Tesla’s Betting You’ll Pay $9,000 for a Software Upgrade

Maybe this is just pointless pedantry but...<p>This isn&#x27;t a software upgrade. It&#x27;s an on&#x2F;off switch.<p>There&#x27;s a difference. A software upgrade implies some new code which cost real money to develop is being made available. That&#x27;s not the case here.<p>As others mentioned, manufacturers do this already for cost reasons (reducing variation) on other software, but in that case it&#x27;s legitimately a software upgrade because the new software being turned on cost actual money to develop which they recoup by putting it behind a paywall.<p>In this case, it probably actually cost Tesla money to implement the software to cap the battery.<p>What we have here is software being used to implement a paywall on hardware to recoup hardware development costs (presumably developing the 75 battery cost more than developing a 60 would have). <i>It&#x27;s a software-controlled hardware upgrade</i> which happens to not actually be implemented as an upgrade because of cost control reasons.<p>I don&#x27;t know that there is precedent for this precise business model.

So we&#x27;re going to have jailbroken Teslas that have the full range but can&#x27;t update their software OTA...<p>Current cost of Li-ion battery is $145&#x2F;kWh. It surprises me that they&#x27;d chose to give away $2250 worth of battery simply because it costs more to develop a new one. I understand the batteries they use are pretty modular - the cost of adjusting down capacity should be minimal. I&#x27;m speculating that they expect a large portion of buyers of the 60 model to upgrade to the more expensive version to recoup the costs. They could make the price of the upgrade a decreasing function of the age of the vehicle because no one would want to update an old car.

Soon Tesla will send you a text message as soon as your battery is low, trying to sell you a temporary boost so that you can get to the next charger safely. At least my mobile provider does that as soon as my data volume is almost used up.

This is nothing new. Many car manufacturers have premium features already built in to the car but disabled in the software (because its cheaper to build fewer variants). Volkswagen charges a premium for remote window control despite all cars being manufactured to support the feature.

Since MS can&#x27;t even get me to use Windows 10 for free I doubt it.<p><i>reads article</i><p>Oh. An anti-feature.<p>&gt; The only difference is that the software on the lower-end version limits the capacity of the S60’s battery, crippling its range. In fact, owners can instantly transform a lowly S60 into an S75 at any time for a fee of $9,000 ($500 more than if they’d initially bought it that way). They don’t even have to bring the car to a service center. Tesla flips the software switch remotely.

Licensing vs ownership of things I buy is getting to be a real grey area. Businesses definitely want to license content to me rather than sell it, at least in a legal sense.<p>For example, when I buy a DVD, I don&#x27;t really own it. I own a physical copy of the media with a license to only play it in an approved player.<p>This has spread a bit for example to gaming. Katamari Damacy for the 360 was actually shipped with DLC on the game disc that you had to pay additional money to unlock, and it wasn&#x27;t the only one.<p>If I were rich enough to afford a Tesla, I guess it would probably be against the license to use the hardware I have to the fullest (if I didn&#x27;t pay for it), because Tesla doesn&#x27;t want that and I&#x27;ve only licensed their software.

Does Tesla try to justify this practice anywhere? Buying a software for a superior navigation system I understand but hobbling the performance of a car seems pretty shady.

The ultimate DLC. What happens when Tesla&#x27;s update server goes down, a car is factory reset, and that it&#x27;s no longer possible apply that $9,000 IAP? (ICP?)

Hm, do the batteries used by Tesla have the same kind of &quot;extended lifespan if rarely fully charged&quot; issues that apply to the kind of cells used in most laptops? If so, then I&#x27;d be curious about whether this is implemented as a cap on the battery charge - I might actually prefer the lower capacity if it means my batteries last years longer.

I wonder if they might considering letting you pay for the use of the bigger battery for a short period of time. For example, if you want to take a road trip you could pay $10&#x2F;day to make use of the full capacity.<p>I expect that could be very popular.

I don&#x27;t think this is a software upgrade or newer version of the software. They are simply saying for additional money they can enable additional features that are already part of the cars code base. Like buying an in-app purchase in an iPhone app. Or like on BMW enabling all the connected features.<p>While I imagine the author hoped to try to put this in a negative light to stir up controversy, this of course is actually a great thing. As with any other car, if you have a car and want much better mileage or a big new feature like self driving, you won&#x27;t be paying 9K for the feature you will be spending 50-100K+ since your only option is to buy an entirely new car every few years to get the latest features.<p>Any to get the new features I don&#x27;t need to pay all the thousands associated with getting a new car, as well as negotiating on a new car, and everything else associated with it. Of course Tesla could just offer all features and build in the 9K in the car, and thus not allowing anyone who can&#x27;t afford all the features to ever have a tesla. Instead they price it so people who want a tesla but dont necessary need some of those features a chance to buy the car, and then later get those features if they save up. Win win for everyone.<p>But most likely people complaining will be the same people who complain about the entry level storage on an iPhone. They would rather apple not sell it at all, than let people who can&#x27;t afford the higher amount be able to buy an iPhone at all.

This actually seems like a really nice option. It allows you to get a loan for a cheaper car, and once that is paid off, you can upgrade it.

I don&#x27;t get the controversy.<p>You may have a 75 kWh in your car, but you didn&#x27;t pay for it. You paid for a 60 kWh so that is what you get to use.<p>Tesla has merely optimized the logistics a the battery upgrade, pre-delivering it and pre-installing it, doing 99% of the work at no charge. When you pay for it, they can make the upgrade as easy as an in-app purchase.

9k for forty miles range? Really? They are betting wrong.<p>Plus I wonder how long before someone hacks these cars for personal use only?

Just like every other car manufacturer?<p>My understanding is that you choose which car to buy, and then you pay them thousands to flip a bit to enable extra horse power, on the same hardware.<p>Or you get some shady garage to chip it for you.

this is just market segmentation, which is almost always sensible from the company&#x27;s standpoint, and shady from an intuitive pov because our intuition works in terms of repaying the company&#x27;s cost to provide us with value, whereas segmentation works by extracting the maximum amount of money from the overall market.

Wasn&#x27;t this done with Windows NT and Windows NT Server decades ago? It was just a configuration setting to upgrade.

Isn&#x27;t this indirect evidence of too little competition? It has happened in the past with Intel for example...

And this is different from the &quot;GPS Navigation&quot; ..&quot;upgrade&quot; most other manufactures make you pay $2,000 - $3,000 for...when the GPS is built in by default to almost every new car now.<p>This is actually a really smart move by Tesla. They are able to offer a lower cost version of the car, without changing anything on the manufacturing side. Thus increase sales through a lower price entry point.

Funny. This company likes to get brownie points for being environmental. We all know that those batteries are not guilt-free when it comes to the environment. They&#x27;re wasting our earth&#x27;s precious resources by putting extra capacity which may never be used ;-)

Well... it&#x27;s not unusual for companies to ship the same product with different pricing and crippled performance. It&#x27;s being done all the time. This is just &quot;the next level&quot;.<p>I wonder if you can &quot;hack&quot; it yourself :)