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The ethics and business implication of an 8k $ Autopilot

Discussion in 'Tesla' started by J X 3, Oct 20, 2016.

  1. J X 3

    J X 3 New Member

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    Had to make an account as i really don't like the ethics and financials of charging 8k$ for Autopilot.

    Tesla and Elon Musk must ask a few questions.
    1. Is it ethical to severely restrict access to a safety feature?
    1. Can we make it available to everybody without losing revenue and margins?
    3. Are there any additional upsides or downsides when including the feature in the base model.

    1. Tesla is using Autopilot as a option aimed at increasing margins and by grossly overpricing it, Tesla severely limits access to it.
    Elon Musk , Google and pretty much anyone with a clue are clear, the robot increases safety. For level 1 and 2 one can argue that it is a convenience feature but level 3 to 5 are absolutely a safety feature. A prohibitive price for a safety feature is clearly unethical, especially when they could do better with little effort - even if it would have been difficult, Tesla isn't afraid of difficult tasks.That's what sets them apart from everybody else.
    From an ethics perspective Tesla should include the feature by default and make every effort they can to encourage customers to use it. It's safer for the driver and every other participant in the traffic.

    2. Model 3 is a very costly car, even in the US it is a stretch to call it affordable.Elsewhere 35k$ means even more. Sure, folks will take advantage of gov grants, maybe do the math for gas savings and ,hopefully, lower maintenance and repair costs and , best case scenario, conclude that Model 3 is getting closer to a 20k$ ICE car. When you buy a 20k$ car, adding 8k$ is more than too much.So it would be reasonable to conclude that only some 10-20$ of the global Model 3 orders will include Autopilot. Limiting access like this when everybody has the hardware only increases the pricing for the few that can afford to buy it.
    If only 10-20% of buyers can afford the feature at 8k$, it would mean that to include the feature in the base model, thus allowing access to every buyer, would lead to a price increase of 800 to 1600$ to be able to maintain the same overall revenue. Fine tuning overall costs and adjusting pricing for other options could allow for the feature to be included in the base model without a price increase while keeping Tesla's revenues at the same levels.- do remember that almost any feature in the base model of any car is a CHOICE made by the car maker. the car maker decides what is important enough to make it in the base model and , in this case, despite claiming that it is a crucial safety feature, Tesla has decided not to include it in the base model.
    It's like charging 2k$ to enable the airbags and , as i have explained, it's not something they need to do, it's something they chose to do.


    3.
    Upsides:
    - including it in the base price boosts sales and is great marketing
    - keeping the drivers alive helps a bit as dead people don't spend money
    - provides more differentiation and increases customer retention
    - for car as a service to ramp fast, people need to trust the robot. Allowing more consumers to experience autonomous features ahead of such a service, speeds up the adoption for car as a service and that's worth tens of billions, maybe hundreds over the next 10-15 years
    - if in the early stages of car as a service owners also send their cars to earn money, fewer cars with the feature leads to fewer cars available for the service and the entire point of this, from Tesla's perspective, is to enable the growth of the service much quicker and without the CAPEX required for their own fleet.
    - it's easier to argue that it's a crucial safety feature (and accuse the press of killing people :p) if you don't charge for Autopilot more than what 80% of the people on this planet earn in a year
    - autopilot would also lead to lower under warranty costs for Tesla as the robot is a smoother operator (lol)
    - customers are more likely to enable data sharing

    Downsides:
    With more autonomous cars ,negative publicity and legal complications would increase if the system is less than stellar.

    For X and S the rate of adoption will be higher but it's also possible that the price of Autopilot will be lower for Model 3 and if that's true, the math would become even easier. It's also possible that including the Autopilot feature in the base price might require a slight increase in price but adding 500$ to the base price this late in the game when the design is finalized and it's harder to cut costs elsewhere but would be something that the vast majority of customers would welcome and the ethics would be on Tesla's side- as long as it is a minimal increase.

