At Annual Shareholders’ Meeting, Tesla CEO Elon Musk Clarifies Tesla Model 3 Supercharging Policy

Ever since the Tesla Model 3 was unveiled at the end of March, there’s been some confusion over the level of charging that will be included for free when the Model 3 starts rolling off the production line.

That’s because while Tesla CEO Elon Musk promised that Model 3 would come as standard with the necessary hardware for both Tesla Autopilot and Supercharger functionality — just like every Tesla Model S and Tesla Model X made today — he didn’t specifically state if both features would be enabled free of charge or if Supercharger access would be free at the point of use to every Model 3 owner.

Model 3 Supercharger access won't be free.

Model 3 Supercharger access won’t be free.

It was an ambiguity that we and plenty other news sites picked up on, cautioning readers that it was likely, given the sticker price of Model 3 and the amount of investment Tesla has made in the Supercharger network, that Supercharging would likely be sold as bonus or add-on feature. This, we argued, would help prevent Supercharger abuse (where customers choose to charge up at their local Supercharger free of charge rather than at home) while also granting access to the network for those who really needed it. To make it even more useful and cost-effective for owners, we even suggested Tesla might consider offering Model 3 customers ad-hoc membership for the occasional long-distance trip, essentially turning Supercharger access on and off via a paid, time-limited over-the-air update.

Customers who lined up to pre-order Model 3 will have to pay extra for Supercharging.

Customers who lined up to pre-order Model 3 will have to pay extra for Supercharging.

While many Tesla faithful voiced outrage that we would suggest such a thing, it turns out that we were right. At least, we were right about Tesla not offering Supercharger access free of charge to every single Model 3 owner.

Confusion over Model 3 Supercharger access was cleared up once and for all yesterday during Tesla Motors [NASDAQ:TSLA] Annual Shareholder Meeting, at which Tesla CEO Elon Musk discussed in depth Supercharger access for existing and future Tesla owners. When asked by a young Tesla owner and shareholder named Hydan if Tesla planned to continue its policy of free Supercharger access for life for Model X and Model S owners beyond Model 3 launch when there  “are upwards of five hundred thousand million cars out there,” Musk gave a thorough, comprehensive explanation of Tesla policy.

“To date, we wanted to make it really straightforward and easy, so that’s why the Superchargers are set up, at least to date, for those who have bought the car as free for life,” Musk responded. “Fundamentally that has a cost. I don’t want to make this a big headline, but the obvious thing to do is to decouple that from the cost of Model 3. It will still be very cheap and far cheaper than Gasoline, but it won’t be free long distance for life unless you purchase that package.

“I wish we could… but in order to achieve the economics it has to be something like that,” he continued.

While Musk declined to give specifics, this suggests that Tesla will offer free, unlimited Supercharger access to Model 3 owners via an add-on package specified at the point of order, just as it once did with early Tesla Model S 60 cars. While there’s no mention of price, we’d suggest, based on previous pricing policies for the feature, that it would likely come in at between $2,000 and $3,000 for pre-order specification and attract an additional $500 premium for post-manufacture setup.

Model 3 owners will get the chance to use Superchargers -- but as an add-on package.

Model 3 owners will get the chance to use Superchargers — but as an add-on package.

Why not offer it as standard? In a nutshell, it’s all to do with entry-level pricing as well as potential Supercharger abuse. Continuing the conversation, Musk — and Tesla Chief Technical Officer JB Staubel — clarified Tesla’s position further.

“I want to emphasis what Tesla’s motivation is: to make electric transportation as affordable as possible. That informs all our actions,” Musk said. “If we charge for this or charge for that it’s not because we want to make things more expensive. It’s because we can’t figure out how to make it less expensive.”

At the moment, Supercharging is factored into the cost of Model S and Model X. Drivers essentially pay a premium up-front for the privilege of having “free fuel for life”. When building a luxury premium car, adding a few thousand dollars onto the sticker price is a far smaller percentage of the overall cost of the vehicle than it is when the car costs less.

Were it included as a standard-build item, that cost would invariably push up the Tesla Model 3 entry-level price, something Tesla is going to great pains to ensure doesn’t happen. At $35,000 before incentives, Model 3 is the most affordable car Tesla has designed. Since not every customer is going to use or need Supercharger access on a daily basis, it makes more sense to make it a add-on feature for those that want it, keeping the entry-level price low for everyone else.

Of course, we’ve seen this strategy used by Tesla before with regard to Autopilot too. Rather than make it a standard feature on every model, Tesla includes the hardware, offers free advanced safety features to all owners, and makes Autopilot part of Tesla’s $2,500 technology package.

