5 ms·

I'm confused, If it's using the same kwh battery, How does this save money for Tesla ?

ceejayoz 3y ago
More sales to folks who were borderline on buying one, presumably still at a (smaller) profit. https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination
LanceJones 3y ago
It doesn't. It really only allows them to sell the S and X to a new segment of the market that couldn't wouldn't afford the regular price.
natch 3y ago
It makes them more money if more people can afford the car. Market segmentation 101.
williamscs 3y ago
Probably the ability to recoup the cost with a subscription after sale (or one-time purchase like FSD). Lower the cost to get into as many homes as possible, then at least a few folks will pony up for it.
deleted 3y ago
[deleted]
idopmstuff 3y ago
It's pretty standard price discrimination - think of it like a supermarket offering a coupon. You can get the same bottle of ketchup for full price or 20% off, but you have to invest some time and effort to find, clip, and bring the coupon for the discount. If there's someone out there who's considering another car that's a bit cheaper but would be willing to pay for a model X at this $10k-discounted price, they're getting a sale that they otherwise wouldn't get (albeit with lower margins). Meanwhile, people who aren't price sensitive will probably just buy the regular-priced one. They're presumably working on the assumption that profit from additional sales to people who would otherwise go with something else will outweigh any cannibalization of people who would pay for the higher-priced one taking the discounted one instead.
- edrxty 3y ago
  This suggests that these software unlocks are actively corrupting the market by allowing you to compete via wasted materials instead of building better products. This sounds like something that should be illegal for the health of the market.
  - Gigachad 3y ago
    It's really a philosophical problem rather than a practical one. Think of the car as a black box, one costs $10k less and has less features. This is normal and well accepted. Does the fact that the features are actually there but locked matter considering the end result you get as a consumer is identical in both scenarios?
    - ThatPlayer 3y ago
      I don't like spinning 'pay to unlock' as a positive, but when you do compare it like that, being able to pay to unlock is a slight advantage of the software-locked one versus the one without the capacity. Without it, if you decide you want the extra range, you'd have to sell your old one, and buy a new one.
      - Gigachad 3y ago
        As long as there was nothing deceitful, I don't see the issue. You were told the specs and the price up front and received what was advertised. And like you say, you get the added benefit of being able to change your mind later for no additional cost or hassle.
        edrxty 3y ago
        Fundamentally if you buy something you should own it entirely. This precludes that.
robotresearcher 3y ago
They sell more cars when they are cheaper. The more they sell, the cheaper each car is to make, because the very high fixed costs of the plant are amortized over more units. The first car out of the factory cost billions to make. The next one a bit less, and so on.
jtriangle 3y ago
Manufacturing one thing is always cheaper than manufacturing a dozen things. In this case, it's likely cheaper to make 1 battery and use it everywhere than it is to save a little on cells but have to manufacture a dozen or so bespoke batteries for all of their offerings.
brandonagr2 3y ago
It saves a lot of money compared to having a built car sitting in a lot waiting for a buyer.
dzhiurgis 3y ago
Because the entire battery cells cost less than 10k to begin with. They can move the price any way they like.

More sales to folks who were borderline on buying one, presumably still at a (smaller) profit. https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination

LanceJones 3y ago

It doesn't. It really only allows them to sell the S and X to a new segment of the market that couldn't wouldn't afford the regular price.

natch 3y ago

It makes them more money if more people can afford the car. Market segmentation 101.

williamscs 3y ago

Probably the ability to recoup the cost with a subscription after sale (or one-time purchase like FSD). Lower the cost to get into as many homes as possible, then at least a few folks will pony up for it.

deleted 3y ago

[deleted]

idopmstuff 3y ago

It's pretty standard price discrimination - think of it like a supermarket offering a coupon. You can get the same bottle of ketchup for full price or 20% off, but you have to invest some time and effort to find, clip, and bring the coupon for the discount. If there's someone out there who's considering another car that's a bit cheaper but would be willing to pay for a model X at this $10k-discounted price, they're getting a sale that they otherwise wouldn't get (albeit with lower margins). Meanwhile, people who aren't price sensitive will probably just buy the regular-priced one. They're presumably working on the assumption that profit from additional sales to people who would otherwise go with something else will outweigh any cannibalization of people who would pay for the higher-priced one taking the discounted one instead.

edrxty 3y ago
This suggests that these software unlocks are actively corrupting the market by allowing you to compete via wasted materials instead of building better products. This sounds like something that should be illegal for the health of the market.
- Gigachad 3y ago
  It's really a philosophical problem rather than a practical one. Think of the car as a black box, one costs $10k less and has less features. This is normal and well accepted. Does the fact that the features are actually there but locked matter considering the end result you get as a consumer is identical in both scenarios?
  - ThatPlayer 3y ago
    I don't like spinning 'pay to unlock' as a positive, but when you do compare it like that, being able to pay to unlock is a slight advantage of the software-locked one versus the one without the capacity. Without it, if you decide you want the extra range, you'd have to sell your old one, and buy a new one.
    - Gigachad 3y ago
      As long as there was nothing deceitful, I don't see the issue. You were told the specs and the price up front and received what was advertised. And like you say, you get the added benefit of being able to change your mind later for no additional cost or hassle.
      - edrxty 3y ago
        Fundamentally if you buy something you should own it entirely. This precludes that.

robotresearcher 3y ago

They sell more cars when they are cheaper. The more they sell, the cheaper each car is to make, because the very high fixed costs of the plant are amortized over more units. The first car out of the factory cost billions to make. The next one a bit less, and so on.

jtriangle 3y ago

Manufacturing one thing is always cheaper than manufacturing a dozen things. In this case, it's likely cheaper to make 1 battery and use it everywhere than it is to save a little on cells but have to manufacture a dozen or so bespoke batteries for all of their offerings.

brandonagr2 3y ago

It saves a lot of money compared to having a built car sitting in a lot waiting for a buyer.

dzhiurgis 3y ago

Because the entire battery cells cost less than 10k to begin with. They can move the price any way they like.