Taken For A Ride
In my recent blog post, “Death by Upgrade”, I bemoaned the fact that companies trick you into thinking that their convoluted changes in services represent improvements for all of their customers, when in fact, they only benefit a few. Now a story comes along that describes another, even worse indignity for the consumer.
Bloomberg tells us: “Tesla’s Betting You’ll Pay $9,000 for a Software Upgrade”. A new Tesla model contains built-in capability for the car to use its full battery capacity and get maximum miles per charge. But full battery capacity is not activated! You have to pay an additional $9000 and then Tesla will be happy to flip a switch and fully activate your battery.
It seems Tesla intentionally downgraded the range of the vehicle, “crippled its range,” hoping, expecting you to pay to upgrade to full utilization of the battery pack.
It gets worse. Tesla does the same thing with autopilot options. They’re in the car when you buy it but it costs you another $2500 to activate them.
This brings new meaning to “upgrade”. Being taken for a ride comes to mind. Not in the way Tesla would like you to think of it.
Am I missing something? Don’t you expect that when buying a product, you’re able to take advantage of its full capabilities?
To say Tesla’s practice is not customer-friendly is an understatement.
I can see where this trend is going. “Sir, we are giving you the entire steak but that part on the right that is covered…for another 10 dollars you can eat that too.” “Congratulations. Here are the keys to your new house. You’ll notice the toilets don’t flush…for an extra $5000 we’ll activate them for you.”
Now consider this other news item, from the Economist: “Elon Musk’s Empire—Clouds Appear.” Tesla is having lots of problems right now. In spite of these problems they still managed to get thousands of people to give them $1000 deposits for cars that are still in design stage but hopefully will be manufactured and start to arrive in customer’s driveways…sooner or later.
This worked because they have a rabid, cult following. But cults can lose their appeal and cultists can wander off to better products and more customer friendly arenas. Think Blackberry.
When the news is bad about the financial health of your company, product recalls are ongoing and delivery times are slipping, it just doesn’t seem like the time to be out there irritating your customers and prospects.
Instead of headlines about how you’re forcing customers to pay to fully utilize your product’s capabilities, wouldn’t you rather see articles about how you’re delivering an excellent product that outperforms all the competition? How you price fairly with no gimmicks and extra costs?
While I’m sure there are people happy to pony up for the upgrade to get full use of their Tesla car, there are many others who will feel ripped off. And competitors are undoubtedly already preparing their messages that point to the marvelous capabilities of their cars, for which you don’t have to pay a penny extra.
I don’t know that “you’re missing something,” in fact, I think you nailed exactly how many people will feel about it.
But I’m a nerd. So I think of the car as having a computer brain, which runs on software. Elon Musk is also a nerd, so it’s possible he’s thinking of it this way:
Buyers might not want to pay for software development costs associated with features they don’t want — so let the people who want the extra extra features finance those software development costs.
Thinking about it a little further. Home and business computers ship with demo versions of software that stop working unless you pay for the license code. It’s a free trial. Some people like it. Some people don’t. I wonder when Tesla will start doing the same.
And then there’s the issue of imported performance cars. Most, if not all, come with speed limiters (of 155 mph). If your speed limiter is software controlled, you can take it to a tuning shop to easily re-flash software that unlocks the max speed. No additional parts needed. Just like the Tesla, it’s already built in — but crippled. Sometimes you can even purchase the unlock from the dealer. But it’s cheaper to take it to a tuning shop.
So Tesla isn’t blazing an entirely new trail here. And software development has real costs.
Now I’m wondering how long it will be before tuning shops figure out how to unlock these Tesla features, and how much less they’ll charge.
So you’re saying all non-tech people (most people) will think they’re ripped off as I do but tech people will understand. This seems to mean Tesla will irritate the vast majority of customers and prospects…which still seems like is a bad idea to me.