Battery Upgrade Unethical/Greedy?

[RamshakleZ]

Battery Upgrade Discussion (looking for examples)... Due to the free unlocking Tesla was doing for vehicles in Florida many of my friends are learning for the first time of this capability in some models. However I have been surprised to see reactions from some that they feel the fact Tesla locked out part of the battery capacity in the first place is greed on their part (after all they have already incurred the capital expenditure so why not give the full capacity to the user).

I see it a different way and think it was an ingenious way to offer the car at a lower price point while at the same time streamlining there assembly process but I have been unable to convince others.

A long time ago I read an article which used examples from other industries that did something similar but I cannot find it anymore. Have any of you encountered skeptics of this business model and what examples or arguments do you use to try and sway them?

I have tried the argument of performance chips in vehicles as well as things like different versions of Microsoft Windows (the entire program is already coded and available but they have different price tiers to unlock different versions). But in both those cases the counter argument is that those are purely software-related and not physical hardware that has already been built into the car.

 

[DOCAL]

This is a discussion I've had with friends before, most of whom are in the tech industry, and I've heard pretty strong opinions on both sides.

My take on it is that Tesla said "we'll sell you a 60kwh for $x", the person paid $x and now has 60kwh of capacity. Very simple in my mind.

Anyway, to answer your question for examples.

Hard drives - the internal capacity may be different from the advertised capacity. I'm not talking spare blocks, I'm talking about a 4TB drive being formatted down to 2TB. The first time I saw it was for use in large raid systems you may want a particular drive size for expansion or replacement. Companies may not be physically making that drive anymore, but they can sell you a drive which has been told to present a certain size to the outside world. However, it can also be used to optimize production lines if there is a demand for a different size.

I've also seen it as a business model in large storage systems, you get an array with a certain capacity, but your license only unlocks a certain amount of it. That lets you expand in the future without delay, and without the risks associated with physically installing everything.

The last example I can think of is in some high end switching equipment (LAN/SAN). The number of ports active can be less than the number of ports in the switch, as dictated by a license. You get things cheaper if you need less ports, and can enable the extra ones later via a key.

 

[omarsultan]

However I have been surprised to see reactions from some that they feel the fact Tesla locked out part of the battery capacity in the first place is greed on their part (after all they have already incurred the capital expenditure so why not give the full capacity to the user).

Last time I checked, Tesla is not a charity. If folks want the full capacity of the battery, perhaps they should consider paying for the full capacity of the battery.

Perhaps a better example is my cable company: the physical infrastructure that my cable company installed in my neighborhood is capable at delivering gigabit internet--they do not deliver anything close to that and I do not want to pay for gigabit speeds--am I now entitled to have a hissy fit?

Perhaps the dumbest part of this line of "reasoning" is that Tesla is eating the cost of the extra pack capacity to lower the price point and make the care more accessible--you know, the opposite of greedy. If Tesla were truly greedy, they would hold the line at only selling 75 kWh packs and charing everyone full price to maintain their margins. But this would likely price the car out of reach of some number of some--perhaps some of the folk complaining now.

 

[Quick2Judge]

Phones to calculators to coffee makers to cars frequently come with all possible hardware then manufacturers simply change the UI/buttons to allow access to features based on the model.

It isn't evil. It is manufacturing 101.

 

[Etna]

My 2015 BMW 320i has the same engine as the more expensive BMW 328i, it is just software limited.

It never crossed my mind that it could be unethical. It makes plenty of sense from the business standpoint for the reasons explained above.

 

[fasteddie7]

Same as a vehicle that has cutouts for additional hardware but nothing there because a lower level trim was purchased or unlockable dlc in video games. You get more when you pay more. Kinda how it works. Whether the cost justifies the purchase is up to the individual.

 

[boelkers]

I think this is genius with Tesla having the ability to software unlock anything in the car. They should be, and perhaps are, doing this in the Model 3. Build every car with a big battery pack, put all the necessary hardware in for all the upgrades. Then only unlock what the person buying the car wants. When the first owner goes to sell the car, or its an inventory car sitting somewhere, someone can't complain that an option isn't available to them. Just unlock the desired option for additional fee.

Or when you go to sell your car, and you purchased it with the smaller battery pack but the person you are selling to wants the longer range pack, they can still buy your car, and then pay to have the additional capacity unlocked no longer limiting the selection of cars the individual can purchase. Then all you are limited by is wheel size and interior/exterior colors.

