3 ms·

The only reason to software lock the capacity of the battery in this manner is to extort customers. There is apparently absolutely no additional labor, no addi

by bena 4y ago

The only reason to software lock the capacity of the battery in this manner is to extort customers. There is apparently absolutely no additional labor, no additional material, nothing to distinguish a P90 from a P60 except for a software lock. That's labor that was not necessary. All the work needed to software lock the charge capacity of the battery could have been avoided. The only way it makes sense is if you get to charge more for the exact same thing. Which is what Tesla is apparently doing. Essentially, every P90 should be $4500 cheaper and every P60 should have the range of a P90.

mlyle 4y ago
> The only reason to software lock the capacity of the battery in this manner is to extort customers. I have mixed feelings about schemes like this, but I don't think they're inherently bad. You start off making 60kWh and 90kWh cars. Customers are happy buying both. You notice you can save costs overall by just selling the 90kWh cars at the 60kWh price-- but revenue will fall if you don't lock the pack down to 60kWh. Would it be better to force Tesla to maintain two different physical pack SKUs and incur more costs if they want different pricing for the different capacities? And you do save some money, even, with the locking-- after all, the 90kWh pack used as a 60kWh one is far less likely to need warranty service-- it has spent less time at the extremes of charge and it can fall all the way from 90 to 54kWh instead of 90 to 81kWh. This is just like binning with CPUs-- at first, the yields control whether something is an 8 core or 6 core part. Later, you lock some 8 core parts down to be 6 cores so you can sell them at a lower price.
- crooked-v 4y ago
  There's a huge difference here compared to binning: binning generally involves chips that are physically incapable of performing to the higher spec because of defects.
  - mlyle 4y ago
    As I stated in my comment: this is true at the beginning of a process node with a new design. But yields improve, and eventually you end up with too many parts in the high bins and nowhere near enough in the value bins-- so you end up blowing fuses on parts that test fully OK to make them be 4 cores or 6 cores. (And now, Intel is about to let Xeon customers pay to unlock additional cores...)
    - IronWolve 4y ago
      I was going to mention this also, software defined processors, where you have to pay intel to unlock features. But the original buyer unlocks and sells the PC, it should revert to the stock and limited cpu. Here they gave the owner a 90, then came back and limited it to 60, after the fact, years later.
      - mlyle 4y ago
        > Here they gave the owner a 90, then came back and limited it to 60, after the fact, years later. Yah. And the buyer was a buyer in good faith of a 90 product that no one expected to be snapped down to a 60 artificially afterwards. I agree this is very problematic.
  - ericd 4y ago
    Initially that’s the case, but once the production yield improves, they frequently start gimping large numbers of them.
- bena 4y ago
  Or. And I know this is radical. But stop selling the 6 core and sell the 8 core for the price of the 6. Yes revenue will fall, but your costs fell as well. Your margin should be roughly the same. Anyway, I thought that's what progress was supposed to be. We get better at making things, those things become cheaper. If the only difference between two physical items is that I'm not allowed to use all of one, what is the actual difference? Why are we justifying these corporations taking us for a ride?
  - mlyle 4y ago
    > Or. And I know this is radical. But stop selling the 6 core and sell the 8 core for the price of the 6. But you still get some 6 core parts-- just not enough to meet demand. In general, suppliers prefer modulating the mix of supply of their products entering the retail chain over endlessly modulating pricing to try and match demand. > Why are we justifying these corporations taking us for a ride? Well, one fundamental underlying reason is that deadweight losses fall when you are able to segment markets and adjust pricing for each (price discrimination).
    - bena 4y ago
      The demand for 6 core over 8 core is simply because the 6 core costs less than the 8 core. If the 8 core cost the same as the 6 core, you'd buy the 8.
      - mlyle 4y ago
        > The demand for 6 core over 8 core is simply because the 6 core costs less than the 8 core. If the 8 core cost the same as the 6 core, you'd buy the 8. I don't really understand your comment in the context of our discussion-- we're talking about price discrimination. The whole point is that you have different prices for different segments to match demand. So, yes, of course. Initially, you set the 6 core price and 8 core prices to match actual production yields. Later, as your yields improve, you use the different SKUs for price discrimination, which captures some of consumer surplus (ewww) and eliminates deadweight losses (yay).
