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Comment by jerrya | Hacker News Reader

Is it outrageous to think that eventually this "gas" will be free because outlets will compete to have Tesla and other electric customers stuck at their restaurant, bar, store for a half hour?

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I remember talking to a friend who worked for an oil company, who told me that the shops at gas stations actually make 2-3 times more than the revenue generated from the gas. If you were an oil company which dealt exclusively with the consumer (which of course non of them are) you would in fact be a catering business which sold gas on the side.

Slight pedantry note: revenue and earnings are not the same thing.

I think he had them backwards -- I've heard similar stories from others who own gas stations. Gas makes up a substantial portion of their revenue, but the margins are so thin that most of the profit comes from the food and retail services.

So basically gas stations are just an excuse to do other business?

Pretty much, depending on their location often people pulling in to refuel are a captive market.

And why convenience stores in Japan (and other places, I assume, though I haven't seen them) frequently sell the same kinds of merchandise as gas stations do in the US, but most don't sell gas because the margins are so small, the pedestrian market smaller, and real estate so expensive.

>I remember talking to a friend who worked for an oil company, who told me that the shops at gas stations actually make 2-3 times more than the revenue generated from the gas

That is completely impossible. Maybe profit, but not revenue. Even my sedan with a 17 gallon tank costs more to fill up than even a pack-a-day smoker with a lottery addiction and a love of energy drinks is likely to spend at the shop.

Former gas station owner here (don't ask). Profit is correct.

Typically a gas station makes 1 or two cents per liter. A 17 gallon tank is approximately 68 liters so that's between $.68 and $1.36 or thereabouts in gross margin for the station. Of that they still have to operate and service the pumps, and deal with periodic mandatory environmental upgrades and inspections.

You have to do millions of liters per year to turn a profit on the gas. Gross profits on store goodies are on the order or 20 to 30%. If they're refrigerated then likely it is on the low end, if they are non-perishables then it is on the high end.

Sorry - just a typo, meant profit. It was late.

That is actually pretty insightful — pretty easy to get back the $3 that it costs. I can definitely see "free charge with purchase".

At $0.11/kWh, the Roadster at 53kWh would take almost $6 to completely fill.

Though if these stations charge using solar power and store the power in a battery pack to discharge when a car hooks up, it could potentially cost them a lot less than $0.11/kWh, depending on the cost of building the station itself.

Solar will hardly be efficient enough, unless you'd have a whole solar farm beside each station...

Also add maintenance of all those batteries and I bet you'd have a really hard time to motivate solar for economical reasons.

I doubt those stations will store the power locally. My bet is that the solar system pumps power into the grid during the day, generating $$ for tesla. Then in the night, it draws from the grid since power is cheaper then anyway.

According to the article it sounds like the devices are hooked up to the grid, but use solar effectively to offset the cost - Musk claim they will feed more energy into the grid than they'll take out while charging cars.

The solar component is a stunt. Electricity is fungible. How about putting the solar plants where they work well (mountaintop? desert?) and the charging stations can just hook to the grid. Then they can get their electricity from any convenient source (local nuke plant for instance).

The argument about 'free solar' is almost an oxymoron. That electricity costs more per kwh than most any other source.

It is not a stunt. It is a direct counter to the anti-EV argument "Electricity is made from fossil fuels anyway, so by driving an EV you are just shifting the source of pollution to the power plant."

Tesla is attacking every single anti-EV argument in a very deliberate way and most of the attacks are strong successes.

It IS a stunt, in the sense that the solar feature is technically independent of the charging stations. The message is clear, but there is no necessary link between the solar elements and the place you go with your electric car to charge up. Placing them there is probably a worse decision that placing them optimally. That's makes it stunt.

And there is also a strong argument that the manufacturing and installation costs of solar farms has a long payback. They are a battery in that sense - energy invested in them slowly comes back out. PRobably petro-energy. So intially solar is a net negative in eco-impact. Same with wind.

The way solar works in california for small installations is you just produce it and use it and whatever you do not use just send it to the electric company. If you need power you are not producing then you just take it from the electric grid. The electric company has to take your excess power (by law). The electric company then subtracts the power you put in from the power you use and only charges you for the difference.

So currently you do not have to worry about batteries or storage. You only have to worry about producing on average about as much as you use. The electric company does not have to worry about storage either because times of high sunshine always coincide with times of high electricity demand (due to air-conditioning).

So currently one can easily install and use solar without ever worrying about batteries or storage. If we ever get to the point where we rely exclusively on solar and wind, we will have to start worrying about storage, but this point is far off for now. Also, at that point the responsibility for storage will likely fall on the electric companies.

