Tesla Motors Inc (NASDAQ:TSLA) fueling the battery-swapping debate

Posted by Chris Bell July 19, 2013 0 Comment 1594 views

Tesla Motors Inc (NASDAQ:TSLA) is a decade old and a lot of critics and skeptics have been surprised by its performance. Last month, the electric-car company had announced that  it will be launching a battery-swapping service for its Model S cars that travel longer distances and need more battery power. It was a definite boon for Tesla car owners who felt constrained when it came to traveling long-distances in their electric cars.

Credits and more

Apart from the fact that its customers are benefited, it is a good way for the company to get maximum zero-emission vehicle credits in California. Tesla earns these for every Model S vehicle that it sells. In the Q1, it is these credits that were the differentiating factor between profit and loss for the company. Elon Musk, the Tesla CEO says that the company is bracing itself for the eventuality that the revenue from the sales of ZEV credits will drop to zero by the end of 2013.

The refueling tactic

However, the company is not going to be turning down any such sales if they do occur. Under the existing rules, the ability to swap Model S batteries permits Tesla to earn the maximum number of credits per car. Fast refueling counts for a lot when it comes to accruing credits. With just the battery that the car was outfitted with, Tesla would never have been able to hit the bar for fast refueling that had been laid out by the California regulators. But battery-swapping saved the day.

Change of rules

Why this issue has now been brought back into the limelight, is the fact that regulators in the state are now considering a change in rules. They might remove the option of “pack-swapping”, for meeting the requirement of “fast-refueling”. Tesla, however, is unfazed by this news and will continue with setting up its maze of Supercharger quick-charging spots. The battery-swapping option will stay and customers can take their pick.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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