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Tesla Ends Online Sales of $35,000 Model 3 (nytimes.com)

Posted by BeauHD on from the shifting-course dept.

Tesla is changing up its retail strategy yet again, this time deciding to end online sales of the long-awaited $35,000 version of its Model 3 sedan (Warning: source may be paywalled; alternative source). The move comes just over a month after the company announced that the $35,000 version was finally coming to market. The New York Times reports: In a blog post late Thursday, Tesla said customers wanting the $35,000 version of the Model 3 would have to make the purchase by phone or in person at one of its stores. The cheapest Model 3s ordered online will now include Tesla's Autopilot driver-assistance system and a longer battery range, features that increase the price to $39,500. The blog post said Tesla was making the changes to "simplify vehicle choices and to make Autopilot more affordable." Such a configuration would previously have cost $40,500, it said.

A Tesla spokesman said the change would allow the company to produce one version of the Model 3 and use software to limit the battery range and turn off features such as heated seats for customers who wanted the $35,000 model. A longer range and additional features will be switched on in the $39,500 car, known as the Standard Plus model. Previously, Tesla planned to put a smaller battery pack in the basic model and a larger one in the Standard Plus, the spokesman said. Tesla's announcement also said it would begin leasing the Model 3, but would not offer customers the option to buy the cars after their leases expired, a departure from the typical industry practice and its own policy on other models. Tesla said it aimed to upgrade Model 3s returned after a lease to allow them to drive themselves, with no human at the wheel, and be deployed in a driverless taxi fleet. The company acknowledged that the technology for driverless taxis was still in development and would need to be approved by safety regulators before such a business could begin.

12 of 147 comments (clear)

  1. I am altering the deal by OverlordQ · · Score: 3, Funny

    Pray I don't alter it any further.

    --
    Your hair look like poop, Bob! - Wanker.
  2. Software to limit functionality? by LynnwoodRooster · · Score: 5, Interesting

    So - the car still COSTS Tesla the same amount of money to make, they will just sell it to you for cheaper if you let them set a few bits in the firmware - thereby cutting their own margins. And now you have to buy in person at the stores they closed - then re-opened - so that consumers haven't a clue going on? C'mon Tesla, just come out and say it - you cannot sell a $35,000 car, and you have no intention to do so, and you're just playing games to get people to "move up" to the $40K version.

    --
    Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    1. Re:Software to limit functionality? by omnichad · · Score: 3, Insightful

      The incremental hardware cost is nothing compared to the R&D costs that they have to recoup with every sale. This is something common across the industry from Boeing to Intel. It decreases production costs overall.

    2. Re:Software to limit functionality? by Shane_Optima · · Score: 2

      Musk didn't care about the money as much as he cared about the technology getting used. New overlord, new priorities,

      Uh huh. This is the guy who was fired from Paypal (circa 2000) because he actually wanted to abandon their existing Linux infrastructure and migrate to Windows servers...

    3. Re:Software to limit functionality? by thegarbz · · Score: 3, Insightful

      So - the car still COSTS Tesla the same amount of money to make

      No. The retail price and the package is not related to the cost 1:1. You're not paying Tesla for labour and materials.
      Actually it's quite the opposite. The car will cost less to make due to less downtime / retooling for a different model which has the effect of increasing their margins. This is something that is done by most companies which offer a wide product selection where something is controllable by firmware.

    4. Re:Software to limit functionality? by LynnwoodRooster · · Score: 4, Informative

      So - the car still COSTS Tesla the same amount of money to make

      No. The retail price and the package is not related to the cost 1:1. You're not paying Tesla for labour and materials. Actually it's quite the opposite. The car will cost less to make due to less downtime / retooling for a different model which has the effect of increasing their margins. This is something that is done by most companies which offer a wide product selection where something is controllable by firmware.

      Example, please? I work in high-volume consumer electronics and I've never seen this done. It could be done - software "disable" features from a higher-end product, and sell at a lower cost. But I've never seen it done, because if you're going to sell in any appreciable volume, the costs "wasted" in production vastly outweigh the supposed savings in tooling/NRE. Especially when the major components (for a car, that would be the engines, interior, body, suspension, etc) are not affected at all.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    5. Re:Software to limit functionality? by LynnwoodRooster · · Score: 2

      Hmmm, Ford, GM, Fiat, Toyota, Honda - they all use a single production line per model. They manage entirely different powerplants and transmission combinations (not to mention even body styles, like convertibles and hard tops, and of course different interior packages), not just a battery pack with different internals (which would be akin to a gas tank with the same external dimensions and connections and mounting points, but a different internal capacity). Honda doesn't sell you a V6 and disable a pair of cylinders and call it a V4, with a software upgrade to get a full V6. Because it makes no sense.

      In fact, most things are NOT done that way. Last few times I've been to Flextronics and Compal, a single model of laptop was built on a single production line - but they would build all the different configurations of laptops on that same line (which is pretty trivial to manage with modern production management software and dynamic SOPs and binning per station).

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    6. Re:Software to limit functionality? by cheesybagel · · Score: 2

      They don't purposefully take a 3.8 GHz processor and throttle it down to 3.2 GHz so they can sell it for less money. They sell the 3.8 GHz unit as a 3.8 GHz unit. and the one that runs at 3.2 GHz reliably is sold as a 3.2 GHz processor.

      Actually Intel and other CPU vendors do this all the time. Say a vendor orders a bunch of 3.2 GHz processors. If they don't have enough low binner processors to fullfill the order they use higher binned ones and clock them lower.

      It's called artificial scarcity.

    7. Re:Software to limit functionality? by es330td · · Score: 2

      For that to be true the inflation rate would have to be almost 4.5%. If inflation was that high interest rates would be much higher, not 3%. The best measure of inflation is bond markets.

  3. And the subscription model creeps into car sales by bferrell · · Score: 2, Insightful

    Has anyone noticed that Panasonic is backing away from Tesla now too?

  4. Re:Why does their choice of ordering platform... by b0s0z0ku · · Score: 2

    So the heating coils for the heated seats are there, just disabled in software? If the software can't be hacked, sounds like something a $5 fuse, switch, and wire would fix.

  5. Re:Also more Chevy Volt than Model 3, under $35K. by michelcolman · · Score: 2

    More Volts on the road than Teslas?

    In 2018, 18306 Volts were sold vs. 139782 Model 3s
    In the first three months of 2019, 2520 Volts vs 22425 Model 3s

    Even just the Model S or Model X outsell the Volt, in number of cars sold, while being a LOT more expensive.

    https://insideevs.com/monthly-...