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"Included" Supercharger Costs $2K Extra

"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.

Brian H | October 1, 2012

Some of the info is in the FAQ email, some in an early-week post by George B which I can't now locate (removed?), saying that the "activation" was much more involved than throwing a switch. It would be interesting to get his (or a product engineer's) summary of the process.

It's also interesting to look at this from a financial point of view; that is, the margin on the 85s is adequate to absorb the SC hardware, etc., but pushes the 60s' down below acceptable levels. That's, IMO, a result of the original concept of the SC network -- essentially an extender for the highway / LD version of the car, the 85. I gather that half or more of current reservations are for 85s; if that were to continue, the focus on them as the bulk of the users of the network would be even more, probably.

DouglasR | October 1, 2012

@olanmills,

You are aware, aren't you, that Tesla has reversed itself and agreed to give free SC access to those with SC hardware "included" in their signed MVPA? Because your post reads as if Tesla had not changed its policy. There is now no more 50% discount. See http://www.teslamotors.com/forum/forums/update-supercharging-and-60-kwh-...

jbunn | October 1, 2012

Hi Olan,

Nah, you missed the mutiny.

The issue was 60 pack folk with signed MVPA's had a zero price for supercharing, and Tesla approached us Friday asking us to sign new MVPA's with a higher price. It was pitched as half off, but in reality was 1,000 in a price bump. That more or less lit the fuse.

Tesla on Sunday reversed course and went back to the origional MVPA's we 60's signed over the last month or so. As far as I'm concerned, I'm chalking this up to a misunderstanding (as one of the affected), and I consider the matter closed.

What turned out odd however is that free charging is now included. None of the 60's ever expected that, I don't think. Seriously, who buys a car and assumes it comes with free gas for life?

Anyway, Tesla made good on their origional word, and we got something quite valuable and unexpected.

I have been a huge fanboy for years. And a really cranky MVPA holder for one long weekend. But it ended well, and there are lots of folk on the forum, myself include that were allways impressed, but we've been taken to the next level.

Hope this helps.

olanmills | October 1, 2012

Thanks for the corrections. Yeah, I haven't visited the forums for a few days, and I'm thinking I should make that a more common practice, given the amount of time I've just "wasted" tonight.

Yeah, I didn't really think about that, with MVPA's signed, it definitely feels like Tesla needs to stick to that in those cases.

@BrianH, yeah I understand that enabling and installing the supercharger must add some cost to Tesla, but I highly doubt that the costs break down to $1000 + $1000 exactly as described in some email that I read in some thread. And I also highly doubt that the total cost is exactly $2000. Tesla is either making a profit or taking a loss on this feature. And who knows, maybe this profit or loss may be better or worse with the 85 kWh battery. The upgrade price is $10,000, but I'm assuming the difference in battery costs over the 60 kWh is significantly less than $10k.

Brian H | October 2, 2012

olan;
Yeah, there are other differences, but as someone has now figgered out, it means the "bump" from a 60 with SC to an 85 is now just $8K. Which should result in a higher % of 85s on the road.

DouglasR | October 2, 2012

@Brian H,

Of course the "bump" drops to $8k only if you plan to order the SC option. When I was ordering, I struggled with a similar choice when thinking about getting the Performance model. At first glance, the difference in price appeared to be $10k. But I wanted Active Air, which dropped the difference down to $8,500. Had I wanted the 21" wheels (I didn't), it would have dropped the bump to only $5k.

As you "predicted," I ended up getting the Performance model, but the choice would have been even easier if I had wanted those wheels.

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