not a Tesla owner here, so can't explore how good is the old auto pilot, but I think that paying to have a better experience and unlock some new features is fine.
Tesla is approaching new business models, like subscription and a modular take, making cars upgradables. Let's see how these perform.
That's not really the issue here. Tesla has advertised that all the cars they sell have the hardware required for FSD. Now that they are offering a subscription to FSD, they are telling drivers on older hardware to pay $1500 to upgrade to get the hardware to support FSD, even though they told those drivers earlier that their existing hardware would be enough.
What Tesla promised in 2016 was that "as of today, all Tesla vehicles produced in our factory – including Model 3 – will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver":
It’s honestly hard to believe that anyone thought it was true at the time. Until full self-driving capability is achieved how could anyone possibly know what hardware is required for it?
Its called marketing, companies exaggerate claim all the time. As consumer, one should not believe in company marketing claim/promise or they'll be in trouble.
I don't see how that is relevant though. Tesla promised every car would have the required hardware for FSD, regardless of whether you paid for FSD upfront or not. The fact that you have to upgrade in order to subscribe to FSD shows that they were wrong about that. They should honor their commitment by upgrading everyone to hardware that is capable of FSD, since that's what they were promised at purchase time.
autopilot drives like a teenager who just got their license. It makes extremely rookie mistakes and often behaves in unpredictable ways, which is extremely unsafe. It loves to hang out in blind spots and cannot anticipate the most obvious intentions of other drivers.
I really like traffic aware cruise control as one of the best adaptive cruise controls out there, but autopilot is a mess and I don't use it.
I haven't tried the full self driving beta since I wasn't about to give Tesla ten grand so the car can change its own lanes, but I can't imagine it's any better.
it changes lanes well and performs well on the highway in most conditions. i sometimes find it safer in heavy rain than my own driving.
that being said its not safe to use without paying attention in bad traffic or erratic city driving. the problem is it doesnt drive as defensivable as a good human which is required in cities with aggressive drivers.
Depending on conditions, and if there are no Botts’ Dots, lane markers can be pretty tough to see in a heavy rain. Computer vision with many eyes may one day beat us here.
A more charitable view is that an attentive driver with FSD is safer than a driver alone. After all, the F in FSD does not really stand for "fully autonomous", right?
> I haven't tried the full self driving beta since I wasn't about to give Tesla ten grand so the car can change its own lanes, but I can't imagine it's any better.
So you admit you know nothing about the FSD beta (you think you will enter it by buying FSD) and then say you can't imagine it's any better? Please look for yourself. It's all over YouTube and comparing Autopilot to the FSD Beta is like comparing apples to oranges.
The article suggests Tesla "forgot" about the promise due to high turnover. I find that hard to believe. I think they decided towards a "let's see what happens". Enough turmoil and they will pay up. Not that hard, just add a minimum subscription term to cover installation cost.
Weak American regulation leads to an epidemic of bad businesses making “it’s cheaper to beg for forgiveness” moves.
If you can’t or aren’t willing to make an example of a company on regular occasion, the rest will just factor the weak penalties into the cost of doing business.
There probably will be a huge class-action that settles in 10 years. The amount it settles for probably won't even cover a 10th of the fraudulent sales.
This is a potential dispute between the buyers of luxury cars and their maker. Not sure why tax dollars need to be spent intervening. (Would also note that it’s said “weak” regulation that permitted Tesla to launch and scale in the first place.)
I get the argument. I’m not saying we legalise fraud. But if we’re spending the earnings of the average American, who barely earn enough in a whole year after tax to buy one, I would want to be damn sure there isn’t anything applicable to them being de-prioritised. (Hint: there is.)
If you’re buying an upgrade on a luxury car, you can afford a lawyer or find someone in a similar situation who can.
You can call a class action lawyer who will work on contingency and get part of the settlement and extra paymentnfor your effort as a class representative.
This is where the “free market will handle it!” completely fails as an argument.
Lawsuits are RIDICULOUSLY EXPENSIVE and are effectively inaccessible for almost all Americans. The civil and criminal legal systems are unbelievably tilted in favour of the wealthy.
Well you are assuming a suit will even be possible. Let's not forget most force you to waive your right to a lawsuit, even a class action one, in favor of mediation. Where they choose the Mediator, the location, and the date/time.
Is the judiciary not funded by tax dollars? By your logic, Why should the judiciary get involved between two independent parties, when they could arbitrate among themselves?
