NEW YORK (CNNMoney) — Tesla Motors unveiled a system that will let drivers swap out the battery in a Model S in about 90 seconds, which is less time than it takes to fill up a traditional car at the pump.
Tesla hopes the new system will help overcome the fears that many drivers have about the convenience of electric cars.
At a demonstration in California Thursday night, Tesla CEO Elon Musk said the battery swap stations will be installed throughout the network of “supercharging” stations that Tesla is already installing around the nation. The supercharging stations currently provide free recharging in about an hour. Musk said the battery swap, which will cost between $50 and $80, will allow drivers to get back on the road faster if they’d like.
“The only decision you need to make when you come to one of our Tesla stations is, do you prefer faster or free,” he said. “Our goal here was to eliminate the objections that people have. We want to show that [Tesla] can actually be more convenient than a gasoline car. Hopefully this is what convinces people that electric cars are the future.”
While Tesla showed the Model S battery swaps, there were TV’s above the swapping station showing a 4-minute video of a driver filling up at the pump. The cost of the 23 gallons of gas purchased at the Los Angeles gas station in the video was $99.83.
According to analyst Trip Chowdhry of Global Equities Research, the quick-charge stations will be a money maker for Tesla, which plans to spend about $100 million installing the stations.
“We estimate Tesla margins on battery swap stations could be north of 60%,” he said.
The battery swapping technology also gives Tesla additional environmental credits from states such as California, which are pushing automakers to sell more zero-emission cars. Tesla has been able to sell those credits to the major automakers, and that has been a significant source of profits for the company.
One start-up that also planned to offer battery swapping for electric vehicles, Better Place, recently filed for bankruptcy and halted its operations. Chowdhry said that company’s plans were based on the flawed assumption that all the different electric vehicles would use interchangable batteries.
In May, Tesla announced plans to greatly expand its existing supercharging network, tripling the number of stations by the end of this month. By the end of this year, Tesla drivers should be able to drive from Los Angeles to New York.
The battery swapping stations are expected to be in service by the end of the year.
Shares of Tesla, which have nearly tripled in value so far this year, were up 2.6% in early trading.