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Tesla Aims to Win Over Skeptics With Battery Swap Stations

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Re: Win ME over
Watashi   7/6/2013 1:02:30 PM
I was speaking specifically about my requirements and desires for a mode of transportation.  You can choose whatever you want; I'm not pushing my views on you – you are the crusader.  But you have yet to offer a solution.  Instead you hysterically rant as opposed to providing a reasoned argument.  Your glass must be half empty... and your earth, flat.

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Re: Win ME over
Watashi   7/6/2013 12:45:49 PM
The Lightning looks nice, but still doesn't address my requirements.  Cost and range are key no matter how much I would REALLY like the performance. 

Guess I need to play the lottery for my taste in EVs!!!

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Re: A carmaker in the refueling business
Watashi   7/6/2013 12:36:01 PM
It was actually a pretty good post.  Labeling Nexsen as anti-EV for simply pointing out challenges that will need to be address in the proposed business model seems a bit hysterical.

Your examples, the first of which are in the dustbin of history and the second is a start-up in a country with a quasi-command economy, don't help the case for swappable batteries.  Please provide something substantive if you wish to help address these very real issues.

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Re: A carmaker in the refueling business
Watashi   7/6/2013 12:18:19 PM
You have a very good point that I had not considered. 

So much of the cost of these electric vehicles is being obfuscated to make them look commercially viable; it makes me suspicious of the whole niche.

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bobjengr   7/5/2013 11:27:12 AM
This is an innovative way to market your product and I definitely wish them well.  Charles, do we know what prompted them to undertake this option?  Was it a drop (or lack) of sales or other considerations? Specifically, quality in construction and assembly or reliability during operation?   I definitely agree with one comment in that it will be very interesting to see what happens to the entire EV market when the FED removes any and all tax credits.  Will the products stand on their own?  I suppose time will tell.   Excellent post.

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Re: Win ME over
Bunter   7/5/2013 8:31:26 AM
Hi CharlesM,

Rather amusing that you go after another for a "strawman"-that is precisely what you do here to Watashi.

He merely gives his take (and I suspect with some tongue in cheek) on what it would take for himto buy, even notes he is willing to compromise some functionality.

You then expand it into a sweeping statement that "Nobody should buy EVs until they're superior to gas cars in every way and cost a fraction of the price of the guzzlers we love so much."  This is nothing like what he stated yet you project it on him.  Pure strawman.  Classic.

I have noted you using this approach in previous blogs and resisted bringing it up-your taking another to task for the same was just a bit much to swallow.

Try relaxing a bit.



TJ McDermott
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TJ McDermott   7/4/2013 7:38:12 PM
Now you too can feel like an Indy / NASCAR / F1 driver, pulling into pit row.

Long gone (except in NJ and OR) is the concept of full service gas stations.  Tesla kind of brings back the idea.

This marketing practically writes itself.  Elron, call me.


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Better place
Battar   7/4/2013 6:54:35 AM
BetterPlace did exactly that over here. They ddin't just talk about it, they built the battery swap stations all over the country, and put the cars on the road. Then they went bust. And this in a country where fuel costs 8$/gallon. Part of the problem was targeting teh wrong market - they should have gone after the light delivery vehicle and second family car market, instead of the family sallon segment. Tesla is facing the same problem - the market segment for their type of vehicle doesn't fit the business model.

William K.
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Battery life and battery swaps
William K.   7/3/2013 10:35:36 PM
A ten year battery life is a reasonable guess, and the price is anyboy's guess, since there are too many variables to allow an accurate calculation, or even a good guess. So really the whole argument is a comparison of guesses, and just about as worthwhile.

But I do challenge the assertion that petroleum wull become that terribly scarce, unless the governments choose to make it scarce, which is a very real possibility. There are too many individuals who intensely hate the freedoms that "the masses" have, and they really believe that if everyone could be forced to do things their way, "utopia" would follow. Some of them are very subtle and you would not recognize their agenda, others are more open and we recognize them as serious left-wingers. 

Really, electric vehicles of whatever kind will need to make it on their own, since the government can't subsideize them forever, and it is quite hard to make people buy things that they really don't want. And taking away the alternatives would be a good way to start a revolution, so it would be a very poor choice.