> Not sure why tax dollars need to be spent intervening
In Germany, we call - and punish! - things such as this as "unlauterer Wettbewerb" (roughly: Unfair business practices).
The reason why the German government spends tax dollars on cracking down on companies making false or misleading promises to consumers is to protect people from being exploited thousands of dollars or more, and to protect businesses who play by the rules from the beginning and so suffer from less sales.
In short: You need to spend tax dollars to have a sphere of good behavior for the common good.
The lawsuit system of regulation isn’t inherently weak. The issue is that the details of the class action rules permit mass tortfeaers to buy global peace from lawyers effectively acting on their own behalf rather than truly having the class’ interests be primary.
Given that Tesla already allows purchasers of FSD to upgrade their hardware for free, they are clearly aware that they promised every car would have the required hardware for FSD, and are honoring that for FSD purchasers. So I don't see why they shouldn't do the same for subscribers.
Also HW3 is pretty clearly not enough for FSD, so even if you pay for this upgrade you are probably going to need another one to get the level 5 FSD everyone was promised.
Which one? It's well known that Tesla upgrades your car to the latest hardware if you pay for FSD. And based on the latest FSD beta videos, there is a long way to go before Tesla is able to get a stable enough picture of the environment for level 5 driving. They are already running out of processing power with the current MCU even with the current pretty basic implementation.
Also I don't see how level 5 is possible if your cameras can be blinded by the sun or obstructed by road spray.
This was discussed a while back on HN, when Tesla was discussing their new AI hardware in development - it made no sense for the old/existing hardware in cars to be "Full Self-Driving" capable but where still developing new hardware unless "Full Self driving" wasn't quite as Full as the new version could provide.
Just watching videos of the "summon" feature on Youtube makes it obvious how far away they are from self driving. In one video, the operator has his cousin "walk in front of the car" to see what will happen, and it doesn't stop. No thank you.
Also, I spoke with a Tesla sales guy, and he said, "don't pay for something that doesn't exist", which seems super obvious when you think about it objectively and step away from the hype.
Maybe. But if Tesla had fully-working self-driving cars (you know, what people would expect from a feature called Full Self Driving) they’d probably use it to safely, autonomously drive the car to the summoner.
> pay $1500 for something you've already paid for, and which we may not even be able to deliver
Some Tesla customers have paid $10,000 for that. I think they should demand their money back and only purchase it if and when "full self-driving" actually exists.
$10K is the current price. Early last year it was $7K. The price used to be around $2K. Regardless of the price, Tesla is selling a product that it may never deliver.
> Tesla is nowhere near having full self driving software.
I think they do have a 'Fools Self Driving' system though.
Either way, the customers are still paying for a package that not only they already paid for it, but it does not work as advertised. And Tesla continues with the lies and U-turns.
>As part of this change in hardware, Tesla said that all owners with the old hardware could upgrade to the new hardware for free, provided they had paid for Full Self-Driving. Tesla has a blog describing the process for upgrading your computer to FSD Computer/Hardware 3.0.
>This was all fine and dandy – owners who would make use of the FSD Computer got a hardware upgrade along with their purchase of the software, and owners without Full Self-Driving weren’t missing out on anything since they didn’t have the software anyway.
>But now the much-awaited subscription scheme offers a lower barrier to entry. Tesla owners with cars from late 2016-mid 2019 might want to try out the software and see what it can do, especially since it has improved since they purchased their car. Maybe they don’t know if they’ll like it enough to want to spend $10,000, maybe they don’t think they’ll have the car long enough for it to be worthwhile, any number of reasons.
Article is poorly written, but it sounds like this only affects people who didn’t pay for FSD, and now want it. So the title is exactly wrong.
> Article is poorly written, but it sounds like this only affects people who didn’t pay for FSD, and now want it. So the title is exactly wrong.
The title is correct in that these owners paid for hardware they were told was sufficient for FSD. Now they are being told that isn't the case and they have to pay more for /more hardware/.
No one is disputing having to pay for the software upgrade, but requiring a hardware upgrade makes it pretty clear the previous hardware was not as capable as it was advertised to be.
But they could pay for the software upgrade and get the hardware for free, it sounds like. They only have to pay for the hardware if they want the cheaper monthly FSD.
What’s happening here is that Tesla doesn’t want to give you a $1500 “chip” for $200. People who buy the 10k package still get the upgrade for free. People who just subscribe for a month don't. I don’t really see a way around this. If you want FSD then you pay for it. If you don’t want to pay 10k to have it for life then pay 1500 plus 200/mo. That’s essentially the terms being offered here.