Supercharger infrastructure is costly to install.

Supercharger infrastructure is costly to install.

Cost to consumers isn’t the only reason Tesla isn’t planning on offering Supercharger access for free to Model 3 owners, either. Cost to Tesla is an important part too. Building Supercharger stations is expensive and the more cars on the road that require Supercharger access, the more Tesla has to invest in it. Right now, that investment is something of a loss leader. What’s more, Tesla is learning the hard way that some Tesla owners are abusing the system, using Superchargers to charge on a daily basis rather than charge at home.

It’s something that JB Staubel told Tesla Shareholders wastes customer’s time too.

“It pains us to see people misvalue their time at Supercharger stations so often,” he said, noting that Tesla frequently sees customers fail to charge their cars at home to then drive to a Supercharger station, where they then spend upwards of half an hour charging their car before going on to their destination.

“It’s far more convenient and faster for you overall to charge at home or at work,” he continued. “It takes one second to plug in and you don’t have to go to a separate location and wait for the car to be there.”

It’s a message that Tesla has worked hard to send in recent months: Supercharger access is not a local gas station that owners should use for their daily driving needs. It’s an occasional service designed to facilitate long-distance travel when an overnight charge is not enough to satisfy daily needs. With a range in excess of 200-miles available on even the entry-level Tesla Model S 70D and Tesla Model X 70D, it’s a message that makes perfect sense, too.

Here at Transport Evolved, we think Tesla’s policy on Model 3 Supercharging makes perfect sense. In everyday driving, we rarely exceed the range of our staff electric cars — and not a single one can easily travel more than 80 miles on a single charge — even though we’re considered ‘high mileage drivers’ when compared to the U.S. average. As long as Tesla makes Supercharging available for those who need it on an occasional basis without requiring them to permanently enable it, we think the majority of both those who want it and those who genuinely need it (however infrequently) will be satisfied.

As always, there are some fans who are up in arms over Musk’s decision. Some are even threatening to cancel their Model 3 reservation. Sadly however, there’s rarely such thing as a free lunch.

Do you think Tesla is acting appropriately regarding Model 3 Supercharging? Will you be happy to pay extra for the facility? Or are you infuriated by this latest disclosure?

Leave your thoughts in the Comments below.

 

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  • Chris O

    Completely getting rid of the “free to use” theme doesn’t strike me as smart. Obviously there is high cost involved in maintaining charging infrastructure, but normally there is also high cost involved in marketing and the “free for life” slogan was pure gold from a marketing perspective.

    So I expected a conditional free to use policy, the conditions being no free use of local superchargers (charge at home already!) and a
    (steep) fee for keeping a Supercharger stall occupied after a certain amount of time, say one hour. Excluding the free use of local chargers would in practice result in people only occasionally using those “free to use” rights as people just don’t venture beyond the range of a 200+ mile vehicle very often, so actually charging money for that will not amount to much, definitely not enough to compensate for the marketing value of the “free for life” slogan.

    Guess Tesla is confident Model 3 will sell without any free stuff and always charging for charging is no doubt an easier to implement way to counter abusive practices than what I’m proposing.

    • Martin Lacey

      Some folks will buy an all you can eat buffet and then try to eat for a soccer team – just so they “get their monies worth”. Once someone has paid a fee for Supercharging and abuses the system it is very difficult to cancel the agreement without the customer suing!

      • Chris O

        Hence my suggestion to keep the “free for life” theme but exclude local supercharging. If the closest Supercharger that allows you to use it for free is at least 100 miles from your home there just isn’t much scope for abusive practices.

        • Martin Lacey

          My nearest Supercharger is currently over 100 miles away, I’d hate to not be able to use that!!

    • Martin Lacey

      Watch the video… Elon Musk said that they have decided to decouple supercharging from Model 3. Nothing was said about S or X. They have not “completely” got rid of “free to use”!

      • Chris O

        I was well aware that it only pertained to Model 3, but I edited my post to make that more clearly.

    • Loanword Eggcorn

      Elon hinted at a pretty good explanation: the economics of free charging for some millions of Model 3s probably doesn’t work. Pay as you go or paying up front for a Supercharging option probably makes better economic sense for an EV priced solidly in the mainstream.

      Keep in mind there is already congestion at some Supercharger sites with ~70k Model Ss on the road in the U.S. Note however that there will be more chargers installed by the time Model 3 rolls out, both from Tesla and from other charger networks.

