It is definitely a unique aspect of Tesla’s vehicle offering, but not a new one. Though the automaker is now increasing the value of the options with the introduction of its self-driving hardware last week. Tesla now offers almost $20,000 worth of options unlocked by software when buying a new vehicle.
The idea was first introduced by Tesla back in 2012 when it saw little demand for its version of the Model S with a 40 kWh battery pack. Tesla built the vehicles with 60 kWh battery packs to streamline its battery manufacturing by only making 60 kWh and 85 kWh packs.
It offered the option to unlock the remaining 20 kWh of capacity to the few Model S 40 owners through a software update for a premium. Most ended up doing it and that’s why you will not see many Model S 40s on the road today. The Supercharger access was also software-locked with the Model S 40 and 60 and Tesla was offering it as an OTA upgrade.
Tesla quickly discontinued the 40 kWh option altogether and that was it for the after sale software-upgradable option.
Until Tesla introduced the Autopilot in October 2014 and included the necessary hardware in all vehicles with the option to activate it at the purchase for $3,000 or for a premium through an over-the-air software update later.
At one point earlier this year, Tesla started offering free month trials to Tesla owners who bought the car without activating the feature. Directly from the center screen in their car, owners were able to activate the feature and try Autopilot for a month:
After the trial, the owners could keep the feature for a premium or go back to normal.
The introduction of the Autopilot marked a resurgence of these software-upgradable options in Tesla vehicles and now Tesla seems to favor them over custom building the vehicles with different hardware. Even though the company custom builds most of its vehicles for customers, with only a small percentage of sales coming from inventory cars, Tesla prefers to include all the hardware in its vehicles and lock them with software for a possible future activation at a premium.
For something like the new self-driving hardware, the system can still perform safety features without being activated, which can still be useful, but when it comes to the battery pack, it is primarily for Tesla to streamline its manufacturing process.
The trend continued when Tesla reintroduced the Model S 60 while it is only making 75, 90, and 100 kWh battery packs. And with the significantly more expensive self-driving hardware, you can end up unlocking almost 30% of the value of your new car through software updates.
In the US, a Model S 60 now costs $66,000 barebone with no option. If you buy it like that, you could later decide to upgrade it to Model S 75 via an OTA software update and it would add approximately 39 miles of range for $9,000.
Then you could later decide to upgrade to ‘Enhanced Autopilot’, a $6,000 upgrade, and again later to ‘Full Self-Driving Capability’,a $4,000 upgrade that requires ‘Enhanced Autopilot’. That’s $19,000 in options unlocked through software updates because the necessary hardware is already in the car.
We are talking about almost 30% of the value of the vehicle unlocked with a few touches on the screen or clicks on your ‘My Tesla’ page on Tesla’s website. It’s an interesting new approach to vehicle sales.
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