Tesla Owners Will Have to Pay for Supercharger Access

Tesla Motors Inc. will charge for the ability to use its network of Supercharger equipment for buyers of the forthcoming Model 3, a return to a practice the company once used on less expensive versions of the Model S.

Chief Executive Elon Musk said Tuesday at Tesla's annual shareholders' meeting the company would have to charge for use of the fast-charging system to make the economics work. When Tesla started selling the Model S sedan in 2012, buyers of the 60-kWh battery pack and the 40-kWh battery pack had to pay $2,500 to access the Superchargers. Those models were discontinued because of low demand.

It is an important development for Tesla because the fast-charging network, which Tesla valued at $166.6 million in 2015, is an important marketing feature for the company. It allows customers to recharge the large battery on the car in under an hour. A non-Tesla 240-volt charger commonly found in cities and parking areas could take 10 hours.

A young shareholder, who said he took possession of a Model S 85D last July and put 150,000 miles on it in less than a year, asked how the company would keep up with Supercharger demand with the potential for hundreds of thousands of new cars to be sold. The company has taken $1,000 deposits for nearly 400,000 Model 3 electric cars. Tesla plans on producing the new car, which starts at $35,000, in the second half of 2017.

"The obvious thing to do is to decouple that (cost) from the cost of the Model 3," Mr. Musk said. "It will still be very cheap, especially in comparison to gasoline, but it will not be free long distance for life unless you purchase that option."

Last year, Mr. Musk at the shareholder meeting made the first hints that a change to the policy around the Superchargers might come. He made reference to people "abusing" the system by using it for daily charging rather than for quick fill ups between cities, causing congestion at the stations. The statement set off intense debates on Tesla's enthusiastic online message boards.

As the number of Teslas has grown beyond 100,000 globally, the fast-charging stations, which now number 634, with 3,780 individual chargers, have become crowded in some areas where the population of cars is dense. Tesla has tried to offset this by building "destination" chargers at hotels and parks that provide charging that is faster than regular 240-volt chargers, but slower than the Superchargers.

Write to Mike Ramsey at michael.ramsey@wsj.com

(END) Dow Jones Newswires

June 01, 2016 13:25 ET (17:25 GMT)

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