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Anyone insulted by the arbitrary battery upgrade cost?

Am I the only one that is somewhat insulted by the obviously arbitrary cost differential between the 40, 60 and 85 kWh pricing? I realize this is TM trying to maximize their profit, which is all well and good, but wouldn't it be more appropriate if the cost difference was at least somewhat tied to the actual material costs of the components?

This is akin (to me at least) to the oil companies charging $4.00, $4.15 and $4.30 for Regular, Mid and Premium gas, when I've been told that the refining cost difference is a few pennies per gallon. It rubs me as "we can gouge you because we can".

I really want the 60 kWh battery but think $10K is too much. What price would get you to upgrade your Model S? For me it's about $5000. I have no idea what TM's incremental cost is, but they might actually generate a higher per-unit profit if they lowered the cost but more people upgraded. All they need is the data of what people are willing to pay to pull the trigger. Please post yours.


@mboedigh, reservation holders and owners can create threads that are only accessible to other reservation holders and owners. These threads are not visible in the topic listing, and if you happen to link directly to the thread, non-reservers/owners will see some kind of 'not authorized' message.

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@Rick, I'm not trying to insult you with this post. I'm going to explain why you received the kinds of responses you did. These types of responses are not characteristic of this forum, but you received them for very particular reasons, and it's not simply because you said something negative about Tesla or the Model S. There are plenty of threads on these forums that are critical of Tesla in some way or another.

If your original post only consisted of your third paragraph, that would have been great, and would have generated some good discussion.

Reasonably, you are upset that people have insulted you, but it's because in your first two paragraphs, you made assertions that are somewhat insulting because you had no facts to support them, and you assumed that it was so obvious, that no one would disagree with you.

You said that it is an "obviously arbitrary cost differential" and accused Tesla of price gouging. Here you are suggesting that Tesla is being malevolent, that they're using underhanded business tactics to make more money than they deserve. This is an insult (albeit to a company, not a person here on these boards). You used the word "obviously" instead of providing facts that would support your characterization. Tesla set the upgrade price at $10,000. You are implying a certain motivation behind this behavior, but did not provide evidence of this motivation. Instead, it seems you think it is "obvious" and perhaps because you consider the price so high, you feel that most others would readily agree and perhaps because Tesla is a company for profit, we would all feel the same way.

Furthermore, it is actually insulting to other forum members too. By stating that the "fact" that the pricing is "obviously arbitrary", you are already putting yourself at odds with anyone who does not think the pricing is arbitrary, and then people will not want to have a nice discussion with you. I do not think the pricing is arbitrary, yet you claim that this "fact" is obvious. So what I am I supposed to take away from that? Is it that I'm too stupid to understand how arbitrary the pricing is? I must be, or at least, that's what you must think of me if it's so obvious to everyone else.


Now, addressing your third paragraph specifically, I agree. That's exactly what I thought when the pricing was first announced. $10,000 feels like too much money for the ability to drive 70 miles further and accelerate a little faster. I also thought that $5,000 would have been a price that I am more comfortable with.

However, since I have little idea of the costs involved, I can't really make a judgement as to whether or not $10,000 is an absolutely fair price. However, I still think it is within the realm of reasonable-ness, and I am willing to pay it because they're isn't really any other option if I want a longer driving range. (I'm getting the 85 kWh btw). If the price was $20,000 for each upgrade level, then I would only get the 60 kWh battery, as the price would be too high for me, personally, but I still would not have considered that an arbitrarily high price. Expensive? Yes. Price gouging? No, or more accurately, I wouldn't know. Yes of course, there would be some price at which I too, would claim that obvious price gouging is going on. If Tesla was charging $100,000 for each upgrade, and/or alternatively, we hear news that said Panasonic was selling batteries to Tesla for only $100, well then I too would be very unhappy and complain about it. But for now, all I can say is that I think the ideal price is $5,000, but I don't know enough to say that $10,000 is unreasonable.

It's interesting to consider whether Tesla could make more money with lower upgrade prices, but without much of an establish market or established competitors, I imagine that would still be a tough analysis. However, since I don't believe the price is completely arbitrary, I have to assume that Tesla did some kind of analysis to come up with the pricing that they did, and they have more expertise and more awareness over their material and operation costs. I think they're really the only ones who are in the best position to figure out what the sweet spot for the cost should be.

Keep in mind that there other reasons to price the batteries beyond just the unit cost and desired margin. For example, what if Tesla said, "If we charge $10,000 for the upgrades instead of $8500, then we'll be able to afford to make more 40 kWh cars" or perhaps, super charger access and twin charger availability becomes affordable for Tesla if the battery upgrade costs are $10,000. Who knows? (Tesla does)

olanmills - did you read my post where I admitted I was wrong? The $10K price increment seemed arbitrary to me and I expressed that as my opinion. Now I think it's in the ballpark of being reasonable.

I agree I should have used the words "in my opinion" instead of "obviously" but that wouldn't have mattered to people like (not sinking to their level). I wouldn't personally insult anyone no how much I disagreed with them - these are just discussions about a car for crying out loud.

Olan is very patient.

You may recall in your first reply after you started the thread, that you said unless we were Tesla engineers "we didn't have a clue." There are many skills here which you may not know about. I've been very impressed by the skill set of the folks here, and they are happy to share of themselves freely.

In the same mail you then asserted you can "buy any car you choose". Great for you! Some of these folks here can. Others cannot, and look at this vehicle as a high expense with a low operating cost. There are some here that are buying this because they don't want to pay 200,000 miles worth of gas on an ice. The fact is, we don't really know unless they say. And most people don't talk about it because it's rude.

Further in the same mail you called all of us collectivley "hilarious". I assume you find us laughable. You mock all of us then?

That was all in your first mail.

But I'm guessing at this stage in your life we are not the first people to have this conversation with you. If you are a high-functioning autistic person and have difficulty reading people, we can understand and will accomodate accordingly. If you're not, your feigning offense isn't saying much for your social skills.

And I'm not trying to offend you. You say you don't understand the reaction. I'm trying to tell you why.

"Gouging", btw, only applies when there is an essential good or service which you are more or less obliged to get from one supplier, who then takes advantage of that. Only applicable in this case if the Model S is immensely, almost infinitely, desirable.

Discussions about past discussions are among the most boring and annoying things that can happen on forums... Just sayin'.

Both olanmills and jbunn captured it well, and more politely than I likely would. Volker is once again right in his hinting that we've likely reached a threshold value with this thread.

Back to the "my spreadsheet says different than yours" threads...

@Brian H, in that case "gouging" is definitely applicable IMO :-)

(in the extend of me considering to buy another apartment just to get better garage to Model S, which my more practical mind considers to be ridiculous idea because I don't even need the car).

Rick you say you would never sink to the point of personal insults, well as one of the people who wrote an early reply to your thread I found the comments that we "didn't have a clue" and that the discussion would be better without the "hilarious" early adopters personally insulting. Not trying to antagonise or prolong this just trying to give you an idea why your thread has garnered the reaction it has.

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