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Tesla Aims to Win Over Skeptics With Battery Swap Stations

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Interesting, but doesn't address the root cause
Jim_E   7/3/2013 10:15:05 AM
Interesting approach, but this doesn't address the root cause of batteries still having horrible charge characteristics.  I give Tesla credit for designing the car in a way that the batteries can be swapped out, as that does give them an edge, but I have no desire for a vehicle with limited range, and non-universal fueling support.  (Well, I guess you can plug it in anywhere....)

When the breakthrough battery / energy storage technology does finally arrive, it will be interesting to see how electric vehicles are adopted by the general public.

I hope that the gasoline infrastructure doesn't totally disappear though, as I plan to keep a classic car or two, and they'll need fuel!

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Re: A carmaker in the refueling business
CharlesM   7/3/2013 10:37:53 AM
Remember the gov paid for the EV, Hybrid, battery development and production lines upfront so big autop has little debt/costs in them, just profits they are not passing to the consumer.

The government paid for virtually every significant technology we have: the integrated circuit, the internet and the World Wide Web, servo systems, communications protocols, satellite communications including GPS, rural electrification, flood control for the economies in the southeast, water and power to the southwest, aircraft and propulsion systems, nuclear reactors, etc.  See any business opportunities in any of that? Like all the others, the move to electromotive transport will be well worth it in increased economic output and reduced societal costs.

Tesla did get lucky to be able to purchase its facilities at fire sale prices, because of the Bush economic crash and its particularly impacts on the automotive industry. The NUMMI plant was perfect for them and they got it for a song at just the right time, along with stimulus funds that started in the Bush years.  (Maybe Tesla should be nicknamed Bush Motors! Heh.) What's good for Tesla will be good for the country, orders of magnitude times over. Musk is even trying to liberate us from antiquated dealer networks. Imagine if brick and mortar businesses had a lobby that prevented all internet commerce; that's about where the auto industry is.

Some speculate that Musk's real goal is to create a new energy distribution industry more than being just an EV car manufacturer. He doesn't particularly care about compatibility with other EVs, though. He leads in his own way and if other manufacturers want to follow, great, but Tesla doesn't seem dependent on getting other makes on board, at least yet.

Better Place was a whole different story. Did they even have any cars that they could do a battery swap on?  Not in this country. It's hard to implement an idea, no matter how good and let alone turn a profit, when it's impossible to implement in the largest automotive markets. (The Volt and the LEAF are not battery swap compatible.)

User Rank
Win ME over
Watashi   7/3/2013 11:35:21 AM
If they want to win me over all they have to do is let me have the sporty model for under $10K.  It will barely be able to get to work and back, but if it is as fun as a sports car, I would learn to like it.

  Paying real money for any EV novelty car just won't work.  I refuse to live near urban centers, refuse to drive anemic cars, and rack up over 100 miles a day.  I won't even pay $15K for a Polaris RZR, and I would likely have more use for it.

Good work on the performance front (except range), but more work is needed on the rest.  

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Re: A carmaker in the refueling business
Nexsen   7/3/2013 1:32:40 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).

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.

But as you pointed out "why worry" since you have the option of exchanging it for another.

Here's why: Assume for the moment there existed a low cost engine exchange program for our current IC engines.  Instead of going in for service you went in for a pit stop and drove away with a different engine "all tuned up and ready to go" but clearly one that may have far more miles on its bearnings, camshaft, and other parts that eventially wear out.

How would you feel about exchanging your brand "new" engine? And who pays for repair if your exchange blows up tomorrow?

And if your car's engine has been out a few yeras (assume 4) then simple prabability tells me your cahnce of getting an engine older than your new car's engine is preetty great.

If you had an old engine and in all probability would receive a newer better one, no problem, right?  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.

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.

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.

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.


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Re: Win ME over
CharlesM   7/3/2013 1:59:07 PM
That's the spirit, Watashi! 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. Until then, just keep burning expensive hydrocarbons! If it gets to be a problem, somebody else can deal with it. Take that, stupid government!