Right, Tesla could have the same economic effect by requiring a minimum 2 year contract for the monthly FSD with "free" FSD chip upgrade - I suspect that wouldn't make people feel any better about the situation
As I understand it, these are people who already paid for FSD. The same FSD that Tesla claimed was ready to go except for regulatory hurdles. Tesla should give these people what they paid for, or refund that money (with interest) if they're not actually able to live up to their end of the bargain.
No that's not correct. These are people that didn't buy FSD, still have the old hardware and now decide to subscribe to FSD monthly. The chip costs are factored in when buying the 10k package. But now in Tesla's worst case, someone subscribes, gets the chip for free and then instantly cancels. An easy solution for Tesla should be a "upgrade your hardware and get x months for free situation" for a higher price or a contract for a specific number of months that you sign up for after the upgrade.
Tesla has claimed that the cars they sold had the hardware necessary for self driving. Now that a new chip is required they are tacitly admitting that they made a false claim in advertising their cars. They either need to provide the upgrade for free or compensate buyers.
From the link's screenshot of Tesla's 10/19/2016 post:
> We are excited to announce that, as of today, all Tesla vehicles produced in our factory -- including Model 3 -- will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver.
> this is no different from deprecating an early alpha/beta version
If you sell the alpha with the promise of it supporting the full game, and then charge again when you release the beta no less, I could understand being upset.
That people thought this company, unique amongst every other manufacturer wouldn't do planned obselesence is part of the massive marketing success of the company.
Naturally the title is leading you one way and the reality is another. This would impact me because if I want this I would have to pay $1500 to use the subscription service instead of $5000 for FSD which nets me the computer upgrade too. The policy makes sense, I get that they have always said their cars are all capable of full self driving, yet even with the Model 3 they are requiring hardware upgrades before you can use FSD
I agree, It's one of the things where I feel I hate the opinion, but it is what it is.
If the promise boils down to the blog announcement on their blog, the line is 'all Tesla vehicles produced in our factory – including Model 3 – will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver.'
IMO (not a lawyer), it feels like they didn't tell you it would be the latest, greatest, continually supported in perpetuity, never changing hardware. They told you it had hardware that could support a full self-driving system that is safer than a human. Hardware that they do not support now.
I haven't interacted with any Tesla sales folks, but I feel like if you asked about a commitment like this, even before this subscription service, no one is going to commit to that.
They made it clear it's up to you to purchase the self-driving software, and that is where all the magic is.
And to boot, the available agreement when people purchased the car is still on the table; if you give them $10k, they will give you hardware.
If you want the subscription, you need to have/acquire the supported hardware.
If they had a contract like a phone (which dislike that business model) where you commit to X months, I could see it. But I too wouldn't want to be handing these out to have people cancel after a month.
> They told you it had hardware that could support a full self-driving system that is safer than a human.
And this turned out to not be true, because if it were, they would have released FSD on this hardware.
Just imagine if Microsoft sold you PC hardware that they claimed would support windows 11 back in 2016, but now require a processor upgrade to support it. This is exactly the same situation.
Except there is no 3rd party license to make software for Tesla. To make your metaphor apt, it would have to be “Selling you an Xbox that they claim can play Witcher 3 but then requiring you to buy Xbox 360 to play it.”
But Tesla never intends to support any Full Self Driving on older generation cars. Full Self Driving was sold at the time as being able to "summon your car to you when you are in LA and the car is in NYC."
They probably won't get there with any hardware package in the next 10 years. But this is a present admission that older generation cars are not currently capable of what Tesla considers FSD without a hardware upgrade.
So that part where I think it's really bad, and the fact that they use Full Self-Driving and FSD as basically a brand name is borderline irresponsible. But to me they are pretty consistent in their language, and any talk of autonomous driving I've seen comes from Musk, and is a projection that probably has a significant safe harbor.
They continually seem to draw a very prominent line between "Full Self-Driving" and "Autonomous", where what Tesla defines as autonomous is the much higher standard (i.e summon your car from one coast to the other).
I would in that light, argue that Tesla's hurdle for saying a given car is FSD capable is really low, because imo, it seems like they are comfortable saying Level 2 is like, Full Self-Driving (Beta).
I can't see any definition of "full" or "self-driving" that do not require autonomy. This is similar to the case where wireless networks tried to redefine the term "unlimited data" to mean "really a lot of data." The courts ruled against them when they throttled data above a cap that they considered very high usage.
