Hi everyone,
Let me explain a little further. Mark posted my response to him so I won’t duplicate the post. Thanks Mark, your posting is appreciated. AnOutsider, sorry, but we did not know all the details back in July, nor did we know them two to three weeks ago. The equipment we are using to Supercharge is significant, and took a lot of coordination with local utilities to deliver and activate. All utilities have been very cooperative, and many expedited things for us to make last Monday night happen. But to say the least, it was a very last minute rush to get everything in place. We also didn’t have firm “usage fees” locked down with the utilities that supply the electricity until very recently. It turns out that not only do we have to pay for metered usage, but because of the type of service, in many cases there is a “first usage” fee each month that is quite significant. We have been working thru all these costs and logistics for months.
As I said to Mark, there is nothing hidden going on here. We had hoped to announce the Supercharger network in July. It was impossible to do so. We had to delay the launch until September because there were too many unknowns. We didn’t finalize all the moving parts about pricing until late last night while I was in Boston.
What we always wanted to do was keep Supercharging access easy and the usage fee to a minimum. We also wanted to move the system towards solar. And while all of this was going on, we wanted to make sure to keep options open for everyone who was configuring their car throughout the process. In order to do so, we made the decision to include the necessary hardware in all cars that were being built. This would give everyone the exact same option today as they had in July.
If we had launched in July, the prices for Supercharging would have been:
85 kWh No charge
60 kWh $2000
40 kWh Not available
Those are the exact prices today, except for those who have configured their car already with 60 kWh batteries. For them it is $1,000.
We discussed lots of options for pricing over the past 4 months. Some included an activation fee plus pay-as-you-go fees. But pay-as-you-go fees would require some sort of password, special key or credit card debit arrangement. We did not want to do that. We seriously considered at least 6 or 7 optional payment alternatives, but eventually circled back to keeping it simple… keeping it standard on the 85 kWh cars, and having it as an optional one-time fee when the car is built on 60 kWh cars. Then we wrestled thru a series of other details:
Should the access be free and unlimited, or should it be free for a few years and then have an annual fee…we opted for free and unlimited.
Can it be passed on to a future owner – we decided yes. Should the new owner have to pay an activation fee even though access is free – we decided no. We felt as though these two decisions would increase the value of your Model S.
We went thru a whole series of these scenarios, but ultimately ended up with as simple a solution as we could find. And all this was finalized in the last week.
We also considered what would happen today when we made this announcement. We were pretty sure there would be questions about the language on the Options & Pricing page, the Design Studio and the MVPA. They all said “hardware” and some said “software” would be included in the car. None of them said access was included. It would have been much easier today to go the less controversial “pay-as-you-go” route. There would have been no question about the language to date. We also considered a “per visit fee” that would also have been less controversial. But when we weighed those options, and the need to use a credit card every time you Supercharge, or the need to have a “special key” or “password” to enable the unit each time, we just visualized people out on the road who forgot their password or key, and we just didn’t think that was the right way to go. We really wanted to keep it free, easy, and unlimited. So we felt it was better to go forward with it as “an option” for those who want to consider it, but keep the plan we think is best in the long run, is easy to use, and unlimited.
When the time came to announce the finalized plan, we wanted to acknowledge those who had already configured. Our goal all along was to make sure they had the same option today as they would have had no matter when they finalized their order. We accomplished that by including the necessary hardware and software in their car, but then we decided to do something additional for them. While it may not be viewed that way, that is why we have offered them the option to enable Supercharging for $1,000 vs $2,000. Simultaneously with the announcement today, we sent emails to everyone who has configured a 60 kWh car giving them the option to enable access for $1,000, while also answering a series of questions we thought they might have. We are also individually calling a few customers who have paperwork in hand for a 60 kWh Model S but did not finalize their paperwork this week. We are offering them the $1,000 option as well. We began making these calls at the exact same time as the announcement was released and the emails went out.
To wrap this up, we have tried to keep use of the system simple, we have made it unlimited and transferable, and we wanted to do something nice for those who configured early without full details. That’s how we got to today.
There were also a few references in this thread to other things that have not been announced. It is certainly not that way by desire. Connectivity was mentioned. We have not announced details on this because we are still working on the rates from various carriers. If we had announced the plan two months ago, it would have been more expensive than if we announced it today. We have also been working to simplify a very viable connectivity solution that, if chosen today, would be less expensive, but a pain in the butt to execute. We are trying to enable another way to use this method in a simple way, but we want to make sure we can do it before making an announcement about it. We are actively working on connectivity every day to try and get the most cost effective functionality that is easy to use. We will announce the options when we feel we have the best outcome and pricing possible. We are also working on an extended warranty, pre-paid battery replacement options, and road hazard insurance. None are ready to be announced, but all are being actively worked on. We will announce them when, and if, we are satisfied with the program details.
I hope this helps explain some of what we are doing. While it may not seem so, we are doing a lot of things everyday that are focused specifically on ease of use and minimizing cost for every Model S owner. We will continue to do so.
GeorgeB