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"Included" Supercharger Costs $2K Extra

Whoops! Turns out the “included” 60kWh pack supercharger costs $2K “extra”.

Ouch. Something of a train wreck, this is.

Irate customers? Oh yeah. And for good cause.

George’s explanation? Well, one might try to follow his backstory and understand the temporary blindness to how this would look. Just barely.

So why such loud boos over a 1 or 2K price adjustment? Is that all this is about? Nope.

The elephant in the room is something much bigger, and much deeper.

It is that this company represents something much more to those who follow and support it with their wallets, their words. and their goodwill.

To them, this company represents a break with the past. Technologically, ecologically, and yes, morally.

The world we’ve been living in is doing wrong on so many levels, and this company and its spirit carry the promise of turning some of that around.

These guys are our champions to help stop wrecking the Earth, stop eviscerating our economy, and stop cheating the common man.

But this episode reminds people of what they are so desperately trying to leave behind. It threatens to shatter the emotional equity we’ve invested in our champion. With that mantle comes a responsibility, a fidelity to principle. Ergo the unusually strong reaction.

I do believe this was an honest mistake. Stuff happens. There’s a lot of moving parts, all changing in real time and executives are actually, you know, human. But boy, was this seriously tone-deaf. Jeez, you don’t change the price after the deal is signed! What were ya think'n?

But that’s over, which brings us to now. Now ... it could go down in the history books as a marketing blunder that is truly epic - right up there with turning gold into lead. You so had them with the SC announcement, and then this? Talk about a major buzz-kill.

Or … instead it may become yet another compelling proof that faith in this company is totally merited.

And that, depends on what Elon and George do now.

So guys, here’s a suggestion for how to turn it around:

Acknowledge it. Fix it. Build on it. Like this -

1. Apologize for mishandling it.

2. If you had already signed a contract, it’s free.

3. If you finalize by December, it’s half price.

4. Website changes now to say it’s a $2,000 option.

5. New reservations can choose the option at the new published price.

This will cost something in the short term, but do the math, it’s not so bad. It would have been cheaper to do perfectly from the start, but now it is what it is. And for heaven’s sake, stop listing it as “included” when you now know you’ve got to charge more. Fill that box with an honest 2K number. This reaffirms that your ethics are still what we ascribe to you.

With this construct, people who trusted you early are rewarded with a price advantage. That turns grousing into gratitude. And you’ll be able to say with conviction that no one who committed money to you did so under a misimpression. Collectively, I think these actions are sufficient to turn things around and quell the discontent. And yet it protects the steady-state margins you need to succeed.

You can’t let a single screw-up dictate your margins, trash your price discipline, or define the strategy for positioning your models. You have to run a solid business. But neither can you cede your most precious asset.

How you administer price changes matters a lot. It telegraphs who you are: Either the new champions for our time … or just a retread of brain-dead cynicism.

Your reputation is irreplaceable. You got it with brilliance and earnest hard work, and it’s in the spotlight now because we're at a unique and fortuitous moment in history. Technologically - and ethically, you happen to be exactly what we need, right when we realize we need it. This moment won’t happen again. How much is that worth?

Right now, you own something so precious that few will ever attain it. You’re the heroes whom we all love. You wear the champion’s crown, and it’s yours to lose. But how you handle trouble defines whether you keep it.

A smart friend once said “Don’t trouble trouble, unless trouble troubles you”. Well, a hiccup has unintentionally invited trouble to your door, so it’s your time to stand up and define yourselves. You can shine if you choose.

This is not a money-thing. It’s a trust-thing.

Personally, I believe in you. I think you’re equal to this test.

Mark K;
eelton, elsewhere, also made the same basic suggestion, tho' he want ed to grandfather all current reservations at $1000 optional. You're being a bit more restrictive; my rough math says his option forgoes about $4 million by next July, when the current reserve pool will about be exhausted (my guess). Not bad considering the PR value, and the incentive to upgrade both 40 and 60 built in, which should more than compensate.

As I said on the other thread, "Justice must not only be done, but be seen to be done. Otherwise, the faith (aka trust) which underpins the system collapses."

If only there hadn't been those few days where the site and reps etc. said "included"!

Mark K - well said.

Detailed thread, including an elaborate response from George Blankenship, here:
http://www.teslamotors.com/forum/forums/supercharging-hidden-charge-60-k...

Mark K - Very well said, indeed!

A positive view of the long lead time for buying this car is enjoying the anticipation, the discussion with other future owners, and the updates on the Tesla website. But in the last week, it seems there are just bad surprises--first the maintenance costs, and then the 60 kWh Supercharger going from "included" to "$2000."

I'm starting to dread hitting the refresh button, for fear of what's next!