There’s a confusion in terms here that is worth clearing up.
To have FSD requires the purchase of two products: the hardware and the software.
Cars purchased from 2016 onwards were claimed to already have the hardware. It is possible to purchase the car with the hardware for FSD only, and not the software. People in this situation were told that they already had the hardware for FSD. Now Tesla is saying that they don’t.
As the owner of two Teslas, as an investor, as a True Believer I have to say that Tesla fucked up here and need to be sued to make it right if they don’t fix this. Not with a “subscribe for two years and get it free.” They should just get the chip installed for free.
I only own one Tesla so I guess I don't win in that department.
Anyway, this was all before the subscription package. Things are not the same as they were in 2016 with the introduction of the 200/mo subscription. By saying "your cars have the hardware to do FSD" it means they're fitted with all the required accessories. If Tesla needs to give them a more powerful computer as a complementary upgrade once they purchase FSD, so be it. It doesn't make sense for Tesla to just ship out a bunch of the more powerful chips to people who never intend on using FSD. And like we've already covered, if you purchase FSD in full, the chip is entirely free.
I guess it comes down to whether you'd rather have a subscription or not. Either FSD remains only accessible in a "bulk purchase attached to the car" capacity, or Telsa figures out how to work the economics of adding in a subscription model. I tend to think this subscription model opens up FSD to more people than not having it, so I think it's a net positive.
>Things are not the same as they were in 2016 with the introduction of the 200/mo subscription.
This does not change the fundamental fact that Tesla promised something and then did not deliver it. That is, they promised that the hardware shipping with the vehicles 2016 onward were FSD capable. They are not. Remember —- they took investor cash after this announcement. That matters.
> It doesn't make sense for Tesla to just ship out a bunch of the more powerful chips to people who never intend on using FSD.
By this you mean: “It isn’t in Tesla’s best immediate financial interest.” But we have laws and norms in place in the US to counter balance the interest of corporations vs that of customers. Two of those laws and norms is not lying to your customers and making them whole whole whenever you make a mistake.
As well, cars go through several owners. People purchased Teslas after the announcement with the value calculation that it was FSD capable. Tesla essentially robbed those customers of $1500 of resale value. That is, the customers expected to buy a car they could resell as FSD capable. Now they can’t.
Would it be better optics if they just amortized the cost of those old HW upgrades into the recurring monthly price or if they had a minimum 6 mo commitment for the subscription FSD?
Amortizing the cost would be better, without telling the user. Just charge everyone the same and factor in the cost of the free upgrade to the users with HW2.5. It’s not like this isn’t how it’s done elsewhere. High margin buyers subsidize low margin buyers all the time.
Perhaps this is true. I suspect there's a strong preference to convert low margin buyers to high margin buyers, though. And as a high margin buyer it doesn't sit well with me knowing Tesla is subsidizing free HW upgrades out of my purchase price so it just feels like moving the problem around not actually solving it. That was my point, really. The money has to come from somewhere it seems Tesla wasn't as tactical as they could have been when considering the optics here. And the good thing is it's not hard to change and they have demonstrated history of correcting for price fluctuations in FSD costs, so there's fair hope they'll address any perceived gaps. Personally I think a 6 mo minimum subscription term or a "you get 6 months free with purchase of the hardware" promotion would be a great middle ground that lets purchasers attach long enough to fund the upgrade naturally.
I don’t mean to be blunt, so please don’t take offense when I say this in response:
>And as a high margin buyer it doesn't sit well with me knowing Tesla is subsidizing free HW upgrades out of my purchase price so it just feels like moving the problem around not actually solving it.
You shouldn’t buy high margin products if you care what the company does with the high margin. The same goes for Apple products. Apple’s high margin goes to pay devs and for decades long R+D products, many of them will fail. It also goes to pay settlements when they fuck up. Them’s the breaks.
Yes, generally I don't care and I understand that how a company chooses to spend its money is not my concern. My point is essentially that it's not particularly your concern either.
The only reason the topic came up is because you lead with "low margin buyers are subsidized all the time so they should also be subsidized by high margin buyers in this case". While a company may choose to do that, and I really don't care if they do, in the context of an external discussion about which strategy is better, I do care to respond to that point when presented as part of an argument by an equally outside party.
This is how the specific point comes off to me:
Alice: I'm annoyed Tesla's new subscription requires a $1500 upgrade for my older model, Tesla said it was FSD capable. Make me whole.
