Tesla Launches Cheaper Cars With Software Limited Batteries

AlphaAtlas

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Tesla previously announced that they're discontinuing the 75 kWh battery pack for their Model S sedan and Model X SUV, and Elon Musk mentioned that the company needs to keep prices more competitive than ever if Tesla is to survive. Now, Electrek says that Tesla is launching variants of the Model S and Model X with software-locked battery packs. The base and "extended range" versions of the electric sedans come with the same physical 100 kWh battery, but the lower end models shave off about 8% of the battery capacity via software in exchange for a price tag that's about $8000 lower than the fully enabled model. Thanks to cageymaru for the tip.

For those of us in the community who were expecting a hardware upgrade, especially a harmonization of Tesla's battery architecture based on Model 3's 2170 cells, this is disappointing. From a business standpoint, it makes sense. Tesla is streamlining the lineup significantly by basically making a single version of Model S and Model X with the exception of a slightly more powerful powertrain for the performance versions. They are now more clearly differentiating Model S and Model 3 with now even the base version of Model S having as much range as the top version of Model 3. From a customer standpoint, I would choose those software-locked versions over the "Extended Range" versions any day.
 

jardows

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So they bring the price down 8K, but the production costs of these vehicles will be no less than the higher capacity variants? I'm confused on how this will "save the company" unless Musk is betting on lots of people paying that much cash for the extended range.
 

[Spectre]

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So they bring the price down 8K, but the production costs of these vehicles will be no less than the higher capacity variants? I'm confused on how this will "save the company" unless Musk is betting on lots of people paying that much cash for the extended range.
Or, in 6 months charge users $8k to unlock the software
 

NKD

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How long do you figure it takes hackers to figure out how to "unlock" the rest of the battery capacity? My guess is less than 2 weeks.
Honestly for 8% reduction is it really worth messing with the car opearating system? I wouldn't fuck with it with at all. That price reduction is worth it while only losing 8%. Hackers can try but not sure if average should consider it worth messing with.
 

ThatsAgood1jay

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Ok, if this is true. What is the net gain for Tesla? They've simplified manufacturing by only having to supply one battery pack. But why artificially limit the vehicles capability? Is it solely to feed superiority complexes?
 

NKD

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So they bring the price down 8K, but the production costs of these vehicles will be no less than the higher capacity variants? I'm confused on how this will "save the company" unless Musk is betting on lots of people paying that much cash for the extended range.

Well maybe the price of the batteries is going to come down as well. Now that the production hell is over, I think most of the cost savings is going to come from that as well. I don't see them doing it unless there were cost savings that they were making in other areas.
 

NKD

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Ok, if this is true. What is the net gain for Tesla? They've simplified manufacturing by only having to supply one battery pack. But why artificially limit the vehicles capability? Is it solely to feed superiority complexes?
I would probably wait for more info. There is probably more to it.
 

Kellsindell

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Must have learned from EA to get people to pay for DLC. You'll be able to unlock 20% more for a few thousand, and then in another year, unlock another 20% for a few more thousand.
 

Skarth

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There actually is some sense to this cost-wise. Running a battery closer to its limits degrades it faster. Keeping that extra 8% in reserve will lead to a longer battery life, and likely, less warranty costs for Tesla in replacing batteries, which are expensive.

So it's not as simple as saying they are just locking you out of a "feature" purely to make money.
 

Jagger100

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It's more expensive not to use your billion dollar investment than to sell the resulting product for a loss. Each opportunity to build a tesla that isn't used still costs maybe $40,000 in decaying value. Instead you utilizes it and the parts and the cost is $80,000. You sell the car for $70,000 and you just cut your loss form $40,000 to $10,000. People generally don't understand the dynamics of huge capital investments. I see the most retarded claims about the cost of cars where a 10 year long capital investment in placed on a first year limited run and other stupid claims.
 

SixFootDuo

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I'm fairly sure that if anyone can keep hackers out of the battery sub-system, it will be Elon Musk and his team. LOL. They can freaking re-land a rocket launch vehicle from space back to earth. I'm gonna predict now that hackers will absolutely not be able to bypass the locks they put in place. I will almost put money on it.
 

jardows

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There actually is some sense to this cost-wise. Running a battery closer to its limits degrades it faster. Keeping that extra 8% in reserve will lead to a longer battery life, and likely, less warranty costs for Tesla in replacing batteries, which are expensive.

So it's not as simple as saying they are just locking you out of a "feature" purely to make money.
But the higher-end cars don't have the capacity soft lock. Is Tesla expecting higher warranty costs with the higher-end vehicles? "Pay more, get less reliability!" I imagine this battery, even at the "full capacity" already has some limiters in range for reliability purposes. Though we won't really know here, as I imagine that exact information is a closely guarded secret at Tesla.
 

sfsuphysics

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Time to hack the software.
Seriously... and this is where shit goes down hill. Because there's going to be an arms race between hacking to unlock versus forced updates which undo the hacking, and then hacking to prevent forced updates so you update from other 3rd party sites, and then that's when bad shit happens with your car.