- agloeregrets 4y ago
  There is actually a second catch here. A Software locked 90>60 gets less range than a native 60kWh car for the exact reason why your binning example makes no sense here. Tesla is building the same packs and locking down the hardware via software with no yield reason but more importantly, in binning a 6 core part is a 8 Core part with a defect or not. A 60kWh battery is not a defective 90kWh pack at all, it's an entirely different component weighing hundreds of pounds less. the 90kWh pack cars eat tires faster, have worse MPGe, and overall are Ewaste.
  - mlyle 4y ago
    > A Software locked 90>60 gets less range than a native 60kWh Yah, a little less, this is true. It also is less damaged by charging to 100%, has better regen, charges faster, and can be expected to have a much better lifespan. You could make a lot of arguments both ways for which one is better. > A 60kWh battery is not a defective 90kWh pack at all, The point I'm making is that most 6 core parts are 8 core parts with no defect, so the distinction becomes an artificial one for the purpose of price discrimination rather quickly. > locking down the hardware via software with no yield reason In addition to the market segmentation reason, there's also the much-better-warranty-yields reason, and the less-need-to-predict-what-buyers-will-want reason.
LeifCarrotson 4y ago
"Extort customers" is another way of saying "perform price segmentation". Customers hate it, especially when coupled with economies of scale that make building one physical thing and selling two software-separated different things, but it's perfectly rational if abhorrent capitalism. As I quoted literally yesterday regarding the BMW heated seat subscription [1]: > And God help you if an A-list blogger finds out that your premium printer is identical to the cheap printer, with the speed inhibitor turned off. [2] You wrote: > Essentially, every P90 should be $4500 cheaper and every P60 should have the range of a P90. This is not realistic, or is at least overly simplified. There are customers who would not buy the product at the P90 price, but still will give Tesla money - just a little less. Tesla wants that money. There are also customers who are willing to spend a lot more than the list price of a P60, and Tesla wants that money too. Tesla also doesn't want to build and stock two different sized battery packs. How would you propose that this should work? Regulate price segmentation? Better information for consumers? Moral pleading for megacorporations to act against their financial interests? [1] https://news.ycombinator.com/item?id=32225588 https://news.ycombinator.com/item?id=32225588 [2] https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...
- mlyle 4y ago
  > but it's perfectly rational Indeed, price discrimination eliminates deadweight losses and improves economic efficiency.
Dylan16807 4y ago
> There is apparently absolutely no additional labor, no additional material, nothing to distinguish a P90 from a P60 except for a software lock. > Essentially, every P90 should be $4500 cheaper and every P60 should have the range of a P90. Oh come on, don't take this to a ridiculous extreme. I'm pretty sure this logic would say that if a store has a loss-leader then they should sell everything at a negative 20 percent profit margin. Hell, even without software locks, if they want to sell half the stock at one price and half the stock at a different price that's fine.
- bena 4y ago
  How is it a ridiculous extreme. If they're the same thing except you're just not allowed to use the full capacity of one, then what is the difference? It's not like two physically different products. My issue is that there is no differentiator besides "didn't give enough money".
  - Dylan16807 4y ago
    Well, like I was trying to say, simplify it even further. Make it exactly the same product, some sold at price A and some sold at price B. Just because I can afford to sell some at a cheaper price doesn't mean I can afford to sell all of them at a cheaper price. Right? We can take issue with the software lock without saying something silly like "the lowest price must be the correct price". Sometimes the lowest price actually loses money. That's why I brought up loss leaders.
    - bena 4y ago
      That just means both of your prices are wrong.
      - Dylan16807 4y ago
        Yeah, basically, that's my entire argument.
aflag 4y ago
Not every P60 is a P90 with software cap. Only a few, when a P60 battery is not available. They swapped the battery for a better one in order to keep waiting times low and costumers happy. That's a good thing. Ideally, if it's an one off thing, they should just give the upgrade for free to the customer. However, if it's more of a systematic issue that extended for a while, it's reasonable that they cap it to avoid abuse. Anyway, now that they already let it out without capping, it's pretty shitty to suddenly cap it. Specially if the car now has a different owner.