Bob: I already paid in full for my FSD subscription and got the hardware included, why should you get it for free?
Alice: Because Tesla could use revenue from people who have already purchased FSD in full to fund my hardware upgrade.
Bob: Sure, they could. But now my "investment" in FSD doesn't go as far as I thought it would and I'm "out" $1500. Make me whole.
...
Anyway that's just why I think some sort of compromise makes tons of sense so that nobody perceives themselves as being out anything and people who want to use the subscription can get the HW for "free" rather than the up front $1500. You've changed my mind on that front (:
At first this looks rather shady, but upon closer look may technically not be. If I've understood the timeline right:
1. From 2016-2019, Tesla said that FSD would someday be available via a $10k software update, and that all their cars came with all the hardware that would be required to use that update.
2. In mid-2019, Tesla started installing more powerful hardware on their new cars.
3. They have now started offering FSD as a subscription service. They do not offer the one-time $10k FSD product.
4. The FSD they are offering via that subscription service requires the new hardware. Tesla owners with the old hardware who want to use the subscription service will have to pay $1500 to upgrade the old hardware.
It comes down to whether or not the subscription FSD counts as the FSD from #1, or if it counts as a different FSD product with different requirements.
Legally, I'm sure they are in the clear because the subscription product is in no way even remotely FSD and so they can claim that #1 is referring to some future real FSD.
They also promised with the original FSD upgrade that they would update your hardware if they needed to in order to provide full FSD later. So the idea they hid the fact a hardware upgrade may be needed is silly.
It's a bit of a nonsense for a few reasons - first the idea that this requires new hardware but actual FSD wouldn't. Secondly that this isn't FSD but the subscription is literally called FSD capability subscription.
It's also worth remembering that FSD stands for Full self driving, not "kind of some extra driver assist that still requires the driver's attention and intervention and doesn't work at all under a load of conditions".
I'd agree with you if they were more savvy or specific with their marketing (ie: FSD v1 or FSD V2) but sorry, they call it all "Full self driving" - whether that's via subscription or not, it's one in the same.
So all you're saying is there's a difference between full self driving on old hardware versus full self driving on new hardware?
The article is totally misleading. Musk promised several times that who bought FSD , they’ll have free update. Package include both software and hardware. And that’s still the case
The subscription didn’t exist in 2016. If you buy full time FSD pack , hardware will be still free. Makes total scene. And I don’t understand people crying here about vapor ware, not real FSD etc … it’s optional. I personally bought it and I’m happy.
IDk anything about promises vs this but... the key point for me, here, is subscriptions.
Both software & subscription based business models have proved way better than just selling stuff. Tesla's business is increasingly proving that its in these businesses. If Tesla can normalize >$200 software subscriptions, this changes the game.
For example, there is an interesting & contested economic question about planned obsolescence in cars. Once a long lived product reaches maturity/saturation, demand plateaus or depletes. Refrigerators, for example, are a different industry once most houses have one TVs too. Some theories of the great depression, for example, have market saturation as a primary culprit.
In the 30s, planned obsolescence was transparently promoted as a depression ending plan^. Orwell, writing 1984 after the war, predicted continuous low level warfare, a means of destruction to counterbalance production. It was widely thought that saturation points were the weakness in modern industrial economics.
In any case, Henry Ford's engineering ideal of simple, built-to-last cars lost out to GM's annual design changes... demand based in fashion & trivial novelty, rather than utility.
Today, Japan absolutely enforces obsolescence for cars. EU countries, often via environmental taxes also push old cars off the road to encourage new ones. Many cars are built to last 100kms/10yrs. Between insurance, tax, biannual roadworthiness tax and such, the most economical way to own a car is a cheap, new one.
Anyway... contrived obsolescence is just the most on-the-nose way of keeping the ball rolling. One of many. There are also new markets. There's fashion, like it or not. There's technological improvements, at least during some periods. Any can work.
In any case... subscription and software business models could change some real imperatives in the auto industry. Building cars to last is possible, manufacturers just haven't had the incentives to. If the number of Teslas on the road becomes a multiplier for a meaningful revenue source... the incentive to build long term becomes significant. Turns a linear trajectory to a saturation point into an exponential.
To the extent that this succeeds, the auto industry is going to be all about the fleet, rather than the factory door, soon. As always, affordability will not be the endpoint.
The reason for doing this is, of course, a different one.
Tesla, much as any other recent company, has opened their post-90's Economics textbooks and has seen that two-part contracts allow to extract much more welfare (money) from the customers. The car industry already got wise early on about price discrimination by employing bundling. Now this is combined with subscriptions to create IC/IR two-part contract menu.
