

http://cleantechnica.com/2015/08/13/tesla-letter-to-frequent-supercharger-users-ruffles-feathers-raises-questions/

One of several Tesla forum threads on this topic:

http://www.teslamotorsclub.com/showthread.php/51482-Supercharging-letter-from-Tesla-8-13-2015

keydiver · Aug 14, 2015

I don't know what the big deal is. Tesla simply needs to rein in abusers who are trying to lower their home electric bill by charging at an SC instead, or get rid of the taxi services are use them 4 times a day. (That's a commercial use, which I don't think should be given the same priority). Yes, the email was worded poorly, and misdirected to many guys who aren't abusers, but the basic message is good: if you can, charge at home, and use the SC network as it was intended, to allow Tesla owners to travel from city-to-city.
Unfortunately, some Tesla owners live in apartments or condos where they can't charge, and have no access to charging at work, but the salesman was still all too happy to sell them a car and told them to just use the "free" SC chargers. I don't think that was ever Tesla corporate's plan, no matter what some of the irate owners say. If I were Tesla, I would be giving a lot more thought to the new SC locations, so they aren't close enough to a city to encourage bad behavior.
Its not that I don't feel for some of them, many are paying .46/kWh in CA, which is more than 4X what I pay. But, IMHO there are a LOT more reasons to buy an EV than just to save money on gas.

mjblazin · Aug 14, 2015

Communications like this one make me chuckle when combined with latest word about how great Silicon Valley et al are at using Big Data. Spare me. A high school kid could write a query that would screen out owners comparing home zip code to SC Station zip code and then by frequency of charge after passing that threshold. How many Tesla owners exist? 200k? This stuff is not rocket science.

GRA · Aug 15, 2015

keydiver said:
I don't know what the big deal is. Tesla simply needs to rein in abusers who are trying to lower their home electric bill by charging at an SC instead, or get rid of the taxi services are use them 4 times a day. (That's a commercial use, which I don't think should be given the same priority). Yes, the email was worded poorly, and misdirected to many guys who aren't abusers, but the basic message is good: if you can, charge at home, and use the SC network as it was intended, to allow Tesla owners to travel from city-to-city.
Unfortunately, some Tesla owners live in apartments or condos where they can't charge, and have no access to charging at work, but the salesman was still all too happy to sell them a car and told them to just use the "free" SC chargers. I don't think that was ever Tesla corporate's plan, no matter what some of the irate owners say. If I were Tesla, I would be giving a lot more thought to the new SC locations, so they aren't close enough to a city to encourage bad behavior.
Its not that I don't feel for some of them, many are paying .46/kWh in CA, which is more than 4X what I pay. But, IMHO there are a LOT more reasons to buy an EV than just to save money on gas.

As Tesla has belatedly realized, in countries other than the U.S. where few city dwellers can charge at home, they have no choice but to build numerous SC sites in the most densely populated cities if they want to sell their cars there. IMO Free forever is destined to die an early death in such locations.

City / # of SC sites (only those with 4 or more; there are several Chinese and a few other cities with 2 or 3 currently):

London/8
Beijing/6
Chengdu/4
Guangzhou/4
Hangzhou/4
Shanghai/7
Hong Kong/8

keydiver · Aug 15, 2015

As far as I know, no one outside the US got that email, and my comment was only referring to the US SC infrastructure. I have no knowledge of the international SC issues, and honestly couldn't care less.

ydnas7 · Aug 16, 2015

GRA said:
City / # of SC sites (only those with 4 or more; there are several Chinese and a few other cities with 2 or 3 currently):

London/8
Beijing/6
Chengdu/4
Guangzhou/4
Hangzhou/4
Shanghai/7
Hong Kong/8

http://www.shanghaiguru.com/scooter-in-china/

or more to point https://designmind.frogdesign.com/2014/01/chinas-electric-bike-charging-cultures/

there are around 200 million 2 wheel EVs in China. Surely its jest to think that the Chinese can't work out how to charge a $30k Qin or a $100k Tesla yet can charge a $1k scooter.

The cost a an electrician in China is cheap, the cost of a charging point is cheap, coming to a win/win negotiation with the landlord may take time, but is possible everywhere except Beijing.

