"Activated" car options.

It used to be simple on car options. You wanted the option, you checked the box, you paid, the factory put the option on the car. Wanted the automatic transmission? Pay and the car arrived with it.

Now we are getting to a weird time. They are starting to put the options on the car but they are "unlocked" if you choose to pay. Think about that. You want the option, all you do is pay at the dealer and they do a software update, then you have it. But the thing was on the car the whole time! IOW, you paid for the equipment at delivery, then paid more to use it.

This can be taken two ways. Either they are ripping off the person who did not take the option as the "hardware" is in the price of the car, or they are ripping off the person who buys it as they are paying extra for an "extra" that was already there.

A scary part is they could deactivate the option at trade-in and charge again to the guy buying certified pre-owned.

Thoughts?

That depends on the option.

Air Conditioning, for example, takes a lot of hardware, and reduces the gas mileage, even when it's not being used. So that would be a rip off for the person not purchasing it.

Cruise Control takes very little hardware. It's really just a couple extra buttons and sensors being fed to the computer that already controls the engine. Some of the cost for the option goes towards the manufacturer's and dealer's insurance, if it needs to be recalled. So that isn't really a rip off for either customer.

HOWEVER, this creates a whole new category of customer: a hacker who turns the option on for free.

He's talking about some of Tesla's business practices.

You have two identical cars in terms of hardware.

One of them has better performance in terms of things like acceleration and miles per charge.

The difference is if you paid to unlock those features in software.

At resale, those features become locked, and the new owner has to pay to unlock them.

I think on the one hand, if there is some improvement in software that took a lot of engineering time to develop, they should be able to sell that software as an upgrade.

I think it sucks, though, to lock that upgrade at a change of ownership and make the new owner pay for it as well.

The battery thing is completely artificial. They found it was more economical to make just one bigger battery and/or the smaller battery couldn't be made for much cheaper, but since they promised a bunch of cars for cheaper with less battery capacity, they accomplished that with software. You can pay to unlock the full potential of the battery in the car.

so mostly I think it sucks, with the exception of something like their supercruse/autopilot software.
all cars will have the forward facing camera, and adaptive cruise control which uses it, but for the massive software development effort that went into making a self-driving car, having that as a pay-extra software feature I think is fine.

We have done this in the software industry for as long as I can remember. We sell one software package and you pay to enable different features. I worte an accounting y=system about 30 years ago that is you wanted payroll functionality or POS functionality you paid me more and I gave you a code that would turn it on.

Quote: Dalex64

He's talking about some of Tesla's business practices.

Others are starting to do it as well. BMW IIRC.

Quote: DRich

We have done this in the software industry for as long as I can remember. We sell one software package and you pay to enable different features. I worte an accounting y=system about 30 years ago that is you wanted payroll functionality or POS functionality you paid me more and I gave you a code that would turn it on.

I sold Toshiba phone systems 20 years ago that were the same. How many ports do you want, just a code to turn more on and of course a "small" fee.

Intel has made CPUs this way for years. https://en.wikipedia.org/wiki/Celeron

The airlines do something similar. Taking advantage of it is known as Hidden City Ticketing. You need to fly from A to B, and the ticket costs $800. But a flight from A to C, with a layover at B, costs only $400. So you book the A to C flight and skip the second leg.

The airlines cry foul if you do this, but it's virtually impossible to defend or believe their claim of poverty in this situation.