Before the SC announcement we didn't know how much it was going to cost to charge. Then Elon unveiled that it would be free for the 85 kWh cars and for a nominal charge on the 60 kWh cars. That is what he said. Everyone thought he made a mistake because the web page said included, but it didn't say charging was included. $1-2K is still a fantastic deal to get unlimited charging. And it is an option. If you don't plan on using the network you don't have to get the option. By getting the 60kWh cars you save 8000 dollars compared to the 85kWh battery and still get to use the charging network. That isn't that bad.

If I was on the fence about getting the 85kWh I'm not anymore. My vacation plans will now involve more road trips enjoying my new car.

Mark, thank you for a fantastic letter. It was so well said and your solution makes great sense. This is an exercise in principle and validation of our trust.

So how much do you think you should pay for Supercharging your car? I am guessing that everyone, including the 85s, expected to pay on a per usage basis as opposed to prepaying for unlimited use. As a Sig holder, I did not expect that I would get free access but was hoping that it was one of the Sig benefits.

My interpretation was the supercharger would be an option that would make one capable of supercharging. But, I never got the impression from any paperwork that it would include the actual supercharging for any of the versions.

It looks to me like they decided to do a one time activation fee instead of incremental charges. I could see the incremental charging system becoming very expensive to implement and maintain. That might be why they decided to drop the incremental fee idea.

Even though I am a 40kW reservation holder, I feel that this is not such a good move. Initially, I had it at 60kW and the only reason was the ability to use supercharger. My later calculations made me realize that it would rarely use a supercharger. And even when I do, it doesn't make much sense.

But, I do feel for those who believed that this is included in the 60kW. I guess there were others whose primary reason to upgrade to 60kW is the included supercharger hardware. Now, telling them, "It's free, but not completely free", is not a good move.

They should have left it at TBD. And then no one would have had any issue. Pay-as-you-go too would have been a good option. How can setting up a payment processing system be an issue? That too from the founder of Paypal. I just don't believe it.

May be it is an Apple thing. Give the hardware for affordable (?) price. But, charge to use it.

Will I be paranoid to think that there will be more such required charges to use included items? $600 per year, for the first 4 years for minimal maintenance, $2000 for included supercharging. What next? - $500 to use the center console? $200 to be able to start the car? $2000 for replacement tires?

I have some Tesla stock, and I am one of the ardent supporters. Almost everyone that knows me knows about Tesla. In fact, at my workplace, some folks know me just because I am such an avid supporter of the firm and their cars. Now, I feel as if I am being let down.

Every time I look at my wife and "explain" to her that this car is worth our hard-earned money, even if we use the T to go everywhere, I feel a tinge of guilt - the guilt that comes with trying to be honest, but knowing that you aren't completely honest. Deep inside me, I know that I am giving Tesla a lot of leeway whenever these things happen.

I know that I absolutely love this car and really want it. I can be selfish and claim, "Well, this cost doesn't affect me. So, it isn't a big deal". If only that were the case, I wouldn't be buying an electric car in the first place.

May be it's time to draw a line and stick to it.

That's my rant. May be, I will cool off in time.

~ Prash.

I meant to post here:

Mark, well said. Elon, George, are you listening? We arent just a bunch of clucking voices in the blogosphere. We're more than just your fans, we are the few who have committed with hard dollars. We are your validation. I have a signed contract for a 60kwh with delivery expected in January. I have a 2 year old Acura that has 24k miles on it. I could easily drive it for another 5 years for peanuts. Instead, after I sell the Acura and apply the credits, I'll spend another $45k out of pocket for my Tesla. Clearly, this is not a wise financial decision. Its not about the money. I'll pay $1K for SC even though I may never need the SC. It seems silly not to have it, and it will kill resale if I don't. Still, I feel cheated. I have a signed contract, and I upgraded to the 60 in part because I was informed SC was included. Standing alone, $1k or even $2k isnt out of line, but its not the deal I chose, and I'm offended that George's letters dont even acknowledge the change in terms. Gentemen, understand what motivates customers like me, and you'll understand how disappointing this move is. You may still have my money, but I'm not so sure I'll be part of your sales team anymore.

Just curious. If you bought an ICE today and was told you get have a free gas card for the life of the car that was transferable to the next owner would you jump at that?
How about if they said there was a $1000 fee to activate and register the card?

My paperwork clearly says "Supercharger Hardware". When I read that I knew there was going to be a hidden fee for using the SCs. I am glad there are no usage fees. I wish Elon could snap his figures and all the SC would appear tho :-)

For those that have no signed contract yet and have to pay $2000.... well that's just how the cookie crumbles. You are in no position to lose anything. Just cancel your reservation and get your deposit back. If enough people do that Tesla may change their mind.

