By on January 15, 2017

tesla model-s-rear

Tesla pricing is about as predictable as the winning lottery numbers. This year it added numerous surprise fees onto its supercharging network and rearranged the pricing structure for its Model S sedan more times than I can remember. Most recently, the company increased the price of its base Model S 60 from $66,000 to $68,000 with an $8,500 software update that unlocks the battery’s full potential — since the 60 is just a 75 that has been digitally neutered and rebadged.

In some instances, almost 30 percent of the value of the vehicle can be unlocked through in-car purchases. There are all manner of software-upgradable items but keeping up with their pricing is nearly impossible, especially when Tesla doesn’t actively announce those changes.  

Model S owners have reported to Electrek that the cost to upgrade to the 60’s battery into a 75 kWh has been quietly reduced by $2,000 — the exact same price they increased the 60 by in November. While “enhancing” the battery was previously a $9,000 option, the cost of the upgrade on some owners’ “My Tesla” account dropped to just $7,000 on Friday night.

Anyone who purchased a Model S 60 after November and upgraded their battery software before the price cut, has to be kicking themselves right now. While it isn’t clear if the discounted upgrade is available to all owners, it is still $500 cheaper to simply purchase a Model S 75 outright and avoid as much of this nonsense as possible.

Teslas claims that selling the 60 at a reduced price — despite it really being a 75 — remains profitable. However, the EV manufacturer did use in-car messages to semi-desperately advertise the 75 kilowatt-hour upgrade to 60 owners last year. Buying the more-expensive vehicle would have circumvented that little annoyance entirely while Tesla continued to fiddle with its clumsy pricing structure.

[Image: Tesla]

 

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52 Comments on “Tesla Model S Pricing Strategy Remains Unfathomable With Discounted 15 kWh Upgrade...”


  • avatar
    tnk479

    It’s probably just a matter of time now until Tesla use their software to allow customers to temporarily access the restricted portion of the battery for a fee. I guess the use case would be road trips which most of us rarely take.

    I would love to know if that additional battery capacity is actually being charged. As I understand it, batteries last longer when you don’t fully discharge them. I would like to know if Tesla spreads out the discharge of all available batteries in a 75 that is purchased as a 60. If so, then the batteries you haven’t purchased access to are actually serving a purpose by reducing the depth of discharge of the battery capacity you did purchase access to.

    • 0 avatar
      Matt Posky

      I expect you’ll be right. They’ve already offered a trail periods of cars running at higher capacities to entice customers to purchase the software upgrades.

      I have heard a lot of conflicting information on how Tesla manages the discharge on the 60s and would like to get to the bottom of that mystery myself.

  • avatar
    Ryoku75

    I’m used to hearing people fuss over $60 DLC on-disc for their videogames, sometimes arguments against it will use cars an an analogy (paying $60 for cup holders that are already there), stuff like that.

    Little do they know their analogy’s arent far off from the reality, just change “cup holders” to “power” and add a few more 000s.

    Can we say that Teslas are officially automotive crippleware?

    • 0 avatar
      probert

      I don’t think we can say that.

      I think we can say that, apart from weaponry, they’re the only US manufactured goods that the rest of the world is interested in, and the largest selling luxury car in Europe.

      We can also say that they will be the major manufacturer of batteries and energy storage systems in the world.

      We can also say that they will be creating over 6500 new manufacturing jobs in the US in 2017.

      These are things we can safely say.

  • avatar
    wiggles

    This just confirms that Tesla is more like a smartphone app. You are not upgrading, just paying for access rights on what is already there.

  • avatar
    VoGo

    Unfathomable? I think we can fathom the pricing strategy. You just don’t like it, Matt.

    Mark, if we’re going to pretend this is ‘news’, can we at least start writing headlines that are more accurate than they are cutesy snarkastic?

  • avatar
    SCE to AUX

    “This year it added numerous surprise fees onto its supercharging network”

    They were only a surprise if you weren’t listening. Probably not one Model 3 reservist cancelled their order because of this ‘surprise’ news.

    • 0 avatar
      Nick_515

      Well, once you start at “unfathomable” it’s really hard to change the tone of it all, so you kinda gotta stick to the shtick.

    • 0 avatar
      Thinkin...

      Might the author be willing to list these “numerous surprise fees” that he says were implemented?

      As far as I can recall, there were two: 1) a fee for leaving a car at a charging station after it is fully charged, and 2) the idea that some owners will be paying to charge.

      If there are more surprise fees regarding Tesla superchargers, I’d love to know.

  • avatar
    blueflame6

    This is a good reminder that while you may think you own your Tesla you really don’t.