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Re: A carmaker in the refueling business
CharlesM   7/3/2013 4:35:18 PM

Barring a major breakthrough batteries will remain a major fraction of the cost of electric vehicles. It's currently over 30% for expensive models and will increase as mass market (cheaper) models evolve (as a % of car cost even though battery cost may drop).

Who says batt cost will increase as a % of the car cost? A Volt battery might now be 50% of the $40k car price, and if they reduce costs by $10k and pass those on, it will be a $30k car w/ a battery that's only 33% of the total. Down, not up (but who really knows)?

It may take a few years to happen but one blogger above correctly pointed out an owner of a new Tesla (3 years from now) may be reluctant to exchange his expensive battery (even $150/kwh is amost $13,000 for an 85 KWH battery) for one 3 years old an unknown number of charge cycles so much closer to its end of life.

Maybe, or they'll prefer the odds that the replacement is newer/better, or if they're concerned maybe they'll opt to have their original shipped back to them, as Musk announced as an option. Rich buyers, rich options, right? This whole exchange is a premium service for the more well-heeled (and Design News commenters who think EVs are a failure because the range is too low and it takes too long to recharge).

...But who is going to suffer the cost of wear and tear and the eventual demise of the engines? Or batteries?

You might say Tesla, right? That assumes they can build in a cost for each battery exchange and create a sinking fund to replace the battery when it reaches EOL.

But that won't work. Reason: No one is forced to use the echange program so that reveue to retire the spent battereies isn't linked to that cost. As an example I might never use the exchange service and charge my battery free (or from home power) until close to its EOL and then go to an exchahge station, pay the minimal fee and drive away with a much newer battery (presumamby) for practically no cost.

I don't think the program will be structured to allow such abuse unless costs are covered to make that an intended feature.

Have you ever used the propane tank exchange services? Yes, their prices seem exorbitant compared to stations that refill customer tanks but the reason is not just opportunistic price gouging. Take a look at the cutomer returned tanks! Many must be scrapped and that cost is reflected in those prices.

Just as in my Tesla example a customer who has always refilled his tanks with no revenue going to the exchange provider can take his tank to a convenience store and get a new (or newly refurbished) one and all the exchange provider gets is the excahnge fee.  These propane tanks are only about $25 but even so the exchage provider does not charge that much above the gas cost so he loses money when a customer's exchange must be scrapped and the rest of us must pay for it.

Is this a fair comparison? The two different propane sales options are more like comparing single serve beer bottles to a refill in the same glass from a keg. Bulk sales are virtually always cheaper for obvious reasons.

The only way I see this working is for Tesla to own the batteries and charge the customer fees to cover its cost over its useful life.  There would probably be a fixed fee based on no recharging (just leasing the $25K battery and neber owning it) as well as a fee based on charging cycles assuming that is a measure of battery life.

Assuming a $25K battery and money at 3% $750/year would be needed to cover the investment opportunity cost alone without any depreciation or amortization but we know it can't last forever.

If the battery has a finite life based on charging cycles that cost would need to be recovered  in addition. I don't know that value.  If 1000 cycles then another $25/charge.  If it's 5000 cycles then only $5/ charge.  And if its life is use and time related (like 5000 cycles or 10 years whichever comes first) then that needs to be factored in.

Amortizing the $25K battery over 10 years at 3% would require payments of $241.40 per month so I expect that might approach the minimum charge to the consumer to make such a program viable. If the cost per charge cycle were $25 and he had more than 10 per month the fee would need to increase to cover the fact that he was depleting the life expectancy faster than the 10 year amortization recoverd its cost.

Where are you getting all these costs and assumptions??

These are just some thoughts based on pure guesses (as to a 10 year life and costs per charge cycle) and are meant to be examples of factors that need to be addressed in any battery excahnge that is sustainable.  Manufacturers (Tesla included) are certainly free to take revenue from one area (new car profits) to subsidize another (like free electricity for charging or battery exchange programs) but one way or the other the revenue must come from somewhere. With new car sales growing it's possible profits for such subsidies could continue for a long time but at some point the sum of prior car sales using those subsidies will overshadow new sales to subsidize them and those programs must be sustainable on their own.

Guesses indeed. Which makes your argument specious.

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