As Tesla is attempting to incentivize legacy owners to part with lifetime free Supercharging, there is a uniquely-desirable value assigned to such a limited offer.
Only a minimal number of Tesla owners that purchased their Model S, Model X, or Model 3 Performance at opportune times have access to Tesla’s most coveted promotion: free unlimited Supercharging for the lifetime of their vehicle, which in some cases is transferable to subsequent owners.
Lifetime transferability includes every Tesla built from 2012–2016, which covers several thousand vehicles sold per year. This was then followed by intermittent and generally more restrictive Supercharging promotions.
These initial Model S and Model X vehicles were sold at premium price points at low volumes as compared to the high-volume, increasingly affordable Model 3 and Model Y — the former of which was launched the year that Tesla no longer offered free Supercharging on every vehicle sold.
It’s a promotion that Elon Musk has called “unsustainable,” as it carries a perpetual variable cost to the automaker that could be ongoing for upwards of a decade.
Theoretically, free Supercharging sounds like an ideal way to convince customers to transition to the most premium electric vehicle experience possible and it served its purpose when it was introduced to encourage a comprehensive charging network. In reality, some owners don’t use it exclusively for long-distance travel.
This is only amplified by Tesla owners that take full advantage of the promotion by primarily charging their vehicle at Superchargers, causing congestion and increasing wait times albeit potentially with the rationale of living at an apartment complex that offers no opportunity to charge at home.
Now, Tesla is attempting to get rid of free Supercharging for those that are already grandfathered in to the essentially-exclusive promotion.
While the automaker isn’t adding new restrictions or discontinuing the program, there is a new ‘Ownership Loyalty Benefit’ upgrade path:
Current Tesla Model S or Model X owners with active unlimited free Supercharging are eligible for 6 years of unlimited Supercharging. To qualify, owners must trade in or remove unlimited Supercharging from their vehicle and take delivery of a new Model S or Model X by June 30, 2023.
On one hand, it provides six years of the same unlimited Supercharging. On the other hand, it eliminates the lifetime aspect of the incentive.
Lifetime free Supercharging is particularly valuable as it’s transferable to all owners of the vehicle on original Model S and Model X models, which may be in service for up to twenty years or 1,000,000 miles by our optimistic estimation for owners that keep up with battery module maintenace.
Tesla has data to understand how utilization of free Supercharging promotions are used, and we would bet that the vast majority of owners are using it for the occasional ~1,000-mile road trip, which is one of the benefits that Tesla intended for the program and that makes Tesla ownership such a joy for owners that do regularly travel across multiple states, i.e, from New York to Florida.
By that token, free Supercharging can be invaluable to the right buyer.
Of course, there is a tangible price that can be assigned to the program: any Supercharging can be ‘unlimited’ with a linked payment method.
Tesla’s Supercharging rates vary across the country today, with average pricing of between $.25/kWh-$.50/kWh depending on Supercharger location and peak times.
For the sake of argument, we’ll use the high end of the $.50/kWh rate.
A modern Model S has a 100kWh battery pack. Assuming that the average owner follows the recommendation of the most efficient method to charge from 20%-80% state-of-charge, that is roughly 60kWh not accounting for any potential loss of energy during the Supercharging process.
60kWh multiplied by $.50/kWh provides 240 miles of range at a total cost of $30.
Therefore, a 1,000-mile road trip may end up costing about $120 each way assuming that all charging is done at a Supercharger.
A Tesla owner that only charges at a Supercharger for rationale of not having a dedicated home charger, or simply wanting to rely on a free Supercharging promotion, would need to Supercharge to provide roughly 12,000 miles of range to account for the average driver’s lifestyle.
To that end, a Tesla owner that only charges at Superchargers would have at least one Supercharging session per week or over 50 per year at a similar average cost of $30 per session.
This equates to $1,500 per year, or $15,000 over a decade which is a surprisingly reasonable lifespan for a Tesla owner despite liberal advancements in technology. However, such a use case would be an outlier and not the norm as a majority of owners charge at home or destinations.
Otherwise, many early-adopter Tesla owners do upgrade after about five years of use having undergone 16 Supercharging sessions per year on average for long-distance travel purposes. In that case, the amount of Supercharging costs equate to roughly $480 per year. Of course there are exceptions to this rule and it varies by owner, as even high-mileage drivers that charge at home could be making weekly trips in their Tesla vehicle.
We believe Tesla may have answered the underlying question themselves last week: the automaker brought back a Supercharging promotion on Model S and Model X that provides buyers with three years of free Supercharging, while at the same time oddly raising the price of all configurations by $2,500.
Thus, three years of Supercharging is effectively valued by Tesla as being $2,500.
We are sure that the automaker looked at data from past promotions to ensure that this would be a move that didn’t negatively impact margins.
By that logic, unlimited lifetime Supercharging is worth anywhere from $10,000-$20,000 depending on the usable lifespan of a vehicle.
This solidifies the fact that unlimited Supercharging is an attractive incentive on a used Tesla when it’s transferable to subsequent buyers, although even then on a 2012–2013 vehicle we would estimate that it’s really worth about an additional $1,000 as the use case of the promotion will vary by buyer.
Nonetheless, it is apparent that Tesla finds unlimited free Supercharging to be too expensive over a vehicle’s lifetime to remain a sustainable promotion and would prefer to phase it out not by no longer offering Supercharging promotions but by adding a time limit — which may be the best compromise.
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