At my sister's apartment back in HK, all residents had their own parking space, all parking spaces had power points (mostly used for radios and TVs!) yes it was a wealthy apartment, but a Tesla would be about midpoint of the cars there (plenty much cheaper, plenty much more expensive)

Once the Chinese people come to consensus about how to charge EVs at apartments with non assigned parking, the issue will disappear overnight. BYD etc sales will force the issue, EV bike sales demonstrate the way.

Zero emission electricity in China will be cheap for Tesla, lots of supply, little demand. perhaps 3cents/kWh + significant demand kW charge. If Tesla uses onsite batteries to flatten out demand, then free for life SC in China is very sustainable outside of city. Inside the city is different, real-estate costs are major.

GRA · Aug 16, 2015

ydnas7 said:
GRA said:

City / # of SC sites (only those with 4 or more; there are several Chinese and a few other cities with 2 or 3 currently):

London/8
Beijing/6
Chengdu/4
Guangzhou/4
Hangzhou/4
Shanghai/7
Hong Kong/8

Click to expand...

http://www.shanghaiguru.com/scooter-in-china/

or more to point https://designmind.frogdesign.com/2014/01/chinas-electric-bike-charging-cultures/

there are around 200 million 2 wheel EVs in China. Surely its jest to think that the Chinese can't work out how to charge a $30k Qin or a $100k Tesla yet can charge a $1k scooter.

The cost a an electrician in China is cheap, the cost of a charging point is cheap, coming to a win/win negotiation with the landlord may take time, but is possible everywhere except Beijing.

At my sister's apartment back in HK, all residents had their own parking space, all parking spaces had power points (mostly used for radios and TVs!) yes it was a wealthy apartment, but a Tesla would be about midpoint of the cars there (plenty much cheaper, plenty much more expensive)

Once the Chinese people come to consensus about how to charge EVs at apartments with non assigned parking, the issue will disappear overnight. BYD etc sales will force the issue, EV bike sales demonstrate the way.

Zero emission electricity in China will be cheap for Tesla, lots of supply, little demand. perhaps 3cents/kWh + significant demand kW charge. If Tesla uses onsite batteries to flatten out demand, then free for life SC in China is very sustainable outside of city. Inside the city is different, real-estate costs are major.

Most people can carry/wheel an e-bike/scooter into their house or apartment, or else remove the battery and hand carry it to take it somewhere to be charged from any standard outlet in just a few hours. Are you suggesting that any of these activities transfers across to an electric car taking up say 75-150 sq. feet of space, weighing 3-6,000 lb, and with a battery pack weighing several hundred to over 1,000 lb., and which requires days to charge from a standard outlet? Sure, given several decades it will be possible to provide high current/voltage charging stations for most parking, at great cost. The question is whether we have those decades, and can afford to do it. I don't think the answer is yes in either case.

I'm a big fan of e-bikes and scooters for utilitarian urban transport, for energy, cost and space reasons. While I'll happily stick to my regular bike for commuting and longer-range errands, and benefit from the exercise and stress relief as long as I've got the muscle power and balance to ride it, for those who commute in regular clothes, especially in warm or hot climates and/or hilly terrain, or who need to carry lots of cargo, an e-bike/scooter makes a huge amount of sense. If anything, the Chinese government should be prohibiting _cars_ (regardless of energy source) from urban areas (or at least impose a congestion charge), but allow e-bikes and scooters to enter for free.

ydnas7 · Aug 16, 2015

GRA said:
Most people can carry/wheel an e-bike/scooter into their house or apartment, or else remove the battery and hand carry it to take it somewhere to be charged from any standard outlet in just a few hours. Are you suggesting that any of these activities transfers across to an electric car taking up say 75-150 sq. feet of space, weighing 3-6,000 lb, and with a battery pack weighing several hundred to over 1,000 lb., and which requires days to charge from a standard outlet?

Many many e-bikes are too heavy and too large to just carry into a house/apartment and don't have removable batteries. They are basically motorbikes. If only 1/3 of Chinese EV bike fit that category, that is still 70million EV bikes, in all likelihood, its will be significantly higher.

a standard power point is 10 amp 250V, with 16amp 250V also real cheap,

16A-250V-3-Pin-Switched-Socket_240132025.html

putting a coin accepter

over a 16amp 250V plug is 4kW that's enough to drive a 3.3kW EVSE, even a 10amp 250V plug will get the job done. Plenty of 15amp devices get plugged in to 10amp sockets.

evnow · Aug 16, 2015

GRA said:
As Tesla has belatedly realized, in countries other than the U.S. where few city dwellers can charge at home, they have no choice but to build numerous SC sites in the most densely populated cities if they want to sell their cars there. IMO Free forever is destined to die an early death in such locations.

