quick check, people are saying that adding Autopilot as standards will cost Tesla too much to hit the $35K base price, but since all Tesla vehicles are most probably going to ship with the hardware installed already, what exactly is the cost? is it that Tesla will only add Autopilot sensors if you select the tech package? or that they'll lose extra revenue if they don't do the $2.5K-to-turn-on option?
AutoPilot costs money to develop and maintain the software (you have to pay the developers, engineers, managers, etc.). Giving away the feature for "free" would eliminate a huge potential revenue stream for the company that would be used to recover the initial R&D expenses and to fund ongoing development. If a feature has significant value (which AP has), then people will be willing to pay extra for it. Whether that feature is advanced software, posh seating, upgraded speakers or blinking LED lights there are costs associated with it and revenue gained from selling it.
I'm sure Model 3 buyers would love to get AutoPilot "for free" in that $35K base model, but then where does Tesla get the money to pay the developers, engineers, managers, etc. to develop and maintain/enhance the software over time? I work for a software company that sells B2B software with an average deal size of over $150,000. This software can be delivered to customers "free" over the internet or on a $2 DVD. Does this mean that the software has no value or only "costs" $2? Of course not, the cost of the software includes the cost of developing, enhancing, marketing, selling and maintaining that software over time and keeping the company up and running so our customers can be serviced when they have issues getting the software to work or need help developing applications that use the software. The bulk of the cost of AutoPilot is not the cameras and sensors (which I think will be included in all cars) but the software development and maintenance costs. A company like Tesla pays their employees up front to develop software like this with the intention of charging customers to use it so the company can recover these R&D expenses.
I feel like Tesla will really screw themselves if they don't add the sensors to all their vehicles... At this point Tesla stands out by far (from all other EV's) is its looks, supercharger, and near-autonomous driving. People who only know Tesla's on a surface level getting into a model 3 will definitely expect it to drive itself. Any car that's built without the sensors is basically useless to Tesla if they try to sell it as CPO. It's just plain not-as-attractive.
I believe the hardware will be built into all Model 3 cars as this will simplify manufacturing and make it extremely easy to enable the AutoPilot feature, either at the time of purchase or down the road. Standard safety and convenience features on the S and X like automatic emergency braking, lane departure warning, blind spot warning and the parking proximity alerts require this hardware be in place. Assuming they want the base Model 3 to be as safe as its big brothers, they'll include the cameras and sensors in all cars. But they will charge to enable the AP-specific features: autopilot, self-parking and Summon. Yes, there are costs involved with the hardware, but I'm sure they've taken these costs into consideration when pricing the car.