Elon said "We test drove some initial units and it just wasn't a good product."
That tells me they were already well on their way to developing it. And I am sure that the acceleration performance factored as much into his judgement as range.
I'm absolutely sure that the very low sales rate was the prime factor in the cancellation. "Less than 4%" of reservations is less than 800 a year at planned production rates, and given the low margins on the 40 kWh car, they probably decided that the margins didn't actually cover the cost of the required engineering work.
(Apparently they were having some trouble with it. Either they had to use different battery chemistry, which requires reprogramming a lot of powertrain-related stuff, or they had to have a lighter pack, which has complicated effects on the suspension and behavior of the car, or both. While these are solveable engineering problems, the question was, are the profit margins on <800 cars a year actually worth doing the engineering? )
With the RAV4EV having the same size battery pack, the people who would have bought the 40kWh may be buying Tesla powertrains anyway.
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Regarding the "software options" thing: Tesla does have an incentive to remove hardware from cheaper cars. Metal costs money. I suspect the difference between the P85 and ordinary 85 is something as dopey as larger-gauge copper wiring, but copper costs money.
Also, regarding the 40s which are "software limited" 60s -- probably some of them will be "unlockable", but don't be at all surprised if Tesla carefully uses the slightly-defective parts which didn't pass QC, but were good enough for 40kWh and for lower acceleration, to build your powertrain. Elon always has an eye for profit.
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So put another way... There is a $10,000 incentive (per unit) in hacking a piece of software code in a car that's selling very well in Silicon Valley.
I somehow doubt that Tesla thought that part through. :biggrin:
If any hackers successfully get into the car -- and given these incentives, someone will -- I'd appreciate it if you'd contact me. I have some questions about the open source software which Tesla is using in violation of its licenses, and you'd be able to answer those questions.