Add customer data, and you're golden.
Edit: Just to be clear, this may be efficient. It just isn't beneficial to the consumer.
Agreed on the "post-90's economics" and "data is the new oil."
In fact, a lot of Tesla's current market cap is tied to customer data. It's an "unavailable at any price" ingredient of their (prospective) self driving end goal. It also allows them to credibly claim that they'll eventually have a great insurance business/etc. A moat.
I was just commenting on a potential feature of this post-90s market.
In the "Model T" economy, the sweet spot was somewhere between "no one can afford your product" and "everyone already has it." Ford in the 20s. Demand. Efficiency. durable products. In the post WWII economy, the sweet spot was about optimising efficiency (modern trade deals/routes grew around auto industries' efficiency needs) and fashion-based demand. Cars as a means of self expression and such... fleet turnover rates determine market size. Disposable products.
The economy we're stepping into, revenue will come from sources other than just making & selling cars. That means we might see much longer lasting cars.
Maybe by 2031 we'll know if 1931 theories of market saturation and planned obsolescence are true.
I largely agree with your reasoning, but I emphasized the profit incentives as driving the decision to choose two part tariffs, because I think whatever happens next will also be driven be these concerns.
Firms will also have realized that there are indeed two parts to such pricing schemes, and that is not by accident. If the market can collude on disposable products now, it may be able to do it when everything is a fixed-/variable contract. Why? Well, it simply is profit maximizing, especially for those who have troves of customer data. Indeed, we know that it is only under uncertainty that firms may as well post a single price. Now that we can track all or customers, we surely want a combination of outright sales and variable cost subscriptions. That is, as long as people have heterogeneous preferences for things.
Instead of longer lasting cars, I simply expect cleverer and more extractive contracts to become the norm. Perhaps I am too pessimistic, perhaps what you say will come true to some degree. Perhaps we can turn Marx on his had... again. It's not profit that will continue to decline, it's consumer surplus - for many of the same ills.
I understand that American regulation is company friendly so you can essentially promise and do whatever.
However, did Tesla not also sell in other areas, like in the EU? Were those claims absent?
Because if not, the case would be seem to be easy: Tesla sells a car with self-driving capable hardware (advertised in a manner where your purchasing decisions would be influenced by that claim), has obviously not delivered and has therefore up to three attempts to fix the issue during whatever the warranty period is. If that doesn't happen, you, the customer, can simply invoice your money back.
It doesn't seem like this would turn out well for Tesla.
I mean, I have done stuff like this before - not on a scale of a car, but pretty expensive electronics. The company in question (Samsung) pretty quickly decided to play ball. It gets difficult to prove after six month if the issue is a defect. But if a thing is simply missing or doesn't work as advertised, then the chances for the company to wiggle out of it are rather slim.
Not sure that the EU & US are all that different, in this regard. The article doesn't do a very good job of explaining how/what was promised or advertised. You need to deliver what you sell everywhere.
Also, EU regulation is quite friendly to the auto-industry. There is a pretty tight coupling, for instance, between environmental tax rates and the models produced by EU manufacturers. This targets both international models and older models, increasing sales of new EU models.
One of the reasons VW's diesel scandal was so infuriating.
IMO - it sucks but as a software developer, I can say software is not free… it takes a lot of time and energy to both develop and maintain software…
As a business owner, IMO you should be free to put any price you want on anything you sell in anyway you choose to sell… people will either buy it or not and that’s the best way to figure out if it’s worth it or not…
As a tesla owner, this sucks because well the hardware is in the car… too bad there are no other cars on the market that even come close
If there is a class action attorney reading the thread, happy to join...
I LOVE my model 3. I've recommended (with verified purchases) 10+ friends who purchased. The blatant fake it till ya make it marketing isnt needed and yet Tesla continues to do it. WHY?!?
Because that’s just how Elon does marketing. He also said the Model 3 would have a dashboard that “looks like a spaceship” and instead delivered a slab. Nothing new. It just maybe wasn’t as blatant as now.
I have always wondered how adult, educated people could ever buy something like fsd packages where the hardware(the cheap part all things considered) is provided first and the software comes later, "pending regulatory approval", especially seeing as how that would apply globally.
It is like buying a laptop with nothing but the casing and the screen and AMD yet has to develop a chip, windows,Linux or iOS not developed yet.
Ok, the car is usable without it and it's indirect funding of the feature, but still.