    It's easy to do things like everybody else without giving it any thought at all but that doesn't mean that it is good business or .. decent.
    However, Tesla has the opportunity to do better here. Offer a better car, a safer car to every customer while making more money and paving the way for a fast adoption for a car as a service offering.
    Tesla is all about doing it better than others and finding ways to do so.It's easy to do much better here and not doing better kills people.


    PS: I understand that most people here will feel the need to defend Tesla's current position at any cost instead of trying to understand my point of view and maybe accepting that Tesla could do better, much better. Defending the status quo without seriously considering a better way to do something is almost always a bad idea. Tesla exists only because a few people decided to build a different car , a better car and rejected the status quo. That was much harder than this, this would be easy.
     
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  2. S4WRXTTCS

    S4WRXTTCS Active Member

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    #2 S4WRXTTCS, Oct 20, 2016
    Last edited: Oct 20, 2016
    Correct me if I'm wrong, but Tesla is the first company I know of that made activate safety (like AEB) a standard feature (from Dec 2014th onward). Everyone else at the time seemed to include it only as an add on package.

    With AP 2.0 Activate safety is also standard even you forgo the $5K package, and the $3 package.

    There really aren't any studies to compare activate safety + human versus autonomous robot only driving. I'm not convinced the $8K package with zero human oversight would be safer than a human driver + AP 2 active safety.

    With human + computer you're getting what humans do best (anticipation) along with what robots do best (attention/exactness).

    For the Model 3 you can't apply the $8K cost to it. The Model 3 will use less expensive hardware since it's coming out later. Every iteration NVidia product drastically improves performance and reduces cost for that performance.

    As far as society goes I would rather have roads full of expensive safe cars that were environmentally friendly and offered inexpensive ride sharing versus individually owned/operated cars that were old and unsafe.

    It's too expensive to even own the cheapest ICE car because the big expenses tend to be outside of the car itself. They tend to be unanticipated things like it being towed and then you owe $500, or you bought the car with a ridiculous interest rate. In poorer communities there are also other expenses like ridiculous insurance cost, and cops that target people of color (they get more non-moving infractions).

    Note: I'm not defending or supporting Tesla. I actually think all this Level 5 stuff is unachievable right now, and Tesla is talking crazy. When I read the blog post I got the feeling that Elon has truly gone completely insane. On paper it sounds good to have a car that can eventually reach Level 5, but realistically it's improbable due to all the regulatory/safety requirements that might happen. It's really like trying to make basket from 100 yards away. I wish them luck, but it's likely going to be a miss.
     
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  3. flashflood

    flashflood Member

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    I think you're underestimating the difficulty of the problem. Building an electric car was trivial by comparison. It didn't require any new inventions, just really good execution of existing technology. By contrast, full autonomy is an unsolved problem. There are many prototypes that can handle simple tasks, but think about the most complex intersection in the middle of Boston, or a ladder that falls off a pick up truck in the middle of the freeway. That all has to work to claim full autonomy.

    And that's not even getting into the ethical questions, like if the car is in self driving mode, and it sees two little girls run into the street, and the only way to save their lives is to veer into a telephone pole, costing your own life, which is the correct choice?
     
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  4. calisnow

    calisnow Active Member

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    OP - who's your favorite economist?
     
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  5. Nosken

    Nosken Member

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    Since this is unknown territory, I wonder how much of the additional price is "baked" in to satisfy any liability issues.
     
  6. number12

    number12 Active Member

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    Do you buy prescription drugs?

    Do you know their mark up?

    Do you know what R&D stands for?

    Do you believe in America?
     
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  7. number12

    number12 Active Member

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    Tesla has lots I disagree with, but only part I find truly indefensible is the unpredictable deprecation. They knew ab new AP when I bought my car 2 weeks ago and asked them repeatly about it. They knew telling me the truth would cost them a Q3 sale. I'm ok with it. I didn't buy a $100,000 car because it would go up in price, but what you are saying makes no sense as is not American/capitalist.
     