Seriously this is the most fucking retarded idea ever, it's like selling you DLC when all the DLC is already on a DVD that you have and you're like "why should I pay you anything? I have it" So from a manufacturing cost standpoint the car cost no cheaper to produce, so the only way they make money off this is if you get enough people who want to pay for the unlock. Now get ready for the John Deere level of DRM for your fucking car. All the other car manufacturers want to do the same, and every car gets a V8 but they software lock to have either 4,6 or 8 cylinders able to fire.

And yes this is quite literally a "micro" transaction.... except it might cost you 10 grand to go from 50kWh to 100kWh... EVEN THOUGH YOU ALREADY HAVE A 100kWh BATTERY!!!
 

TrailRunner

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This isn’t the first Tesla battery with software limited capacity. The Model S 60 with 60 kWh capacity was the same as the Model S 75, but the car’s OS limited usable capacity. Interestingly enough, during Hurricane Irma Tesla actually pushed out a free update to unlock the capacity so that Tesla owners would be safer during evacuation.
Why would they do this again? Several reasons. At manufacturing scale, it may be cheaper to use one hardware design instead of multiple designs for different capacities. It adds flexibility for changing demand - just update firmware if you find you need more or fewer high capacity vehicles to sell. Also, the article states they’re dropping the Model S with the lowest range, so that thelowest end Model S has more range than the highest end Model 3. This simplification of the lineup is good for the sales team.
As for hacking the system to unlock capacity- doubtful that will be successful in the short term. In the long term, nothing is 100% secure, but you have no chance of getting your Tesla serviced at a Tesla store with hacked firmware, and with how locked down the whole Tesla ecosystem is, if you plan to own the car for any length of time you will need authorized service at some point.
 

mord

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MACROTRANSACTIONS, WOOOOOOOOOOOOOOOOOOOOOO!
Well, yeah. In this case, it's not a bad decision. Many people buy as much car as they can afford. If they cant afford the model they want, but can afford one 8k less... this gives that option.

6 months or a year later theyha some more cash and can afford to pay the 8k, or finance, to unlock the extra range they wish they had.
 

kju1

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Ok, if this is true. What is the net gain for Tesla? They've simplified manufacturing by only having to supply one battery pack. But why artificially limit the vehicles capability? Is it solely to feed superiority complexes?
Economies of scale. Some bean counter probably said if you simplify the manufacturing process not only do you make it more efficient but now you qualify for price breaks on components in the 100kWh batteries. I would bet most that their savings is coming from bulk orders of parts.
 

britjh22

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Ok, if this is true. What is the net gain for Tesla? They've simplified manufacturing by only having to supply one battery pack. But why artificially limit the vehicles capability? Is it solely to feed superiority complexes?
Basic product and price segmentation is a good business practice. They are simplifying processes to cut expenses, and at the same time capturing more total purchases at different pricing. There are consumers who would not be customers at the full price, but they are able to capture them at a lower price, and maybe even sell back the higher battery amount at a later date (welcome to car DLC!). Intel does the same sort of thing with their lineups, many different products with differing features and prices all based on the same manufactured product, even allows them to capture revenue on MFG issues like dead cores.
 

CombatChrisNC

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Assuming ~300 miles, 8% = 24 miles. ~400 miles = 32.

I wouldn't mess with it. I wouldn't pay for it.
 

mullet

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No software needed! I would recommend you turn your speakers up just a little. There is a new band in town and their music is awesome!!!!!!
 

Wierdo

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Time to hack the software.
Well while you're at it, do it under Tesla's white hat program, then you get a free Model 3, sell that and pocket $30-40k, use the rest to unlock the $8k option if you wanted it that bad. Double win and legally in the clear lol.
So they bring the price down 8K, but the production costs of these vehicles will be no less than the higher capacity variants? I'm confused on how this will "save the company" unless Musk is betting on lots of people paying that much cash for the extended range.
My guess:
- Yeah, $8k for 25 miles is not a great deal. But in this market segment some people might pay for it.
- A small 25 mile bump may potentially be offset by efficiency gains, less variation and complexity on the pack manufacturing side of things may mean more of them could be manufactured, and with less labor hours per pack.
- When those cars eventually get sold to the next person, Tesla might make money off the trade if the new owner - or the next - decides to order the option.
- I assume when Tesla gets the car back eventually and wanna re-sell it after inspection, they could decide to unlock the $8k option and sell the used car at a higher value.
- It's a win/win for customers as well, as the larger pack means less cell degradation and faster charging times, and the customer can get those perks without paying a dime.
- In times of disaster Tesla seems to like using that software unlock as a goodwill gesture, unlocking it to help customers escape floods or hurricanes, which is good PR and positive customers relations gesture.
 
