Am reposting this on Gen 2 forum.
As the cup holder inside the armrest doesn't work for me, I removed it. You pull the rubber liner in the bottom up (is not glued in). This exposes two large Phillips screws. By turning the screws counter clockwise a quarter turn you can pull the cup holder out.

Now for the real trick, reinstall it someplace where you can actually use it. (What were they thinking putting it under the lid anyway?)