I feel I have to chime in as well. I am a huge fan of Tesla and I am one who is spending much more money than I ever have or probably ever will spend on a car again. Cars for me are usually just a mode to go from point A to point B. I have many reasons for buying a Model S Signature Performance. For one, I believe Tesla is poised to make a change in the world that almost everyone said they couldn't do. I am investing in their dream, vision, integrity, as well as an amazing car. They are bringing a new business model to the auto industry that has not been seen. They have turned a potential and existing customer base into a free marketing and sales machine unlike anything I have ever seen. Creating brand loyality like that is priceless.

So now Tesla is at a crossroad. They made a business decision that their loyal customers are very unhappy with whether it impacts them directly or not. Does the increase in revenue they feel they need really offset the damage to their integrity and brand? I think not. Will I cancel my order no matter how this plays out? No. I also doubt I will use the super chargers much but that isn't the point.

Tesla claims they really listen to our feedback. I believe they do. Will they go the direction of Netflix and Bank of America where they are finally forced into a corner before recanting an unpopular business decision? That remains to be seen. I'm sure Netflix wished they had a "do over". Tesla needs to get so much right at this juncture. This is just another one that needs to be right. Covering the $1000.00 for those who were not made aware of the upcharge should be looked at as an investment in the rest of us who are out there selling and marketing their products for free. At this point I too am a bit less enthusiastic.

Website now updated to correctly list 60KWH supercharger as "Optional".

That's good progress. Thanks for caring TM.

Hope you'll soon address the folks caught in the gap during the price change.

BTW, as a P85 guy, personal interest is not part of this for me at all.

Just very much hoping you come out of this stronger, and your sterling brand remains untarnished.

" Just cancel your reservation and get your deposit back. If enough people do that Tesla may change their mind."

right on

Another person here that Tesla has lost as a personal sales person. All this time I've been touting that I"M GETTING MY TESLA IN DEC! After this announcement and the required maintenance fee, I'm not such a happy camper for Tesla. I'm still going to get the car because I love the car and what this could mean for the industry in general. But Tesla has got to stop charging more and more for something I've already signed a contract for.

mboedigh;
re 'not on the fence anymore' about getting the 85 -- wonder how many similar decisions will now be made?

prash;
The pay-per-use was not technically infeasible, just administratively complex (and adding permanent overhead) and an opening for hassles. KISS

@brianh

In this day and age of e-commerce I do not think it would be that complex to implement a pay per use system for the superchargers. I am pretty sure Superchargers are "connected" and Tesla can monitor them remotely.

Easiest way is to put a transponder on the windshield linked to a credit card and you get access to the superchargers. There would be no administrative burden, this can all be done via the TM website. This type of collection system has been used for almost 20 years and services millions of commuters everyday.

@SMOP | SEPTEMBER 29, 2012: Easiest way is to put a transponder on the windshield linked to a credit card and you get access to the superchargers. There would be no administrative burden, this can all be done via the TM website. This type of collection system has been used for almost 20 years and services millions of commuters everyday.

Probably even easier is to read the VIN number of the car through the charger connector. I'm sure there is a communications protocol between the super charger and the car. If the VIN were to be sent, it could be matched to a database. Or billing information could also be entered from the touch screen and either transmitted through the connector or through WiFi at the station.

Who can claim with a straight face that splitsec002 is a "whiner". His disappointment is rational.

Guys, I know you're busy hashing this out right now. These two case studies might be worth remembering at a time like this:

1. McNeil Labs and Blame

The textbook example of public confidence crisis management: When a terrorist poisoned some bottles of Tylenol, McNeil sprang into action and pulled every single bottle from store shelves ($60 million worth) to defend their brand. In this extreme case, McNeil was clearly not at fault, but still took full responsibility to protect their customers. Because he was unconcerned with proving that his company was blameless, the J&J CEO acted quickly and was widely recognized for saving the company.

2. Apple and Price Discontinuities

In 2007, at the introduction of iPhone, Apple made an abrupt change in price from $599 to $399 within a few months of launch. Early adopter Apple fans were livid, feeling betrayed for their loyalty. Steve Jobs personally intervened within the first few days. He acknowledged the issue, expressed empathy and offered a gesture of a $100 gift certificate. While only half the difference in price, the move was seen as an appropriate gesture of goodwill. The fans felt acknowledged and appreciated, and the furor subsided. Needless to say, the nascent iPhone effort, (which was more precarious than most folks realize), went on to achieve a certain degree of success.

In both cases, the response latency was a key factor in a favorable outcome. Once you've vetted a solid plan to respond, alacrity is your friend here.