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Re: A carmaker in the refueling business
CharlesM   7/3/2013 2:04:50 PM
What an elaborate straw man argument, Nexsen. You should win some kind of creative writing prize for that.

Jerry dycus
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Re: A carmaker in the refueling business
Jerry dycus   7/3/2013 2:33:03 PM
Nexsen all your objections have easy solutions if they are even a problem which anyone doing such would take care of.  Why not just say you are against EV's instead of such a misleading rant?


Remember battery swapping is 100+ yrs old used in the taxi, truck fleets of 1900-1920's in many cities and milk trucks until the 60's, no?

The Leaf has a exchangable battery pack as do some Citrons? EV's now and they are already swapping in France with battery rentals/lease and spreading around Europe now.



Jerry dycus
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Re: Win ME over
Jerry dycus   7/3/2013 2:46:29 PM
Seaking of EV's being superior The Lightning MC EV just beat all the other MC's in the Pike's Peak race, is the fastest production MC at over 200mph with well o0ver 100 mile range.


The E-tracer aero cabin MC EV goes 200 miles range and limited to 150 mph by the factory though has the power for close to 200mph.

The Tesla is better than any lux sedan as shown by it cutting other lux sales as it puts them to shame.


In a few yrs EV's will just blow away ICE's in every way. My Aero MC can charge in 15 minutes using 1920's tech. Remember the 1911 Baker Electric had a 110 mile range back then. Think if EV's had the same investment as ICE's how better off the world would be?


But doesn't matter as in 20 yrs oil will be too valuable to burn making gas cars moot. Fight it all you want but EV's will win as far less costly than ICE's even now. 

A Leaf EV in 5-7 yrs can pay it's full cost just in gas savings, making it free compared to a gas car total costs.

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Re: A carmaker in the refueling business
Nexsen   7/3/2013 3:07:13 PM
Well, CharlesM, I'm not too creative a writer since I had to look up what a "straw man argument' is.  Wikipedia says: 

A straw man or straw person, also known in the UK as an Aunt Sally,[1][2] is a type of argument and is an informal fallacy based on misrepresentation of an opponent's position.[3]

I would really like to know what you thought was a fallacy and who I viewed as an opponent and misrepresented.

 I think both you and Jerry mistook my comments as being against EV's.

That's not the case. I am a Tesla fan after seeing one recently and find what Elon Musk has accomplished to be absolutely amazing.

The intent of my comments were to focus some attention on what will be necessary for any sustainable battery exchange program to work.  This is definitely not criticism of Tesla since they haven't defined how it will work but some bloggers have stated "assumptions" that can't work. (Ideas like paying a very small fee and exchanging your old $25K battery with reduced like expectancy for a newer one worth thousands more.)

Jerry mentions cases where battery exchange has been used and I believe they were all cases where the batteries were all owned by the fleet owners, taxi companies, etc. and as I stated I believe that is the solution. The owner of the battery (perhaps Tesla) can certainly exchange them for consumers if they are theirs to begin with and base the charge to provide batteries to customers on whatever it takes to make the service viable.

That is what I think will be required unless a customer driving into the charging station with an old battery worth perhaps half of what a new one costs is willing to pay perhaps $10,000 to drive away with a not only "charged" but much newer battery.

That was my point.  And that's business reality not a rant against electric cars.  I hope I made the same point in my hypothetical example of an internal combustion engine exchange program so it's nothing to do with electric versus conventional.

My point would be true if someone offered an exchange program for convetional lead acid batteries for conventional cars.  They cost perhaps $200 so it would not be viable for a company to offer to exchange old batteries (they only last 3 or 4 years) in their 4th year for "fully charged" newer batteries for 72 cents. ($90/$25K  = $.72/$200)


User Rank
Re: A carmaker in the refueling business
CharlesM   7/3/2013 3:20:58 PM
I just thought you made a precarious argument based on conjecture, suppositions, weak assumptions, flimsy premises, etc.  That's my opinion.

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