Tesla (NASDAQ: TSLA) appears to be going from strength to strength. As is widely known, Tesla’s Model S has proven to be a bestseller, the company itself has quickly amassed an impressive store of public goodwill through its generous customer service and recent leasing program, and it (along with founder Elon Musk) has even garnered political points by repaying a major government loan and posting its first ever profitable quarter. Now, Tesla is about to reveal a new battery swapping system this evening. It’s been quite a year for Tesla.
The new technology will make it possible for owners of the Tesla Model S to quickly swap out a depleted battery for a charged one, all without requiring the driver to make use of Tesla’s Supercharger stops.
The Model S always had this feature, but the swappable battery didn’t exist yet. This is rather important, since it means that after Tesla unveils the new technology, all Model S cars can benefit from it—not just future models. Think of it as a large-scale battery swapping program.
We could see Supercharger stops gain an additional space for battery swaps, where car owners simply trade their depleted battery pack for a charged one. Considering that the Tesla Model S already leads the electric vehicle market with its 250+ mile range, it’s easy to predict this will set Tesla even further ahead of the competition and will go far toward easing consumer concerns about long-range trips.
The Tesla Supercharger stops were part of the company’s drive to establish a nationwide network of charging stations, thus supporting Tesla drivers on longer trips. According to MarketWatch, these stops are designed to allow charges of up to 200 miles in just twenty minutes. The new battery swap system will surely boost all that.
It’s interesting to note, however, that this announcement comes rather shortly after a widely-disseminated and closely observed war of words (or difference of opinion, if you want to be polite about it) between Elon Musk and a New York Times review regarding the Model S driving range. In that incident, the Times reviewer reported repeated problems with achieving Tesla’s predicted range/charge figures, and he apparently ran out of charge well before Tesla claimed he should have.
Musk, well-known for his social media presence, responded quickly and comprehensively, and the affair ignited debates all around. Although Tesla’s data logs debunked the Times reviewer’s claims, the incident may have sent people away still questioning its truth. Whether the upcoming announcement forms a direct response to that or not, it will certainly help ease any doubts that incident may have raised.
As Tesla Goes, So Goes the EV Sector?
As PC Magazine notes, the combination of swappable batteries with the Model S’s already-formidable range will essentially put the Model S on par with most conventional gas-driven vehicles as far as achievable range goes.
The one drawback is that Tesla’s batteries are expensive. Today, if you were to replace a 40kWh battery, you’d pay $8,000. For the 60kWh model, it’d be $10,000; and for the 85kWh battery, you’ll end up paying $12,000. Those are steep costs.
Yet those are costs for replacing the main battery, and it is possible that Tesla’s announcement later today will showcase swappable batteries at lower price points (that’d certainly make them easier to market). In the meantime, Tesla continues with its project of linking the entire nation to its Supercharger stations.
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I should note that battery swapping has, as GigaOm indicates, been tried by the startup Better Place before. It didn’t go that well. Better Place could only convince Renault to sign on, and the carmaker made one model that allowed for swapping batteries quickly.
However, Tesla already has a decent economy of scale going on. The Model S has been an undoubted success, and its Supercharger stations continue to sprout up across the country. If Tesla intends to add swapping capabilities to these stations, it will be able to absorb the hefty investment that Better Place couldn’t.
It’s clear, though, that Tesla has been mulling over this for a while—there’s no other reason why the original Model S was built to support battery swapping. For all concerned, this is an exceptionally good step forward.
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