When I bought my Tesla. The only way to get active cruise control was to get the FSD package. Since I wanted active cruise control. I didn't have a choice.
I wonder about pre-orders in general sometimes. It's a form of investment.
That said, this Tesla thing isn't a pre-order exactly, because they explicitly promised FSD capabilites, so it should at least save on a trip to the shop to install something later. Unfortunately, it wasn't FSD, but just some basic stuff, so if you want more you've got to go in and pay anyway.
The key here is "full self-driving" = FSD, which can only be interpreted to mean that the car can in fact drive itself (safely).
They already pivoted from “Autopilot” to “Full Self Driving”, I imagine they’ll “deliver” FSD and milk people for “Autonomous driving” or whatever next.
> However, Tesla was founded in 2003, 18 years ago. It’s an enormous company with over 70,000 employees, making ~$10 billion in revenue every quarter, and it’s even part of the S&P 500. It’s not a “startup” anymore. It doesn’t get to use that excuse when it does stupid stuff like this. It needs to grow up and stop lying to its customers. And we’re getting tired of having to say this.
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[ 3.5 ms ] story [ 217 ms ] threadTesla never promised a rent option. And for that there is a one time fee for some cars
https://www.tesla.com/blog/all-tesla-cars-being-produced-now...
That wasn't true, was it.
That's called false advertising.
> one should not believe in company marketing claim/promise
Or, better said, the companies leading with false claims will be in trouble as they lose the trust of consumers and may be subjected to lawsuits.
situation changed, ie., they came up with better solutions.
could they theoretically make the old hardware work? maybe not, but at one point they believed it.
that’s the way of the world.
The problem remained the same, either that was true yesterday and it still true today, or it wasn't true yesterday and it will never be true.
Keep your promises until it's inconvenient to do so ?
If they can't use the older hardware with their new software, they should upgrade the hardware for free since they promised the capability is there
the world is in constant flux. promises are more aspirational than true.
greatest lie of all is “i love you forever”
I really like traffic aware cruise control as one of the best adaptive cruise controls out there, but autopilot is a mess and I don't use it.
I haven't tried the full self driving beta since I wasn't about to give Tesla ten grand so the car can change its own lanes, but I can't imagine it's any better.
that being said its not safe to use without paying attention in bad traffic or erratic city driving. the problem is it doesnt drive as defensivable as a good human which is required in cities with aggressive drivers.
I think that says a little bit more about your driving that it does about Tesla.
So you admit you know nothing about the FSD beta (you think you will enter it by buying FSD) and then say you can't imagine it's any better? Please look for yourself. It's all over YouTube and comparing Autopilot to the FSD Beta is like comparing apples to oranges.
If you can’t or aren’t willing to make an example of a company on regular occasion, the rest will just factor the weak penalties into the cost of doing business.
This is a potential dispute between the buyers of luxury cars and their maker. Not sure why tax dollars need to be spent intervening. (Would also note that it’s said “weak” regulation that permitted Tesla to launch and scale in the first place.)
Allowing market players to deceive consumers just creates bad incentives and terrible companies.
I do not have the 10 years and 10 million dollars required to sue any of the fortune 100 for any wrong doing regardless of its severity.
So are Teslas.
I get the argument. I’m not saying we legalise fraud. But if we’re spending the earnings of the average American, who barely earn enough in a whole year after tax to buy one, I would want to be damn sure there isn’t anything applicable to them being de-prioritised. (Hint: there is.)
If you’re buying an upgrade on a luxury car, you can afford a lawyer or find someone in a similar situation who can.
Lawsuits are RIDICULOUSLY EXPENSIVE and are effectively inaccessible for almost all Americans. The civil and criminal legal systems are unbelievably tilted in favour of the wealthy.
And the argument that Tesla can only exist because they could mislead consumers thanks to weak American regulation seems pretty dubious.
Even if Tesla sold the dad package to 30% of their customers then they’ve likely doubled their margins overall.
In Germany, we call - and punish! - things such as this as "unlauterer Wettbewerb" (roughly: Unfair business practices).
The reason why the German government spends tax dollars on cracking down on companies making false or misleading promises to consumers is to protect people from being exploited thousands of dollars or more, and to protect businesses who play by the rules from the beginning and so suffer from less sales.
In short: You need to spend tax dollars to have a sphere of good behavior for the common good.
Why would you want more bureaucrats when they dont even go after the bad apples, but instead they actively protect deceptive firms and real fraud??
