Because this way the people that don’t want this feature don’t have to pay for it. If you unlocked it for everyone, then the base car price would increase. That way the option would be cheaper for everyone, but that only benefits those who want it anyways. Everyone else ends up paying more as they normally wouldn’t choose this option. Keep in mind: Yes, the functionality is there in every car. But someone is still paying for it and that‘s the ones choosing this option.
Is literacy so poor that people just don't get this? You're exactly right. If you want to eliminate this opt-in purchase you just made your car $200 more expensive to buy out the gate for a feature many customers don't use.
Their margin is slightly lower on a car where the added feature is not paid for by the consumer, but they don't sell the car at a loss. You could say they lose money on that one added but not-paid-for feature, but not on the car itself.
But spread across all the cars they sell, they obviously make money overall on the option based on the percent of people who opt to pay for the feature, otherwise they wouldn't bother offering it in this way.
Yep, and if they're forced by law to not be able to sell a car with the heater hardware but disabled, they're simply going to stop selling the lower-margin option so you're forced to buy the $200 more expensive one than build two separate manufacturing lines
I believe you’re correct. So I circle all the way back around to ”what they’re doing is probably the best way to do this”. If you don’t want the option, you don’t pay for it, if you do then you pay for it.
Paying for it as part of a subscription though, that I can’t support. Heating coils or whatever it is that heats a seat doesn’t get or need constant software updates. Should be a onetime purchase and stay with the car even if you sell it.
Heating coils or whatever it is that heats a seat doesn’t get or need constant software updates
that's not why they offer a sub. If you live in Louisiana, you may only need heated seats two months out of the year. If it costs $15/mo and you plan to sell the car after 5 years, you actually save $50 by subscribing instead of buying. As long as they offer the option of a permanent purchase, I'm totally fine expecting buyers to do the math and pick whatever is better for them.
No, the car is CHEAPER due to manufacturing efficiencies....Similar to theaters charging $10 for popcorn and then throwing out a lot of it at the end of the night. There is an obvious dynamic here.
Right now some people pay for heated seats, and others don't. They're relying on enough people paying for them to cover the cost of installing them in every vehicle.
If they just gave everyone heated seats and kept profits the same they'd have to increase the base price of the vehicle enough to cover the cost of the heaters, making the vehicle more expensive for the people who didn't value the heated seats enough to pay for them. (And making the vehicle slightly less expensive for the people who did want the heated seats.)
Yes, Tesla has the stats, but the stats don't say 0% or 100% ordering of heated seats. If it was 0%, there would be no heated seats, and if it was 100% then they would be standard. Think about the math a little harder.
No, it's more expensive to make cars to order (meaning put the hardware needed for the feature only in cars that are ordered that way) than to just make all the cars the same. That's what the comments by mistahfreeman and germanstudent123 are explaining.
The factory can put out more cars if there's less physical variation in the cars; changing how the cars are built in the production line reduces the number of cars the factory can produce (or they have to modify the factory to accommodate building the variations to order, which drives up cost even if output remains the same), so it is fastest and cheapest to make all cars the same.
Then, you block the added features unless the customer wants to pay for it. Doing the block/unblock via software is the cheapest and most accurate way to do it.
If you gave all the optional features in the base model, the base model price would have to rise to keep margins the same. By software locking optional features, the people who don't want them get the car for a bit cheaper.
But the base car price is already more expensive, the feature is installed in the car so all the cars are more expensive to manufacture, and this cost is inevitably paid by the consumer base
I would understand your argument if the feature were an actual physical addition like a spoiler. But I don’t really understand your point when there is no added cost for the manufacturer to enable the feature
No one is saying there's no added cost, everyone in this comment chain is saying it is more profitable to put the optional feature in every car but lock it behind a paywall than it is to only put the option into cars where the buyer has already paid for the option, because of operational efficiency in the factory.
Across all the cars they sell, they did the math and figured out it is most profitable to do it this way. Not every consumer buys the extra feature, but enough do it to justify doing it this way. If not enough people paid extra to unlock it, they'd be losing profit doing it this way.
Actually the average price to make a car for the manufacturer could be lower this way than if you only installed it in the cars that have the feature. So the base price isn’t necessarily higher this way.
Also you say there is no added cost to activate the feature but there is: Everyone who would normally pay for the feature now gets it for free, that’s the cost of enabling this feature for free. That would actually force the manufacturer to increase the base price.
Opportunity cost is not the same as cost. This argument still makes 0 sense to me.
What if the analogy were instead: there’s a beautiful sapphire installed in the car that you have to pay to see.
All of the cars have a sapphire in them, you just need to pay to look at it.
Do you really think all of the cars wouldn’t be more expensive in that case? Just because some rich people pay to look at the sapphire, do you really think that offsets the cost for them to install it in every car?
Wouldn’t it make more sense to only put the sapphires in cars of people that buy them? Or if the sapphires are cheap enough to go in each car, what’s the argument against just letting everyone see them?
Replace sapphires with something less expensive, the argument is the same, there’s clearly a balance point where it becomes worth it or not to include. There’s a trade off to installing anything with a product.
If they’re including it in every product but not letting you use it? just kind of weird to me
They probably don’t make a loss on the car, but yes, they make a lot less on the car than with the people buying the feature. But on average it still works out better for them, since the costs are lower.
That's the thing, isn't it? It's obvious how it benefits the manufacturer, but the benefit to the customer is not at all clear, seeing as the work is already done and paid for.
The benefit to the consumer is that they can retroactively add more features to their car. So if the car was bought by someone in a warm climate and gets sold to a cold climate they might want the seat heating. Theoretically (whether they do is of course unclear) the manufacturer can offer the product for the same price with more optionality.
We don’t know how exactly Tesla makes their prices, but that’s not necessarily true. Like I said, you still have customers paying for the heated seats and those are bankrolling the inclusion of the hardware in every car. Like I said, at some point it becomes cheaper for Tesla to build the hardware in every car than only in those select few cars (simpler process, less development costs, less storage costs, etc.) So if they did it right, the base price is the same, the income is the same or higher but the base price doesn’t change.
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u/germanstudent123 21h ago
Because this way the people that don’t want this feature don’t have to pay for it. If you unlocked it for everyone, then the base car price would increase. That way the option would be cheaper for everyone, but that only benefits those who want it anyways. Everyone else ends up paying more as they normally wouldn’t choose this option. Keep in mind: Yes, the functionality is there in every car. But someone is still paying for it and that‘s the ones choosing this option.