  • Dennis Pascual

    I think that it is consistent with what Tesla has done. The rare Model S 40, for example was not allowed to be upgraded to Supercharging. HOWEVER, it can be upgraded to a Model S 60, AND then upgraded again to include supercharging (all via software.)

    The “free trial” that Tesla has done for Autopilot capable cars has ensured some conversions to having that package implemented post sale as well.

    As with all things Tesla, it is often cheaper to enable these features at build than “after sales”. And for those that wish to finance these options, it is also easier on “cash flow” to lump it all at purchase and just pay for the feature as part of the car’s monthly payment.

    • Loanword Eggcorn

      One of the reasons for not allowing the Model S with the smallest battery pack to Supercharge is that it’s physically not able to take in as much power as the larger packs. It takes two to tango, and the battery pack must be able to accept high power in order for fast charging to work.

      • The S 40 shipped with a 60 kWh pack that was software limited to 40. Tesla did not limit supercharging on the 40’s due to pack size, there were other reasons.
        Of course, pack size affects high power charging in all EV’s, but that was not the reason Tesla didn’t allow it on the 40’s.

  • G-Man

    I have a model 3 reserved and the decision to not include free supercharging really doesn’t bother me. I never expected free petrol from each of the manufacturers when purchasing new cars before, so I had no preconception that Tesla should do the same.

    • Loanword Eggcorn

      Agree completely. There is already congestion at some of the superchargers with about 70k U.S. Model S. With a million Model 3s on the road, there would need to be some way to efficiently allocate charging resources. Granted there will be more public chargers of all kinds in place by the time Model 3 rolls out, including more superchargers, but even double the number would result in congestion if the many Model 3s could charge for free for life. I would be perfectly happy to pay a few dollars to Supercharge. The energy cost to drive electric is about 1/3 that of gas or diesel.

      Also, as you note, most people charge at home overnight and have a full tank in the morning. It’s very convenient.

      • Joe Viocoe

        There might be a better way…
        ——————————————
        The Scheduling Model is more focused on eliminating abuse in the form of people using it much more often. It covers more edge cases well.
        For instance… many people will still abuse local charging if they have the money. Yeah, higher costs is a disincentive… but some people will pay more and still take SC stalls away from the long distance drivers who need it.
        The Scheduling Model:
        Every Tesla has a computer navigation system with up to date software. For holidays and heavily congested Supercharger locations, Tesla is already looking to provide Supercharger status updates at the very least. This model would be an extension of that.
        Drivers are prompted for a Supercharger Reservation when below a certain threshold of battery capacity to schedule a supercharger slot (or can select in the menu at any battery capacity) . The car knows the current route, the nearby SC locations, the estimated time of arrival at the SC, and the estimated duration at the SC.
        This ensures that every driver can be confident to get a charge.
        Priority for these reservations are handled on a Tier basis.
        Tier 1 can be for drivers who are in need of a Supercharger because of battery level. (road trips entered into the Nav system)
        Tier 2 can be for drivers who selected the option to schedule a SC visit, but don’t have an immediate need based on battery status. (1 hour ahead of time)
        Tier 3 for drivers who have
        1) Used the SC network X or more times in Y days
        2) Have cancelled previous reservations
        3) Loitered in SC stall after charging is complete
        4) Otherwise abused the SC network
        Priority can be given to Tier 1, with Tiers 2 and 3 on standby. Tier 3 can be bumped by Tier 1 drivers.
        Even Tier 3 can be given sub-tiers if drivers further try to abuse the system.
        Once a vehicle starts charging at SC stall, the reservation is complete. So nobody is getting throttled or ended before the charge is complete.
        But drivers may not even get to start charging, unless given a reservation first. And if driver is at Tier 3, they may not get a reservation at a popular SC station.
        One great benefit, is that Apartment/Condo dwellers won’t be cut out of the system, nor will they have to budget for charging costs. They simply have to charge at times that do not interfere with higher tier drivers. So no penalties for drivers living close to SC stations that hardly get used.
        Another benefit is to avoid a pay system completely, since some people can simply afford to abuse the system. There would be double resentment if drivers were to see the same car blocking a stall every time… even with a pay system.
        Maximize utilization, minimize abuse, and keep the same cost promise.

        • Loanword Eggcorn

          It’s an interesting idea, scheduling and prioritizing for a scare resource. Better would be if it weren’t scare, but agree that adds cost, and better utilization of existing resources could be achieved with smarter usage. Also keep in mind that the number of chargers is not static, but growing. I suppose the question is whether they’ll grow fast enough to keep up with demand from Model 3.