by bena 4y ago

mlyle 4y ago

> The only reason to software lock the capacity of the battery in this manner is to extort customers. I have mixed feelings about schemes like this, but I don't think they're inherently bad. You start off making 60kWh and 90kWh cars. Customers are happy buying both. You notice you can save costs overall by just selling the 90kWh cars at the 60kWh price-- but revenue will fall if you don't lock the pack down to 60kWh. Would it be better to force Tesla to maintain two different physical pack SKUs and incur more costs if they want different pricing for the different capacities? And you do save some money, even, with the locking-- after all, the 90kWh pack used as a 60kWh one is far less likely to need warranty service-- it has spent less time at the extremes of charge and it can fall all the way from 90 to 54kWh instead of 90 to 81kWh. This is just like binning with CPUs-- at first, the yields control whether something is an 8 core or 6 core part. Later, you lock some 8 core parts down to be 6 cores so you can sell them at a lower price.

crooked-v 4y ago
There's a huge difference here compared to binning: binning generally involves chips that are physically incapable of performing to the higher spec because of defects.
- mlyle 4y ago
  As I stated in my comment: this is true at the beginning of a process node with a new design. But yields improve, and eventually you end up with too many parts in the high bins and nowhere near enough in the value bins-- so you end up blowing fuses on parts that test fully OK to make them be 4 cores or 6 cores. (And now, Intel is about to let Xeon customers pay to unlock additional cores...)
  - IronWolve 4y ago
    I was going to mention this also, software defined processors, where you have to pay intel to unlock features. But the original buyer unlocks and sells the PC, it should revert to the stock and limited cpu. Here they gave the owner a 90, then came back and limited it to 60, after the fact, years later.
    - mlyle 4y ago
      > Here they gave the owner a 90, then came back and limited it to 60, after the fact, years later. Yah. And the buyer was a buyer in good faith of a 90 product that no one expected to be snapped down to a 60 artificially afterwards. I agree this is very problematic.
- ericd 4y ago
  Initially that’s the case, but once the production yield improves, they frequently start gimping large numbers of them.
bena 4y ago
Or. And I know this is radical. But stop selling the 6 core and sell the 8 core for the price of the 6. Yes revenue will fall, but your costs fell as well. Your margin should be roughly the same. Anyway, I thought that's what progress was supposed to be. We get better at making things, those things become cheaper. If the only difference between two physical items is that I'm not allowed to use all of one, what is the actual difference? Why are we justifying these corporations taking us for a ride?
- mlyle 4y ago
  > Or. And I know this is radical. But stop selling the 6 core and sell the 8 core for the price of the 6. But you still get some 6 core parts-- just not enough to meet demand. In general, suppliers prefer modulating the mix of supply of their products entering the retail chain over endlessly modulating pricing to try and match demand. > Why are we justifying these corporations taking us for a ride? Well, one fundamental underlying reason is that deadweight losses fall when you are able to segment markets and adjust pricing for each (price discrimination).
  - bena 4y ago
    The demand for 6 core over 8 core is simply because the 6 core costs less than the 8 core. If the 8 core cost the same as the 6 core, you'd buy the 8.
    - mlyle 4y ago
      > The demand for 6 core over 8 core is simply because the 6 core costs less than the 8 core. If the 8 core cost the same as the 6 core, you'd buy the 8. I don't really understand your comment in the context of our discussion-- we're talking about price discrimination. The whole point is that you have different prices for different segments to match demand. So, yes, of course. Initially, you set the 6 core price and 8 core prices to match actual production yields. Later, as your yields improve, you use the different SKUs for price discrimination, which captures some of consumer surplus (ewww) and eliminates deadweight losses (yay).
agloeregrets 4y ago
There is actually a second catch here. A Software locked 90>60 gets less range than a native 60kWh car for the exact reason why your binning example makes no sense here. Tesla is building the same packs and locking down the hardware via software with no yield reason but more importantly, in binning a 6 core part is a 8 Core part with a defect or not. A 60kWh battery is not a defective 90kWh pack at all, it's an entirely different component weighing hundreds of pounds less. the 90kWh pack cars eat tires faster, have worse MPGe, and overall are Ewaste.
- mlyle 4y ago
  > A Software locked 90>60 gets less range than a native 60kWh Yah, a little less, this is true. It also is less damaged by charging to 100%, has better regen, charges faster, and can be expected to have a much better lifespan. You could make a lot of arguments both ways for which one is better. > A 60kWh battery is not a defective 90kWh pack at all, The point I'm making is that most 6 core parts are 8 core parts with no defect, so the distinction becomes an artificial one for the purpose of price discrimination rather quickly. > locking down the hardware via software with no yield reason In addition to the market segmentation reason, there's also the much-better-warranty-yields reason, and the less-need-to-predict-what-buyers-will-want reason.