 

[Pezpunk]

we all pay for artificially tiered services in myriad ways.

our cable modem bandwidth is artificially capped based on what plan we buy.

My DirectTV receiver is perfectly capable of receiving all of their channels, but it will only show the ones i paid for. THE NERVE!

Movie theaters are frequently only half full. they're showing the movie to the whole theater -- those empty seats are going to waste, but they still won't let me in for free!

...and so on and so forth.

folks, this is just how capitalism works. if you are attacking this move as an example of why capitalism needs to be overthrown and all false scarcity erradicated, cool, i can respect that.

but unless you are a full on anarchist or socialist, your complaint is bogus.

 

[scaesare]

To add to this: it's my recollection that this was also about the time that Tesla was transitioning from the 60KWh packs to 75's. At some point they exhausted their supply of the now-obsolete 60's, and were now manufacturing 75's. Yet they still had outstanding orders for 60KWh cars yet to be delivered. They had a few options:

1) Cancel all the outstanding 60 orders: People would have been forced to re-order 75's if they still wanted a car. Not customer friendly.

2) Give all the 60 orderees free 75 packs: Popular for the whose with a 60 order. Unpopular for those who were paying full price for the 75's

3) Restart 60 production for the remaining order: Likely expensive for Tesla, and perhaps not plausible given manufacturing had transitioned to the 75's

4) Give the 60 orderees S/W locked 75's (similar to the original 40 owners that got S/W locked 60's): This satisfies all of the issues without most the drawbacks mentioned above. Likely expensive for Tesla, but given the outstanding orders available perhaps less expensive than #3 , and allowed them to test field-upgradable packs, which might offset some of the initial expense. Customers, a) Got what they paid for, b) gained an additional upgrade option, c) enjoyed faster supercharging rates, d) don't have 100% charge disadvantages, and e) likely will see little/no battery range degradation.


I think Tesla made the right choice, self-entitled potential customers notwithstanding.

 

[patrick40363]

Battery Upgrade Discussion (looking for examples)... Due to the free unlocking Tesla was doing for vehicles in Florida many of my friends are learning for the first time of this capability in some models. However I have been surprised to see reactions from some that they feel the fact Tesla locked out part of the battery capacity in the first place is greed on their part (after all they have already incurred the capital expenditure so why not give the full capacity to the user).

I see it a different way and think it was an ingenious way to offer the car at a lower price point while at the same time streamlining there assembly process but I have been unable to convince others.

A long time ago I read an article which used examples from other industries that did something similar but I cannot find it anymore. Have any of you encountered skeptics of this business model and what examples or arguments do you use to try and sway them?

I have tried the argument of performance chips in vehicles as well as things like different versions of Microsoft Windows (the entire program is already coded and available but they have different price tiers to unlock different versions). But in both those cases the counter argument is that those are purely software-related and not physical hardware that has already been built into the car.

It is business. The people that complain don't even own one.

 

[ItsNotAboutTheMoney]

If there's any confusion you can explain that:
- the buyers all knew that it was a 75 with a software limitation to 60.
- it was a way for Tesla to get some more low-end Model S sales at a time when people might be waiting for Model 3 instead.
- there was a $4,000 discount at purchase for the limited version
- there is a $5,000 option to unlock the extra capacity later. So Tesla wasn't just throwing the $4,000 away.

 

[number12]

Are they also mad at adobe and Microsoft?

 

[MarcusMaximus]

Battery Upgrade Discussion (looking for examples)... Due to the free unlocking Tesla was doing for vehicles in Florida many of my friends are learning for the first time of this capability in some models. However I have been surprised to see reactions from some that they feel the fact Tesla locked out part of the battery capacity in the first place is greed on their part (after all they have already incurred the capital expenditure so why not give the full capacity to the user).

I see it a different way and think it was an ingenious way to offer the car at a lower price point while at the same time streamlining there assembly process but I have been unable to convince others.

A long time ago I read an article which used examples from other industries that did something similar but I cannot find it anymore. Have any of you encountered skeptics of this business model and what examples or arguments do you use to try and sway them?

I have tried the argument of performance chips in vehicles as well as things like different versions of Microsoft Windows (the entire program is already coded and available but they have different price tiers to unlock different versions). But in both those cases the counter argument is that those are purely software-related and not physical hardware that has already been built into the car.

Better argument: they no longer sell the 60 and are, therefore, no longer greedy.