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PantherBlitz

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Something tells me this policy will change soon after a SUV full of kids gets stuck on an exit ramp on its way to a charging station.
 

Zarathustra[H]

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8% seems like a curiously small amount to shave off for a distinct capacity.

That said, this is probably a great battery level if you have the money for a Model S. Save $8 grand and get built in battery protection with less wear due to never charging to 100%...
 

Spidey329

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So they bring the price down 8K, but the production costs of these vehicles will be no less than the higher capacity variants? I'm confused on how this will "save the company" unless Musk is betting on lots of people paying that much cash for the extended range.
From first glance it doesn't make much sense from a production saving standpoint, as the extra batteries (cost) and weight added probably don't add to the cost of having two SKU's given how modular the battery is within.

I think it might be a longer term play as they're gambling that the batteries will be cheaper in the long run as demand rises with increasing production efficiency. Plus, running a battery with 20-25% of the capacity lopped off by software means that you never get close to that critical 80-85% threshold where charging starts to really wear the battery. I think they already regulate their batteries to about 80% capacity for longevity.

So in short, the battery will last longer.
 

Zarathustra[H]

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So they bring the price down 8K, but the production costs of these vehicles will be no less than the higher capacity variants? I'm confused on how this will "save the company" unless Musk is betting on lots of people paying that much cash for the extended range.
They will probably get unlock fees down the road, either from the first or second users.

Don't underestimate the cost savings involved in streamlining processes, part counts and inventories. Now they only need to make one type of battery for the Model S, right? That has some real savings.

Maybe some tooling broke or wore out for the smaller capacity battery, and it was cheaper to just combine the two than to replace the tooling? Who knows.
 

BloodyIron

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I wonder if this has similar behavior to SSD under-provsioning, whereby the battery ends up having a longer life in terms of capacity retention. Hmm...
 

Dekoth-E-

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Here is a thought...how about they just lower the price since they obviously have the headroom? I absolutely despise shit like this.
 

[Spectre]

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From first glance it doesn't make much sense from a production saving standpoint, as the extra batteries (cost) and weight added probably don't add to the cost of having two SKU's given how modular the battery is within.

I think it might be a longer term play as they're gambling that the batteries will be cheaper in the long run as demand rises with increasing production efficiency. Plus, running a battery with 20-25% of the capacity lopped off by software means that you never get close to that critical 80-85% threshold where charging starts to really wear the battery. I think they already regulate their batteries to about 80% capacity for longevity.

So in short, the battery will last longer.
If the battery lasts longer they make less in service, parts, and support.
 

D-Money

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Makes perfect sense.
1. Say you pre-purchase at the slightly lower cost, if you ever want to enable the feature, they will charge more than that amount. Or say the next person, who buys it used, will want to enable it and pays the difference. They don't have to expend any maintenance costs after the person pays out. It's just enabled, after the charge.
2. The cars are not air-gapped. They are in *constant* communication back to Tesla (LTE and wifi). Any tampering will lead to the cars being permanently locked out of their charging network and no longer getting serviced, under warranty (paying full cost). Not worth it to anyone willing to pay for such a car. That's why you check the VIN before buying a used one to be sure you aren't getting one of those perma-banned cars.
 

Teenyman45

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I wonder if this has similar behavior to SSD under-provsioning, whereby the battery ends up having a longer life in terms of capacity retention. Hmm...
Well I was going to put that statement in the form of a question, but yes I had the same idea (including the comparison to SSDs) after seeing the article because electric cars, or at least GM models, already have a high degree of battery provisioning to account for long-term degradation.

Makes perfect sense.
1. Say you pre-purchase at the slightly lower cost, if you ever want to enable the feature, they will charge more than that amount. Or say the next person, who buys it used, will want to enable it and pays the difference. They don't have to expend any maintenance costs after the person pays out. It's just enabled, after the charge.
2. The cars are not air-gapped. They are in *constant* communication back to Tesla (LTE and wifi). Any tampering will lead to the cars being permanently locked out of their charging network and no longer getting serviced, under warranty (paying full cost). Not worth it to anyone willing to pay for such a car. That's why you check the VIN before buying a used one to be sure you aren't getting one of those perma-banned cars.
Tesla has offered over-the-air purchases for other software locked features at something of a premium compared to buying it in full with the car.
 

Brian_B

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I'll withhold judgement - it may be crazy enough to move the needle. I don't think 8K on those models is going to make a sale happen that wouldn't otherwise occur with the unlocked battery at the unlocked price... but I also don't sell cars for a living so idk.
 
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