Tack on to that the increased capacity electric vehicles are going to have to have, as well as the increased electricity prices I am expecting when ten million Americans are charging their cars.

Current U.S. energy use is ~ 10 billion kw-h per day.

1 billion kw-h / day more is a nice big tick on that, but I'm not sure it would drive prices a whole lot.

Yah, but those people won't be using refined gasoline. It uses alot of electricity just to refine a gallon of gas.

According to this web page:

http://www.consumerenergyreport.com/2012/03/21/what-makes-up...

It takes about $0.20 to refine a gallon of gas, so ~2kWh/gal. Except, It obviously actually takes less electricity than that, because there are other costs to refining. Not a bad investment in energy terms, when a gallon of gasoline contains ~36.6kWh worth of energy.

Don't forget the cost in electricity of finding deposits, mining them, transporting the pre-refined gas, transporting the post-refined gas, and lobbying Congress.

I just imagined the Congressional Cattle Prod, wrapped in $100 bills.

Where on that page did you get the 20 cents? Didn't see that anywhere. From this http://gatewayev.org/how-much-electricity-is-used-refine-a-g... It's more like 6kWh/gallon.

Surely increased demand for a resource should, long-term, drive the price down and not up?

Potentially, if there are improvements in infrastructure to be made that reduce cost. But it is hardly implicit that increased demand will lower the price- just look at oil.

The stations generate more power (via solar) than the cars use while charging. There is a net REDUCTION in energy use if you charge solely from these stations and I'd imagine that part of the business model is selling the excess energy back to the power companies. I'd bet that getting certified for this sort of thing is also a heck of a lot easier than getting certified to build a solar farm. Pretty smart move I think.

At $2/W, filling up a roadster would require $106,000 in solar panels. More if you anticipate more than one fill up per hour.

Probably much cheaper than installing tanks in the ground and pumps on the surface to handle gasoline. Not to mention remediating the site when the tanks eventually start to fail.

There's an old service station near me. It was once a fuel station, but was eventually turned into just-a-repair-garage. Transmissions, mainly. But they didn't remove the tanks when the locale switched gears. That garage is now defunct; there are potential entrepreneurs who want to use the space, but the cost of removing the old tanks and cleaning up the site for alternate zoning (one of the people looking at it was thinking about opening a cafe) is going to be prohibitively expensive.

Its not.

But at the most this is change in the revenue model for 'gas/electric' stations or whatever you would like to call it.

But at the present and things as they stay, no body is likely to compete with Tesla. They are only having this network so as to ensure people can roam around without having to worry about running out of fuel. Tesla itself may not offer free energy once their user base grows to a substantial amount.

This is a incentive to get users to buys their cars, not a free energy give away drive. Once they have substantial customer base, free market dynamics will take care of the energy supply.

Another possible revenue stream is free for Tesla owners, and not free for other electric cars that support the "nozzle" (if Tesla allows others to use the same nozzle design).

The connector on the vehicle is proprietary, but there's an OEM adapter to use SAE J1772 connectors. (like the charging station near Google Kirkland: http://tmblr.co/ZStnmwKlXAF8 )

If Tesla doesn't let others to use their connector, they're doing themselves a huge dis-service. We need to start off with one standard. Imagine if every petrol station had connectors for different cars, or you had to look for a special station that fit your car? Nightmare.

>>If Tesla doesn't let others to use their connector

It must be the other way around. If you want free power, design your car to use their connector standards.

Well, you can't get the free power if Tesla legally prevents you from using the connector because they're looking to create a near-term advantage. That's the key. My comment was that Tesla would be harming themselves by not allowing others to use it. Others would come up with a standard and now you'd have all these Tesla vehicles with a non-standard connector.

> Well, you can't get the free power if Tesla legally prevents you from using the connector because they're looking to create a near-term advantage. That's the key.

If I were running Tesla, I'd let my competitors' cars come and charge at the station, then sell them lunch and snacks.

Well, honestly, offsetting the expense from "gas" to whatever products/entertainment/services/food that will be available is farking FANTASTIC.

Its not like they will be forced to buy whatever is in these stops - but the fact that the consumer can now actually CHOOSE what to spend those funds on is wonderful.

I HATE BUYING GAS

I currently don't drive at all (I bike to bart and bart to work) - and my car had its starter go out, so I haven't even been inside a car in more than a month.

I have always hated buying gas - I feel like I am being extorted every single time (and yes, I still harbor a grudge against bush/cheney whom I feel is largely responsible for this situation - whether this is unfounded blame or not, I still feel good about it :) )

On the other hand, it could also end up like hotel phone calls or wine uncorking fees - ridiculously expensive just for a convenience.

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