  • avatar
    SCE to AUX

    “Anyone who purchased a Model S 60 after November and upgraded their battery software before the price cut, has to be kicking themselves right now.”

    Matt, Fiat dropped their prices for 2017, in an article you wrote:
    https://www.thetruthaboutcars.com/2016/11/fiat-aggressively-reducing-prices2017/

    What about those irate 2016 Fiat buyers?

    Fiat can’t give their cars away, Tesla can’t build them fast enough, and yet you reserve criticism for Tesla. Think about that for a moment.

  • avatar
    nickoo

    I could buy a pretty decent used car for 7,000!

    Seems like a lot of money for 45-60 more miles of range.

  • avatar
    jacob_coulter

    I have to think this really annoys owners and sours them on the whole brand, just a shady way of offering extra options.

    I know everyone can bring up a software example, but with a car it’s totally different psychology.

    It would be like buying a new house and some of the rooms were pad locked until you paid a bit more.

    • 0 avatar
      mcs

      It’s not just Tesla. My son’s Toyota nav system is disabled unless he pays for an SD card to enable it. What about all of the cars with Sirius/XM radio. Unless you pay for a subscription, you don’t get the service. Lots of cars are capable of internet access, yet it’s not enabled unless you pay more money.

      What’s shady about it anyway? They’re upfront about it. Do you think it would be better if they offered the 60 with a non-upgradeable battery? I think it’s better to offer the car that’s upgradeable. Even if you never need it, it’s nice to know it’s there.

      • 0 avatar
        jacob_coulter

        A satellite radio subscription is not an apples to apples comparison, that’s like buying a TV and expecting free cable. It’s from a totally different provider for one thing.

        A product being hobbled and not “costing” the manufacture anything to unlock it is just a poor model for a car.

        Legally, I think Tesla should of course be able to do this, but my point is it gives the customer the feeling they don’t own the product but are merely renting it and are subject to the whims of the “real” owner as to whether they get to fully use it. It feels like a ransom.

        I guarantee you if you polled actual customers on this, even Tesla fanswould say it rubbed them the wrong way.

        • 0 avatar
          Kyree S. Williams

          So, because it doesn’t cost Autodesk anything (except negligible server space) to give me access to their Inventor 3D modeling program, they should just do it for free?

          I think not.

          We established long ago that software and software upgrades have a monetary value, whether they need to be manually added, or they just need to be enabled with a couple of variables. It was only a matter of time before this pricing model was introduced the car world as well.

          Also, some of the things that BMW, Volkswagen, Ford, Toyota , and other conventional automakers charge customers hundreds and thousands of dollars for are token costs for said automakers. They’ll charge you $500 for heated seating hardware that cost them $20, or $1000 for a paint option that isn’t black or white (which doesn’t cost them much money at all), or a little SD card with map data to activate the nav system, which clearly doesn’t cost them anything close to the $800 they ask you for. So Tesla’s pricing model is hardly offensive.

          • 0 avatar
            Ryoku75

            Key word being Hardware, if Tesla made you pay for heated seats or cruise control they’d install the hardware but make you pay for access.

            I see no issue with XM/Sirus, internet, or whatever requiring a monthly fee. I may own a TV but that doesnt make its services free.

        • 0 avatar
          mcs

          @jacob_coulter: that’s like buying a TV and expecting free cable.

          Actually, I’ve got over 100 channels on my new tv between OTA and LGs ChannelPlus internet channels. Satellite radio is still hardware that doesn’t function until you pay a fee to unlock it.

          As far as giving the customer the feeling “they don’t own the product but are merely renting it” goes, maybe the fact that they most likely leased it gives them an even bigger feeling that they rented it.

          I’m actual EV driver and plan on multiple higher end EV purchases in the future. One of those might be a P60D, but I see the upgrade as an insurance policy that if it turns out that I need a little extra range for that particular car, I can get it overnight.

          This model exists for my current EV, a Leaf. Not many people realize it, but you can unlock a tiny bit more acceleration by ordering from Japan what Nissan calls “sports resetting” which consists of a new VCm that unlocks full power on initial acceleration. Stock models have a limiter. It’s enough of a boost to surprise a few people at traffic lights.

      • 0 avatar
        kmoney

        On most FCA cars, all you have to do to get NAV is pay for the activation code…everything else is already in place, but disabled whether you choose it or not.

        The Tesla lockout model would also have implications for leases or dealer trade-ins, as they could potentially just get Tesla to ‘activate’ it at zero cost before resale and they now have a more valuable car than what they paid the customer out for on the model 60. This is exactly what my company does with the FCA products mentioned above, but of course with smaller dollar figures involved…

  • avatar
    jthorner

    What kind of buyers are perfectly happy know that their Tesla in fact has a certain feature they desire, but that it is turned off by the factory until an additional ransom (fee) is paid?