LeifCarrotson 4y ago

"Extort customers" is another way of saying "perform price segmentation". Customers hate it, especially when coupled with economies of scale that make building one physical thing and selling two software-separated different things, but it's perfectly rational if abhorrent capitalism. As I quoted literally yesterday regarding the BMW heated seat subscription [1]: > And God help you if an A-list blogger finds out that your premium printer is identical to the cheap printer, with the speed inhibitor turned off. [2] You wrote: > Essentially, every P90 should be $4500 cheaper and every P60 should have the range of a P90. This is not realistic, or is at least overly simplified. There are customers who would not buy the product at the P90 price, but still will give Tesla money - just a little less. Tesla wants that money. There are also customers who are willing to spend a lot more than the list price of a P60, and Tesla wants that money too. Tesla also doesn't want to build and stock two different sized battery packs. How would you propose that this should work? Regulate price segmentation? Better information for consumers? Moral pleading for megacorporations to act against their financial interests? [1] https://news.ycombinator.com/item?id=32225588 https://news.ycombinator.com/item?id=32225588 [2] https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...

mlyle 4y ago
> but it's perfectly rational Indeed, price discrimination eliminates deadweight losses and improves economic efficiency.

Dylan16807 4y ago

> There is apparently absolutely no additional labor, no additional material, nothing to distinguish a P90 from a P60 except for a software lock. > Essentially, every P90 should be $4500 cheaper and every P60 should have the range of a P90. Oh come on, don't take this to a ridiculous extreme. I'm pretty sure this logic would say that if a store has a loss-leader then they should sell everything at a negative 20 percent profit margin. Hell, even without software locks, if they want to sell half the stock at one price and half the stock at a different price that's fine.

bena 4y ago
How is it a ridiculous extreme. If they're the same thing except you're just not allowed to use the full capacity of one, then what is the difference? It's not like two physically different products. My issue is that there is no differentiator besides "didn't give enough money".
- Dylan16807 4y ago
  Well, like I was trying to say, simplify it even further. Make it exactly the same product, some sold at price A and some sold at price B. Just because I can afford to sell some at a cheaper price doesn't mean I can afford to sell all of them at a cheaper price. Right? We can take issue with the software lock without saying something silly like "the lowest price must be the correct price". Sometimes the lowest price actually loses money. That's why I brought up loss leaders.
  - bena 4y ago
    That just means both of your prices are wrong.
    - Dylan16807 4y ago
      Yeah, basically, that's my entire argument.

aflag 4y ago

Not every P60 is a P90 with software cap. Only a few, when a P60 battery is not available. They swapped the battery for a better one in order to keep waiting times low and costumers happy. That's a good thing. Ideally, if it's an one off thing, they should just give the upgrade for free to the customer. However, if it's more of a systematic issue that extended for a while, it's reasonable that they cap it to avoid abuse. Anyway, now that they already let it out without capping, it's pretty shitty to suddenly cap it. Specially if the car now has a different owner.