Earning back trust is much harder than not losing it. A quicker resolution stems the loss.

Key fob unlocks the supercharger. Easy. Works for the car door.

AlexK,

From my understanding of the Supercharger, the actual cable is hidden behind a retracting partition. In order for this partition to retract open, the car must be authorized.

GeorgeB on the other board said that using the Model S screen to input billing information was studied, but they thought spotty cell reception could lead to frustration for the customer. I do not think these superchargers will allow for a WiFi connection for Model S Customers.

Candidly speaking, I would not be surprised if every 60kwh Model S has access to these Superchargers (with or without paying). Tesla has in the past bundled in functionality in vehicles that should not have been included (i.e. Homelink in Roadsters without the tech package). At this point they may be just looking to pick up some extra revenue; they may not plan on enforcing "access" rules.

@jbunn@hotmail.com | SEPTEMBER 29, 2012: Key fob unlocks the supercharger. Easy. Works for the car door.

The keys have to be paired with the electronics in the cars. I don't think the keys can be paired with multiple cars or charging stations. And if they could be paired, then this process would require pairing which could not be done ahead of time. I suppose the stations could just respond to some kind of transmission from the fob, but that does not seem secure to me.

Mark K: I posted in another thread a very relevant event that happened with Apple and an old Iphone.

"You're right again, Apple and Tesla is being scrutinized on every little bit of information they give. Maybe that's why they keep us in the dark for the most part. Apple on the other hand is 100% about customer service and I believe that is one of the reasons they have such a large following. I ruined my Iphone once. But it was still under warranty. What did Apple do? They emailed me a label to overnight my old phone to them to repair. I guess they couldn't repair it but instead of giving me some excuses about warranty they overnighted me another refurb phone that looked brand new. After that experience I knew I would be taken care of by them and haven't had another manufacturers phone again. This was back when The original Iphone came out. Since then I have had a 2g, 4, and now a Iphone 5. I even got an Ipad for a birthday gift that I love.

And that folks is how companies create brand loyalty."

I sincerely hope Tesla responds to keep their early adopters. This isn't just about selling cars. With thousands of happy or unhappy customers, their image can change fairly easily.

But if history is an indication Tesla will not budge once they have made their decisions.

@Alex K, splitsec002;
The technology isn't really the issue. The admin and overhead of handling thousands of small ($5-15) transactions ain't worth it. Letting SC offset its solar panels against charging and keep the diff is much more elegant for all concerned.

One thing that bugs me is when this company offers something like SC for free, and people on this site offer ways to be charged for it. What is that about? Seems to me I will enjoy not having to pay. Please stop offering money for things that we don't have to pay for, like SC.

Alex -- I don't think the keys can be paired with multiple cars

Several two-car Prius owners have paired their fobs to both cars, so that's not a problem. Bear in mind it is the Security ECU in the car that has the pairing information, not the fob.

You're correct that each each SC would need to be paired individually, unless they were all tied together (which would be costly and error prone) so it's not a practical alternative.

bsimoes,

I don't think anyone is actually saying they want to be charged more. They are saying charge us later when the SC network is actually useful. It will be two years before folks will be able to use the SCs (unless they stay in California), and that's if Tesla installs them within their stated timeframe. So far no charging station company has been able to pull that off*. Tesla might be the first to do so, but I'm not holding my breath.

* At the introduction Leaf dog and pony show (spring 2011) EvGo said they would install over thirty chargers in my area (DFW) by that September. There are now thirteen.

You could buy the hardware and wait to pay for the software. I don't understand how there could be any other solution. Just give the hardware for free? Have you looked at their financial situation?

prash.saka and alfafoxtrot1 I feel your pain...

Remember you're dealing with corporate America first and foremost, TSLA promised investors gross margins of 25% in 2013 when rest of industry is battling for single digit margins, what does imply? It means they will nickle and dime you and get you over barrel... yes, believe it they need to make those ridiculous margins.

It's green, it's electric, it's saving our planet, it's the future, it's new way thinking about automobile... I get all that but we want 25% GP! aka we're also greedy.

To get to 25% GP they will charge you extra for everything... including $600/yr for mandatory service (or risk not having warranty...) and $2,000 extra for SC access on 60kWh, it's just beginning folks.

As for those loving the free super charger network... think about it, they putting up 100 SC in couple years at 250K pop that's only $25M, they just raised almost additional $250M this week via deal w Goldman to raise more equity diluting existing share holders value btw.

So yeah, leasing a little Chevy Volt at $260/mo w only $2,500 down all of sudden doesn't seem like such a bad deal as oppose to paying $2,000+/mo to fully finance a 60kW Model S.

I use to be biggest TSLA fan in California, it's changing fast.


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