Is it unethical to charge extra for Autopilot (software) after we had paid for the hardware?

[ItsNotAboutTheMoney]

The answer is it's entirely ethical.
The development of Autopilot software is expensive.
But Tesla doesn't want to develop bespoke safety systems, which would be cheaper, but divert effort away from Autopilot.
So, it provides safety through the same hardware and software, hoping that you'll either buy the more advanced stuff now or later.
If you buy later you have to pay extra, because as well as paying for the hardware and software, you're also paying for the debt it racked up on Autopilot development while you were undecided.

 

[Vaxe]

You didn't pay for the hardware. EAP buyers did (they paid for yours, too) and Tesla did (a risk they took in hopes people would buy the software after the fact).

Sorry but I’m not convinced Tesla would not want to amortize EAP cost into every Model 3 that ships.

 

[ℬête Noire]

But how sure are we that Tesla did not already spread EAP development cost into the $49k base price? I don’t think they would stake recouping all that software R&D cost to consumer choice.

How sure are we that it doesn't actually matter? ((Hint: Pretty damn sure.))

They make a product, put a price on it. They also price the options. You decide whether or not the product and each option has that much value for you, or not, and base your purchase on that. Later you may choose to purchase another option, or not, based on your assessment of it's value to you. There is no coercion here.

I find it baffling that someone that has purchased a product(s) from Apple, of all companies, that you don't grasp this. Apple is [in]famous for padding out their margins because they do so a damn good job and designing and manufacturing them that their product's perceived value is well about the cost to design and build them. Then, in the case of things like the iPhone (and before it the iPod), for a small fraction of the cost of the upgraded flash ROM hardware they charge $100 or more for a memory bump. ¯\_(ツ)_/¯

Is that ethical? Over the years I've seen plethora of claims that it is....and of course I reject that as illogical.....and usually transparently narcissistic.

 

[TT97]

Because I think the EAP development cost is already amortized in every Model 3’s sticker price.

I still don't understand why you think it is unethical. That is much different than not agreeing with their business model.

And why is a one time purchase unethical yet you are ok with a monthly subscription?

 

[Vaxe]

I agree with your assessment but I think it’s a huge gamble for Tesla to not amortize 100% of the cost of EAP into every Model 3 (which is why I think they did), and paying that $6k now is like paying for the same service twice. If there is evidence that the $6k for EAP has no overlap with the sticker price, and represents true development cost that Tesla has chose to absorb until the customer buys in, then I would without a doubt pay up.

How sure are we that it doesn't actually matter? ((Hint: Pretty damn sure.))

They make a product, put a price on it. They also price the options. You decide whether or not the product and each option has that much value for you, or not, and base your purchase on that. Later you may choose to purchase another option, or not, based on your assessment of it's value to you. There is no coercion here.

I find it baffling that someone that has purchased a product(s) from Apple, of all companies, that you don't grasp this. Apple is [in]famous for padding out their margins because they do so a damn good job and designing and manufacturing them that their product's perceived value is well about the cost to design and build them. Then, in the case of things like the iPhone (and before it the iPod), for a small fraction of the cost of the upgraded flash ROM hardware they charge $100 or more for a memory bump. ¯\_(ツ)_/¯

Is that ethical? Over the years I've seen plethora of claims that it is....and of course I reject that as illogical.....and usually transparently narcissistic.

 

[ℬête Noire]

I agree with your assessment but I think it’s a huge gamble for Tesla to not amortize 100% of the cost of EAP into every Model 3....

WTF?

My bad, I didn't realize the level of dumb this thread was going to reach. Goodbye.

 

[Vaxe]

WTF?

My bad, I didn't realize the level of dumb this thread was going to reach. Goodbye.

Just trying to have a civil discussion on a consumer product, no need for attacks.

 

[PoitNarf]

As others have pointed out autopilot is mostly software. I’d say as a whole it’s probably 20% hardware and 80% software. The hardware cost is most certainly rolled into the total cost of the car. I do not believe any EAP/FSD software development costs are included with the cost of the car if it is purchased without EAP.

Is the price of autopilot high? Most would probably say yes. But is it worth the cost? I think it is and many other Tesla owners who opted to purchase EAP would probably agree.

Tesla is charging what they are because people are purchasing EAP in droves and continue to do so. Does anyone have some good data on the percentage of Tesla vehicles that are purchased with EAP? Tesla will continue to do this until sales of EAP start to fall or competition from another car manufacturer forces them to adjust their prices to remain competitive. I don’t see any of this happening any time soon. This is capitalism and Tesla is doing what they think they need to do to turn a profit.

 

[gtmotor]

Why do I have to pay for Fortnite?

I already bought the console!

Oh man I think you're onto something... Tesla quick give me EAP for free and then start charging me for skins where I can turn other cars into pirate ships or something. On a serious note, Tesla could probably get the $35k Model 3 version closer to profitability if they decided to use our massive screen real estate as an advertising platform... I bet a lot of people would "opt in" to have ads shown to them startup/shutdown and have the car recommend certain retail places or restaurants over other ones not affilitated with Tesla.

The cost of the Autopilot hardware isn't terribly high — it's a standard radar unit, standard sensors, eight cameras, wiring, and a computer (probably the most exists part).

It's the software that's expensive to develop.

I dunno, the Nvidia chipset that powers a lot of the EAP functionality looks impressively expensive. But yes I agree the software dev is even more pricey.

This is capitalism and Tesla is doing what they think they need to do to turn a profit.