          On the bright side, it’s a good problem to have if it means there are many more EVs being used instead of combustion cars.

  • Martin Lacey

    Makes sense to me.

    I like the idea of “pay as I go”…. that is buying supercharger convenience once or twice a year for longer trips across country. I hope Tesla offer this option!

    I expect to do the bulk of my charging at home anyhow and didn’t want the cost hidden in the purchase price. If the price is right I might add permanent use of Supercharging, especially if it helps resale value, but personally I can take it or leave it.

    Early adopters of Tesla S (70 and above) were rightly rewarded with free for life (of vehicle ownership) use of Supercharging. It’s a privilege and not a right!

    • Joe Viocoe

      The problem with a pay-as-you-go system, is that it does not pay for the capital expense of building the stations.
      People take for granted the fact that gasoline stations have had a long history of industry subsidies and the cost is amortized over the entire infrastructure.

      If Tesla were to offer a pay-as-you-go system, few would want to pay the whole amount upfront, because everybody will think that they won’t need to use it as much. This will result in a serious deficit of capital which will need to be made up with an extremely volatile and high price in the pay-as-you-go system.

      • Martin Lacey

        Yes and no!

        I doubt it costs anywhere near as much to build a supercharger as a conventional gas station. The electricity is produced locally (solar/grid mix) and not mined, refined and shipped, making the product much cheaper and fixed pricing allows Tesla to set their own KWHr “pump” price with significant confidence. Gas stations face daily fluctuations in pricing.

        I would expect to pay a premium for the convenience to travel further than my EV range would usually permit.

        Think about your argument in terms of mobile phones…. the operators either charge a contract fee or bill you for every second as you use it (normally you pay upfront for $x credit). Pay as you go is more expensive and contributes to profits. Contract allows the operator to work within a budget to meet current needs and expansion plans.

        Plenty of Model 3 buyers will pay the additional for supercharging. Tesla have not said they will remove free for life supercharger use from Model S/X purchasers. S/X production is ramping up… meaning loads of money for supercharger upkeep and expansion.
        🙂

        • Joe Viocoe

          I think Better Place showed the flaws in trying cell phone type subscription services for EV charging.

          • Martin Lacey

            Yes Better Place failed for several reasons….
            1) Too soon to market
            2) Too many “trials” of the product in too many places
            3) Not enough cash

            In reverse:
            3) Tesla has a continual inflow of cash allocated from ongoing vehicle sales of S and X for Supercharger development
            2) Tesla have already past the trial stage and is adding monthly to the Supercharger network
            1) Tesla appears to have either made it’s own market or more likely weathered the financial storm which nearly wiped them out. Irrespective they are still in the market

            The following is conjectural:
            If they continue their rate of addition to the Supercharger network it will make them the dominant EV charging network, which then makes other manufacturers more inclined to sell Supercharger enabled vehicles…. now that would make an interesting board level discussion between Tesla and GM who have no intention of contributing to a charging network.

          • Loanword Eggcorn

            Battery swapping isn’t really needed since most people charge at home overnight. It’s also not really needed where a fast charging network exists. There are several other reasons why it’s not too practical.

          • Martin Lacey

            Battery swapping was a California incentive which Tesla met…. in theory. They demonstrated it live and built a service bay to facilitate it. But haven’t proceeded to customer roll-out. I don’t know if they got paid the incentive money for going that far.

            Pundits were saying around that time that it would cost $500k to build a charging station with battery swap bays, which is probably where assumed high cost of a charging station stems from.

          • Joe Viocoe

            Yes better place failed for several reasons, only one of which was the subscription system that they assumed that people would jump all over.

            Even now, before Tesla’s supercharger has become the de facto standard …. There is an open offer for other automakers to join the protocol. But the other automakers have been told that they would need to help pay for the buildout. This is another indication that a pay-as-you-go system is not going to be on the table. But rather Tesla is looking for upfront money to build out the stations.

      • Loanword Eggcorn

        Pay as you go for occasional long road trips would work perfectly for me. The funds from pay as you go can be used to add infrastructure where the dollars show it’s needed. Tesla’s existing Supercharger network is already viable and can and will be expanded.

        Battery swapping isn’t really needed since most people charge at home overnight, and where a fast charger network exists.

        • Joe Viocoe

          It’s too occasional for Tesla to rely on that money for building the actual infrastructure.