  8. bh1783

    bh1783 Member

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    stick to Skoda or Lada then
     
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  9. ModelNforNerd

    ModelNforNerd Active Member

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    If the new version of AutoPilot....or whatever they're going to call it now...is anything like the current version, the safety features will be activated on the base models, included in the price of the vehicle.

    So with that one bit of knowledge, I was able to save myself the time of reading your TL;DR wall of text regarding "business ethics".
     
  10. sandpiper

    sandpiper Active Member

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    So what's the option? A lot of people complain about this situation but nobody offers a better solution.

    Tesla is developing new technology much more quickly than other automakers. And so this will inevitably happen. There were lots and lots of rumblings out there that the new AP technology was coming close. It was certain to be introduced before the M3 hit the road - later next year.
     
  11. lolachampcar

    lolachampcar Active Member

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    The BeV is the new flat screen.
    You can always buy a Bolt and be assured no meaningful development will occur to devalue your investment.
     
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  12. McRat

    McRat Active Member

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    Arrgghhh...

    You do understand that you don't have to have AP in a car for it to operate perfectly well, right?

    Yeah, it sucks to actually drive. Wait. It doesn't for many people. It's sort of like cooking. You can it done for you, or you can do it yourself. Some people enjoy doing it themselves.
     
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  13. McRat

    McRat Active Member

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    360° camera with digital processing and sensors, why didn't GM have that? Wait...

    The Bolt won't be the first GM to ship with the 360° camera system. You can buy a CT6 and other models today with it.

    Gotta say this though, to get the full sensor suite on the CT6 is pricey, but it does come with 4 wheel steering, powered and heated + massage front and rear seats and IR night vision technology.
     
  14. number12

    number12 Active Member

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    Be transparent/offer information when it's available PLUS offer discount for day old technology that is dated. They kind of did that this time by pricing AP so high, but facelift AP1 etc did not have anything
     
  15. McRat

    McRat Active Member

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    It's amazing that folk do not understand that 5 minutes after you buy a tech product, a better version is released.
    And that the bleeding-edge tech is never a cheap date. You are doing champagne toasts, not guzzling MD 20-20.
     
  16. Johan

    Johan Took a TSLA bear test. Came back negative.

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    The whole notion of this thread and its original post is nonsense. It's a glaring example of the mistake of letting the perfect become the enemy of the good, a common gotten of cognitive bias/error in thinking.

    Perfect is the enemy of good - Wikipedia
     
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  17. Weezer Fan

    Weezer Fan Member

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    Just a note in regards to the OP's original post. Back in 2005 when I was buying a new vehicle, (that I still drive), I paid a premium to have side air bags. They were not standard as they are now, and they were an option I had to pay extra for. So, safety options have a history of costing more in the beginning. Then, they make their way into all vehicles, becoming standard equipment.
     
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  18. Buster1

    Buster1 Member

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    Great 1st post JX3, well thought out. Thanks!
     
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  19. sandpiper

    sandpiper Active Member

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    That won't work. You would have an incredible Osborne effect that would cause Tesla sales to jump around wildly - to the point that it could potentially destroy the company. And it would be the end of their "fixed price" philosophy. Tesla, as a very small automaker with few models, needs a fairly steady order flow / cash flow. They can't do a late spring build-out of one model year in preparation for re-tooling to the next year.

    I expect, at some point, that they WILL go to fixed model years, with more predictable and transparent upgrades. What we have now is a "lesser of two evils" compromise that allows the company to innovate as fast as possible while maintaining a fairly steady cash flow.

    In this particular case, I expect that the AP2 to AP1 depreciation won't be as bad as you think. Most people aren't as enamored by the tech as the people on this forum are. And I also expect that the roll-out of the software to drive the system will be slower than most people hope. I still don't expect fully autonomous cars before 2030.
     
  20. andrerodpt

    andrerodpt Member

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    This wins for me. When you compare a passive safety feature with one active safety feature, that seals the rest of thread.
    And, as one user stated, the airbags were not always a free option. Nor the ABS. Or the ESP. Or... it goes on and on.
     

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