Yes, we are all early adopters and are trying to help a company we believe in succeed. It's no secret that Tesla is constantly on a knifes edge. If they were huge and sitting on a mountain of cash like Apple is, then I would possibly second guess some of their pricing schemes, but it's pretty apparent to me what they are trying to do (survive).

 

[Uncle Paul]

You are sure putting a negative spin on Tesla's generosity.

From the beginning, Tesla has said they they are going to put a full fleet of autopilot sensors into every car. This is to allow people in the future to add self driving freatures as they become available. They put all the sensors into the car, but do not charge for them. If they did not do this, it would be impossible to economically add all those cameras, sensors, wiring etc after the car is built. In other words, they did you a real solid.

Then they offer you to try out the features for free. Again you are upset that you need to pay for the additional capabilities.

They have also been using all the installed sensors to assist in gathering data for their Tesla Vision program. As these sensor equipped Tesla went up and down the roads, their cameras and sensors have been gathering fleet data that makes everyone's Autopilots work better. This is some behinds the scenes work that Tesla is doing to develop an improved system for all owners.

I saw an ad for Arogant Bastard Ale that says...our beer is not too expensive...you are too cheap.

 

[Vaxe]

Paul, do you have unequivocal evidence that Tesla put all the EAP hardware for “free” and “did not charge for them”? Would any publicly traded company be so altruistic? What makes you so sure the $49k base you paid doesn’t include the cost of all these sensors and software development cost. Oh right, Musk said so, because he is “generous” and “did us all a real solid”.

Please, I’m sure you’re not a sheep.

You are sure putting a negative spin on Tesla's generosity.

From the beginning, Tesla has said they they are going to put a full fleet of autopilot sensors into every car. This is to allow people in the future to add self driving freatures as they become available. They put all the sensors into the car, but do not charge for them. If they did not do this, it would be impossible to economically add all those cameras, sensors, wiring etc after the car is built. In other words, they did you a real solid.

Then they offer you to try out the features for free. Again you are upset that you need to pay for the additional capabilities.

They have also been using all the installed sensors to assist in gathering data for their Tesla Vision program. As these sensor equipped Tesla went up and down the roads, their cameras and sensors have been gathering fleet data that makes everyone's Autopilots work better. This is some behinds the scenes work that Tesla is doing to develop an improved system for all owners.

I saw an ad for Arogant Bastard Ale that says...our beer is not too expensive...you are too cheap.

 

[eyespii]

Paul, do you have unequivocal evidence that Tesla put all the EAP hardware for “free” and “did not charge for them”? Would any publicly traded company be that generous? What makes you so sure the $49k base you paid doesn’t include the cost of all these sensors and software development cost. Oh right, Musk said so, because he is “generous” and “did us all a real solid”.

Please, I’m sure you’re not a sheep.

Yo, it doesn’t matter whether or not the cost of EAP is already baked into the $49k price. What matters is that people are willing to pay an additional $5k, so that’s what they’re gonna charge. It’s capitalism. Just because you don’t think that you should have to cough up extra dough for AP, does not make it an ethics issue...

Plus, ain’t like tesla is sitting on mounds of cash. They need every cent they can get right now. Purchasing EAP *does* help go towards their goal of advancing autopilot and FSD.

If you want to get upset about being nickel/dimed, direct your ire towards AAPL. Richest company in the world, and they charge an extra $20 for a space-gray colored keyboard/mouse.

 

[WaffleJL]

If Tesla is unethical, they should charge you $49K + $6K (EAP) up front and tell you "we will turn on EAP in two years."

I am sure all the costs to have all necessary hardware implemented in M3 is included in the base cost. $6k in my opinion is purely SW development cost. It is up to the market to decide if it is a fair price. It makes perfect sense.

 

[Atari2600]

Paul, do you have unequivocal evidence that Tesla put all the EAP hardware for “free” and “did not charge for them”? Would any publicly traded company be so altruistic? What makes you so sure the $49k base you paid doesn’t include the cost of all these sensors and software development cost. Oh right, Musk said so, because he is “generous” and “did us all a real solid”.

Please, I’m sure you’re not a sheep.

So you think the software AND HARDWARE for the upcoming AP 3 was already completed and all costs for that figured into the cars? That's amazing. I think we are lucky this is a one time fee and not an annual service.

 

[Jedi2155]

The OP also appears to be very vindictive when you disagree with his/her opinion as they went through my posting history and started to disagree with random posts of mine as well. I think the questions about ethical behavior should not be towards this particular buisness practice as much as OPs.

 

[MXWing]

We are all playing checkers while Vaxe is playing Chess.

Vaxe is going to be this generations Copernicus that will redefine how we evaluate business, software distribution and bill of materials.

@Vaxe, you are in Cupertino and possibly work in Apple's supply chain department?

Asking for a friend who is considering buying calls or puts...

 

[Vaxe]

The OP also appears to be very vindictive when you disagree with his/her opinion as they went through my posting history and started to disagree with random posts of mine as well. I think the questions about ethical behavior should not be towards this particular buisness practice as much as OPs.

Awwww so cute.

 

[MXWing]

The OP also appears to be very vindictive when you disagree with his/her opinion as they went through my posting history and started to disagree with random posts of mine as well. I think the questions about ethical behavior should not be towards this particular buisness practice as much as OPs.

I got this covered dawg. I'm liking every post in this thread that has a disagree from OP.

Even steven baby.

 

[Jedi2155]

LoL, I dun be tripp'n

 

[Vaxe]

LoL, I dun be tripp'n

Feel free to share some valid opinions rather than disagree with every single post I made on this thread.