Anyone not getting Enhanced Autopilot (EAP)?

[yodrak]

You know this how?

You've presented an interesting and detailed argument for pricing strategy, but it's a generalization and may not include all of the details specific to Tesla. Are you on the Tesla team that sets the Tesla pricing strategy? Do you have inside information as to all of the factors that Tesla considers for establishing its pricing strategy?

Just curious ...

... Tesla set the price of EAP based on the demand characteristics of the luxury market for the MS and MX. ...

 

[bmzl]

You know this how?

You've presented an interesting and detailed argument for pricing strategy, but it's a generalization and may not include all of the details specific to Tesla. Are you on the Tesla team that sets the Tesla pricing strategy? Do you have inside information as to all of the factors that Tesla considers for establishing its pricing strategy?

Just curious ...

You are correct; I do not have inside information on Tesla's pricing strategy. I presumed that they set the price of EAP on the MS and MX to maximize profits.

 

[alseTrick]

Post # 136:

bmzl, Sep 16, 2017 :
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The primary determinant for most corporate pricing is to maximize profits. However, the price that maximizes profits is a function of demand elasticity. For a luxury car like an MS, demand elasticity is low, e.g. a $5000 increase in price is likely to produce a small decrease in demand. For a mass-market car like the M3, the demand elasticity should be much higher, e.g. a $5000 increase in price is likely to produce a large decrease in demand. Accordingly, Tesla would maximize its profits on the M3 with a price for EAP lower than $5000.

Moreover, Tesla is not a standard corporation: its mission statement is: "to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible."

Inasmuch as EAP has a marginal cost of zero, Tesla is free to price in accordance with its mission statement--producing a price for EAP much lower than $5000..

Ok. So then you're the one that doesn't get it.

 

[bmzl]

Ok. So then you're the one that doesn't get it.

??

 

[NoTDI]

You are correct; I do not have inside information on Tesla's pricing strategy. I presumed that they set the price of EAP on the MS and MX to maximize profits.

I agree with you I think Tesla missed the mark on the pricing for auto pilot. One of the main reasons I put my name down for M3 is auto pilot. I'll be ordering my LR fully loaded but without auto pilot. If everyone refused to pay 5000 they will readjust.

 

[bmzl]

I agree with you I think Tesla missed the mark on the pricing for auto pilot. One of the main reasons I put my name down for M3 is auto pilot. I'll be ordering my LR fully loaded but without auto pilot. If everyone refused to pay 5000 they will readjust.

That would be my hope too. They priced the long-range battery on the M3 at one half of what they priced it on the MS; so hopefully they will reconsider and do the same with EAP.

 

[alseTrick]

??

Tesla is clearly charging the same price for eap for the 3 and s/x whether you like it or not. Since, you know, it's the exact same product and all.

It would actually make more sense for eap to be cheaper on the s/x than the 3.

 

[internalaudit]

Hopefully the TACC gets unbundled and offered for $1k or so. Sounds like there would be quite a few takers, me included.

I’d spring for the EAP package in future cars for my own use after using it on long trips in my S85D. But the way my wife will use the M3 makes the $5K for all the EAP features a very poor value.

But TACC is hard to give up once you’ve used it.

I think most of us wouldn't mind paying up to $2k. I just don't find any use for lane change assist or highway exits. I would love a lane change assist if it is part of a rear/side collision mitigation where the car will shift safely to another lane to avoid being hit during those odd times when two are trying to occupy the same spot, when someone is about to rear end you, etc.

 

[internalaudit]

Last week or, this was announced:
Broadcom Introduces World’s First Dual Frequency GNSS Receiver with Centimeter Accuracy for Consumer LBS Applications

If Tesla uses a dual (or more) GPS receiver, maybe it will add some precision to the location of the car and not have to rely solely on painted lines.

 

[siggyfreud]

That would be my hope too. They priced the long-range battery on the M3 at one half of what they priced it on the MS; so hopefully they will reconsider and do the same with EAP.

That's a very over simplified comparison though, since the larger battery in the model s came with substantial performance upgrades as well.

 

[voip-ninja]

That would be my hope too. They priced the long-range battery on the M3 at one half of what they priced it on the MS; so hopefully they will reconsider and do the same with EAP.

There are similar analogies in technology feature pricing in other luxury auto makers.

AFAIK BMW and Mercedes don't charge less for their high end features like adaptive cruise control on their lower series cars than their higher series vehicles.

 

[bmzl]

That's a very over simplified comparison though, since the larger battery in the model s came with substantial performance upgrades as well.

As it does with the M3; so it remains a good comparison.

 

[bmzl]

There are similar analogies in technology feature pricing in other luxury auto makers.

AFAIK BMW and Mercedes don't charge less for their high end features like adaptive cruise control on their lower series cars than their higher series vehicles.

The reason why that is not an apt comparison is because there are significant marginal costs with their adaptive cruise controls. There is no marginal cost with EAP on an M3.

 

[bmzl]

Tesla is clearly charging the same price for eap for the 3 and s/x whether you like it or not. Since, you know, it's the exact same product and all.

It would actually make more sense for eap to be cheaper on the s/x than the 3.

I cited you to economic theory showing that your statement makes no sense. Do you have any economic, or any other verifiable, support for your allegation?

 

[TrumpetTitan]

My wife has the EAP on her 75D, and while I do respect it and enjoy the TACC, it's not worth $5,000 to me.

 

[TrumpetTitan]

^I forgot to mention that she has a Model 3 reservation for me, and I currently don't plan to purchase it. It makes sense to have it on the S, since it's a larger car that is going to sell well to the luxury market.

However, I'm expecting the Model 3 to have a more lightweight, sporty feel. A car like this is one that I'd want to be driving myself.

 

[roguenode]

No EAP for me as most of my driving is on mountain roads where the current Tesla mapping system has trouble just getting map data, let along contending with poor lane markings, hairpin turns, etc. I just won't use it enough to make it work the cost.

 

[Glamisduner]

Even if paying cash. If you could instead invest the $5k in a fund returning an average 4% interest for 5 years, you'd make more than the extra cost of purchasing autopilot as an add-on.

As always, people, remember that cars aren't investments. Don't buy things that you don't particularly want/need on speculation that they'll make your car more valuable later. Buy only what you want / need when you buy it.

Ok, but you just lost 5 years of autopilot use....and investments can go either direction...
I think of cars as investments for transportation over X period of time. Bad investments yes, but that's essentially what they are...

But if I was only worried about the monetary aspect of car features and pricing I would NOT be buying a tesla, or ANY new car in the first place. Are these cars supposed to save us money?

Plus the wife said do it! and convinced me to order FSD as well. I doubt I would invest 11k into for software after my car is 5-10 years old, it makes more sense to do this now up front so I can get the most use out of it. It will be interesting to see which FSD features will be coming out soon.

For me, EAP is something I will use daily on my commute.

 

[kutkuzak]

I was used to spending thousands just for navigation in prior cars. Spending 5k for a feature I use ALL the time during my commutes - it's a no-brainer for me. My commute is either 70+ or practically stopped many many times - TACC does it all for me.

 

[BenR]

90% of our driving is on the same six rural roads (that are going to be super-fun to DRIVE in a Model 3!) 90% of the rest of it is in-town. While it would be super-nice on those once-a-quarter highway trips, I can't justify $5k for that.