    • 0 avatar
      Nick_515

      the ones that didn’t pay as much as their neighbor who got the bigger capacity, and did so after careful consideration.

    • 0 avatar
      psarhjinian

      This happens in more cars than you think; a lot features exist in software only (stability control, remote-keyless entry, navigation) and can be installed or unlocked with very little physical effort.

      Even power levels are software; otherwise, why do certain otherwise-identical powertrains suddenly make a lot more HP or lb/ft when, eg, the badge changes from “Nissan” to “Infiniti” or “VW” to “Audi”.

      Tesla’s behaviour is a little bit more egregious, but it’s hardly the only or the first.

  • avatar
    kmoney

    Maybe some clever soul will find a way to hack the upgrade… Then we will see the ads on craigslist like the guys who upgrade your NAV for 1/3 the price of the dealership — ‘Tesla battery upgrade, $999, no more getting screwed by your dealership, same day service.’

    • 0 avatar
      jacob_coulter

      Yea, and I hope it happens.

      I have a copy of Techstream for Toyota/Lexus that I can run on my laptop for diagnosing my Lexus and enabling/ disabling certain features.

      And I didn’t pay Toyota $10k for the software.

      • 0 avatar
        Ryoku75

        What kind of features can you unlock with Techstream?

        I’m sure modders will arrive soon, I just hope they’re legit.

        • 0 avatar
          yamahog

          http://www.lexus.com/pdf/service/IS_LPS.pdf

          Generally it’s settings like – lock this, orient your compass like this, ect. Some cars have more interesting features, like on the LS430 you can chose the temperature of the a/c compressor – either the ‘efficient’ setting or the ‘most cold’ setting.

          • 0 avatar
            Kyree S. Williams

            Those are just settings. I wouldn’t say it’s comparable. With conventional cars, the vast majority of upgrades have physical components attached to them, like blind-spot monitoring or heated seats. The only two software-based upgrades that you see on most cars are navigation (FCA, Ford, Toyota) and engine-tuning profiles.

            With Tesla, they pretty much include all the hardware and disable the software unless it’s paid for. And I suspect Tesla will try a lot harder to lock down the car’s software than other automakers since it does use that pricing structure.

  • avatar
    heavy handle

    Am I one of the few people who has noticed that “traditional” manufacturer incentives have bigger swings each and every month?

    At least Tesla is up-front about it. Pricing on pickups is truly unfathomable.

    • 0 avatar
      psarhjinian

      It’s not unfathomable, you just aren’t aware of the inputs, such as “what sales and revenue targets does the VP in question need to hit in order to buy a third yacht?”

  • avatar
    stingray65

    Digital differentiation is done all the time. Different model number printers, phones, computers often have the same innards, but differing speeds and features that are enabled/disabled with a few lines of software code, and which are used to justify differing prices. Traditional car makers do it also – I believe the engines in the BMW 320i and 328i are identical with the differing horsepower ratings a simple matter of coding of the engine control software. Of course in the old days buying a 320 meant a 2 liter 4 cylinder, while a 328 was a 2.8 liter 6, which no doubt cost BMW differing amounts of money to produce and hence helped justify the price difference. Today they do it with “costless” software and keep 100% of the price difference.

    • 0 avatar
      yamahog

      ” I believe the engines in the BMW 320i and 328i are identical with the differing horsepower ratings a simple matter of coding of the engine control software.”

      I don’t know if there’s a definitive answer out there on the internet and the concensus is that the engines are almost identical, but I’ve heard that the 320i cars use lower quality pistons than the 328i cars. Even Dinan uses different tunes on the two engines and the 320i makes less power after a tune than the 328i does stock.

  • avatar
    Bill Wade

    I found this rather amusing.

    http://mashable.com/2017/01/16/tesla-stranded-phone-keys/

  • avatar
    stuki

    Charging $20K for a Bentley, and then another $300K to swap the badge from a VW to a Bentley one and remove a banana from one of the exhaust pipes, is one of those business strategies that just may make sense, as long as you face no competition whatsoever…..

  • avatar
    OldManPants

    Blithe acceptance of unfathomability is central to any religious adherence.

    Insanely great inshallah um Gottes willen MAGA.

  • avatar
    thatsiebguy

    Tesla should take the IBM approach. Build every car with the same large battery and just restrict access based on price point/range. Allow people to purchase temporary access for trips and such, or pay later to unlock(upgrade) to the full range. It would cut down on production costs associated with supporting different size batteries, and provide better battery use since you’ll have more cells to help spread the load out over the life of the car.

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