          Listen to what Elon actually said about making the economics work.
          I’m sure consumers like yourself would prefer it, but Tesla doesn’t.

          folks would rather pay only for what they use…. I get that. But people have to understand that they are paying for the peace of mind knowing that the station will be there ready and built BEFORE it’s needed.

          Like any 911 or emergency services, it has to be paid for well in advance before it’s needed. It is too important that it be done beforehand to rely on the company just investing in it and hoping that a pay-as-you-go system recoups the money.

          • Loanword Eggcorn

            Understand what you’re saying. Indeed there is somewhat of a chicken and egg problem in how to pay for deploying chargers before they’re needed.

            I may not have been too clear, but I was trying to hint at the possibility of adding chargers to existing stations, as needed based on usage patterns. Point being that there are existing stations and some incremental upgrades to the existing charging infrastructure are possible.

            Also, in doubling the number of chargers by the time Model 3 rolls out, some of those may be at new stations. Tesla is continuing to deploy new Supercharger stations.

  • Joe Viocoe

    It isn’t a binary decision between a “pay as you go” system vs “free for all”.

    ——————————————
    The Scheduling Model is more focused on eliminating abuse in the form of people using it much more often. It covers more edge cases well.
    For instance… many people will still abuse local charging if they have the money. Yeah, higher costs is a disincentive… but some people will pay more and still take SC stalls away from the long distance drivers who need it.
    The Scheduling Model:
    Every Tesla has a computer navigation system with up to date software. For holidays and heavily congested Supercharger locations, Tesla is already looking to provide real-time Supercharger status updates at the very least. This model would be an extension of that.
    Drivers are prompted for a Supercharger Reservation when below a certain threshold of battery capacity to schedule a supercharger slot (or can select in the menu at any battery capacity) . The car knows the current route, the nearby SC locations, the estimated time of arrival at the SC, and the estimated duration at the SC.
    This ensures that every driver can be confident to get a charge.
    Priority for these reservations are handled on a Tier basis.
    Tier 1 can be for drivers who are in need of a Supercharger because of battery level. (road trips entered into the Nav system)
    Tier 2 can be for drivers who selected the option to schedule a SC visit, but don’t have an immediate need based on battery status. (1 hour ahead of time)
    Tier 3 for drivers who have
    1) Used the SC network X or more times in Y days
    2) Have cancelled previous reservations
    3) Loitered in SC stall after charging is complete
    4) Otherwise abused the SC network
    Priority can be given to Tier 1, with Tiers 2 and 3 on standby. Tier 3 can be bumped by Tier 1 drivers.
    Even Tier 3 can be given sub-tiers if drivers further try to abuse the system.
    Once a vehicle starts charging at SC stall, the reservation is complete. So nobody is getting throttled or ended before the charge is complete.
    But drivers may not even get to start charging, unless given a reservation first. And if driver is at Tier 3, they may not get a reservation at a popular SC station.
    One great benefit, is that Apartment/Condo dwellers won’t be cut out of the system, nor will they have to budget for charging costs. They simply have to charge at times that do not interfere with higher tier drivers. So no penalties for drivers living close to SC stations that hardly get used.
    Another benefit is to avoid a pay system completely, since some people can simply afford to abuse the system. There would be double resentment if drivers were to see the same car blocking a stall every time… even with a pay system.
    Maximize utilization, minimize abuse, and keep the same cost promise.

  • Richard Preston

    I never did expect Tesla to meet the 35K price point and also provide free supercharging. This is just one of the things that will have to be dropped if the price isn’t to escalate beyond the promised holy grail. Be interesting to see what else gets dropped/becomes a chargeable option.

    • Free supercharging was never promised for Model 3, so it’s not been “dropped”. It’s important to be factually accurate when stating these things, as FUD has a way of spreading.

  • Model S owner and 3 reservation holder here.

    I was one of the people who commented on the previous article on the same subject to this one posted just after the reveal of the 3 that speculated about the supercharging options that Tesla may provide. Credit is due to Nikki and team for their good guesses.

    I personally strongly feel that a fixed “infrastructure” charge should be a requirement before enabling supercharging. The reason is that I would prefer Tesla have adequate money rolling in to fund continual improvements in the existing superchargers and adding new. We don’t yet know what Tesla will charge either fixed or per-use or variable for this capability, so it’s still a big speculative at the moment.

    We’ve done 20000 km in the past year, 4000 km of that was supercharged, 2000 km was destination charging (mostly hotels) and of course the vast majority in our garage overnight. Home charging is great for ease of use and is low cost due to cheaper overnight electricity rates here in Ontario.