I find it hard to believe people who can buy super expensive cars like S can't get chargers put in - wherever they are.

Anyway, in the US, Tesla will have to come up with "fair use" policies for their "free forever" chargers - just like the "unlimited" bandwidth broadband providers were advertising early in the game.

GRA · Aug 17, 2015

ydnas7 said:
GRA said:

Most people can carry/wheel an e-bike/scooter into their house or apartment, or else remove the battery and hand carry it to take it somewhere to be charged from any standard outlet in just a few hours. Are you suggesting that any of these activities transfers across to an electric car taking up say 75-150 sq. feet of space, weighing 3-6,000 lb, and with a battery pack weighing several hundred to over 1,000 lb., and which requires days to charge from a standard outlet?

Click to expand...

Many many e-bikes are too heavy and too large to just carry into a house/apartment and don't have removable batteries. They are basically motorbikes. If only 1/3 of Chinese EV bike fit that category, that is still 70million EV bikes, in all likelihood, its will be significantly higher.

In the U.S., all it would take would be one 'trip and fall' lawsuit, and that would be the end of that. Presumably, those that have to carry (as opposed to wheel) bikes/scooters will opt for lighter bikes or those with removable batteries.

ydnas7 said:
a standard power point is 10 amp 250V, with 16amp 250V also real cheap,

putting a coin accepter

over a 16amp 250V plug is 4kW that's enough to drive a 3.3kW EVSE, even a 10amp 250V plug will get the job done. Plenty of 15amp devices get plugged in to 10amp sockets.

With the number of electrical fires in proportion, no doubt.

ydnas7 said:

Thanks for the photos. I'm all for it, if they can do it, great. Now, all they have to do is put all those receptacles on the curbs and at the edges of parking spaces, so that no cords cross sidewalks or walkways.

GRA · Aug 17, 2015

evnow said:
GRA said:

As Tesla has belatedly realized, in countries other than the U.S. where few city dwellers can charge at home, they have no choice but to build numerous SC sites in the most densely populated cities if they want to sell their cars there. IMO Free forever is destined to die an early death in such locations.

Click to expand...

I find it hard to believe people who can buy super expensive cars like S can't get chargers put in - wherever they are.

They can probably afford it, the question is whether it's physically possible and whether they'll be allowed to. For those with more average incomes: http://www.teslamotorsclub.com/showthread.php/49610-What-If-You-Don-t-Have-A-House

evnow said:
Anyway, in the US, Tesla will have to come up with "fair use" policies for their "free forever" chargers - just like the "unlimited" bandwidth broadband providers were advertising early in the game.

Yes, reality is starting to set in.

evnow · Aug 17, 2015

GRA said:
They can probably afford it, the question is whether it's physically possible and whether they'll be allowed to.

Generally - people with a lot of money - also have the power to make things physically possible (i.e. get apartment owners to change their policy etc).

ydnas7 · Aug 17, 2015

GRA said:
Thanks for the photos. I'm all for it, if they can do it, great. Now, all they have to do is put all those receptacles on the curbs and at the edges of parking spaces, so that no cords cross sidewalks or walkways.

more photos
https://www.google.com/search?q=parking+meter&safe=active&biw=1024&bih=702&source=lnms&tbm=isch&sa=X&ved=0CAYQ_AUoAWoVChMIstrd_qSxxwIVTByUCh2ZkQ4P

its not that hard

really, its not that hard

ubitricity-portable-streetlight-attachable-ev-charging-unit.jpg

again, how difficult is it?

the thing about electricity, its ubiquitous with modern society. If the car is parked under electric lighting, duh, there is electricity in proximity.

sure, first adopters need to have their own garage, and solar really complements EVs, so its better to have one's own roof, but the accessibility of recharging is not a hard physical cost (like H2 is) but an adoption consensus curve, apartment dwellers come last, but they will come too. Do you really think BYD is selling $30k PHEVs to people who can plug in, but that $100k Tesla can't?

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

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