Tesla remotely extends the range of some cars to help with Irma

show nested quotes

Yes, it is a bad thing when you can’t modify the thing you paid for because you’ll get sued by Tesla if you try to use all of the battery that’s in the thing you paid for. If they don’t want you to use it, they shouldn’t sell it to you. They manage their own supply chain instead of deliberately crippling the item they sell then leaning on asinine legal constructs to keep you from using getting full use of the item they sold you.

You didn’t pay for it! Tesla isn’t tricking people by selling them a 60kWh battery for the price of a 75kWh one – you save $9000 by getting the lower capacity one.

smh

Keep on shaking your head, preferably faster and harder it might rattle something loose in there and you’ll grasp the ethical issues better. Tesla is charging you $9000 to get the full functionality of the hardware you already bought in order to produce artificial product segmentation, and you can be taken to court for unlocking it yourself. In what world is it fair for a company to sell you a car with a 15-gallon gas tank that won’t run when 3 gallons are left in it unless you pay them a massive amount of moeny?

So you would be fine with it if Tesla spend more money to produce a separate 60 kWh battery SKU and put that in? You paid for 60 kWh and you got 60 kWh.

A: yes, everyone would be fine with that.

B: This model screws over buyers of both “models”:

The 60kWh people are screwed out of something whose cost of production they clearly paid for.

From that you can conclude that the 75kWh people are being overcharged.

That’s not even remotely how this works. There is a fixed production cost per unit, a total production overhead per SKU and a massive cost for certification and testing per SKU. You pay for a package of those costs combined.

In terms of traditional cars:

Making the engine costs $2000, fixed costs for a production line are $10M, certification costs $100M. The rest of the car costs $20000 and covers production and development.

You have one engine variant (2.0l) offered as 3 SKUs. Total upfront cost is $110M. You offer the following SKUs:

100hp: $22900. Margin: $900, Sales: 25000

130hp: $23500. Margin: $1500, Sales: 35000

150hp: $24500. Margin: $2500, Sales: 15000

Total margin: $112.5M. Profit: $2.5M

Pedants force you to make 3 actual variants (1.8l, 2.0l, 2.1l). Total upfront cost is $130M. Your profit has turned into a $27.5M loss.

You decide to only sell one SKU (2.0l). Total upfront cost is $110M. The market changes like this:

100hp: cut. 10000 people are willing to spend more, the rest moves to a another brand

130hp: $23500. Margin: $1500, Sales: 52000

150hp: cut. 7000 people are fine with 130hp. The rest leaves.

Total margin: $78M. Loss: still $32M.

You adjust prices to turn a profit. Your one variant now costs $24500, the same as your previous upmarket model. Your company is uncompetitive and dead.

This is how every development- and manufacturing-heavy product works. A 64 GB iPhone doesn’t cost $100 more to make than a 32 GB iPhone. But not offering both units reduces total margin. NVidia offers a 1070 based on the same die as a 1080 because people are willing to spend more than BOM but not as much as a 1080 would cost.

By your definition, every manufacturer is overcharging because you pay more than BOM.

from Ars Technica http://ift.tt/2xfOf0K
via IFTTT

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.