Also HW3 is pretty clearly not enough for FSD, so even if you pay for this upgrade you are probably going to need another one to get the level 5 FSD everyone was promised.
Also I don't see how level 5 is possible if your cameras can be blinded by the sun or obstructed by road spray.
No wonder Apple sees a promise in electric cars ;)
Based on videos I've watched, this is the understatement of the year. Tesla is nowhere near having full self driving software.
So this is more like "pay $1500 for something you've already paid for, which we may not even be able to deliver".
Also, I spoke with a Tesla sales guy, and he said, "don't pay for something that doesn't exist", which seems super obvious when you think about it objectively and step away from the hype.
https://twitter.com/elonmusk/status/1416511905515048966?s=20
Some Tesla customers have paid $10,000 for that. I think they should demand their money back and only purchase it if and when "full self-driving" actually exists.
I think they do have a 'Fools Self Driving' system though.
Either way, the customers are still paying for a package that not only they already paid for it, but it does not work as advertised. And Tesla continues with the lies and U-turns.
Literally taking them for a self-driven ride.
>This was all fine and dandy – owners who would make use of the FSD Computer got a hardware upgrade along with their purchase of the software, and owners without Full Self-Driving weren’t missing out on anything since they didn’t have the software anyway.
>But now the much-awaited subscription scheme offers a lower barrier to entry. Tesla owners with cars from late 2016-mid 2019 might want to try out the software and see what it can do, especially since it has improved since they purchased their car. Maybe they don’t know if they’ll like it enough to want to spend $10,000, maybe they don’t think they’ll have the car long enough for it to be worthwhile, any number of reasons.
Article is poorly written, but it sounds like this only affects people who didn’t pay for FSD, and now want it. So the title is exactly wrong.
The title is correct in that these owners paid for hardware they were told was sufficient for FSD. Now they are being told that isn't the case and they have to pay more for /more hardware/.
No one is disputing having to pay for the software upgrade, but requiring a hardware upgrade makes it pretty clear the previous hardware was not as capable as it was advertised to be.
Nevermind, I misunderstood:)
As I understand it, these are people who already paid for FSD. The same FSD that Tesla claimed was ready to go except for regulatory hurdles. Tesla should give these people what they paid for, or refund that money (with interest) if they're not actually able to live up to their end of the bargain.
From the link's screenshot of Tesla's 10/19/2016 post:
> We are excited to announce that, as of today, all Tesla vehicles produced in our factory -- including Model 3 -- will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver.
That's a clear marketing claim.
Not sure you can start deprecating before you deliver.
If you sell the alpha with the promise of it supporting the full game, and then charge again when you release the beta no less, I could understand being upset.
How comes the engineers didn't see that coming?
That people thought this company, unique amongst every other manufacturer wouldn't do planned obselesence is part of the massive marketing success of the company.
Incorrect.
These are people who were told they were buying the hardware that allowed FSD.
If the promise boils down to the blog announcement on their blog, the line is 'all Tesla vehicles produced in our factory – including Model 3 – will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver.'
IMO (not a lawyer), it feels like they didn't tell you it would be the latest, greatest, continually supported in perpetuity, never changing hardware. They told you it had hardware that could support a full self-driving system that is safer than a human. Hardware that they do not support now.
I haven't interacted with any Tesla sales folks, but I feel like if you asked about a commitment like this, even before this subscription service, no one is going to commit to that.
They made it clear it's up to you to purchase the self-driving software, and that is where all the magic is. And to boot, the available agreement when people purchased the car is still on the table; if you give them $10k, they will give you hardware. If you want the subscription, you need to have/acquire the supported hardware.
If they had a contract like a phone (which dislike that business model) where you commit to X months, I could see it. But I too wouldn't want to be handing these out to have people cancel after a month.
And this turned out to not be true, because if it were, they would have released FSD on this hardware.
Just imagine if Microsoft sold you PC hardware that they claimed would support windows 11 back in 2016, but now require a processor upgrade to support it. This is exactly the same situation.
the original can (theoretically) play games, but no one with a license wrote any.
They probably won't get there with any hardware package in the next 10 years. But this is a present admission that older generation cars are not currently capable of what Tesla considers FSD without a hardware upgrade.
They continually seem to draw a very prominent line between "Full Self-Driving" and "Autonomous", where what Tesla defines as autonomous is the much higher standard (i.e summon your car from one coast to the other).
I would in that light, argue that Tesla's hurdle for saying a given car is FSD capable is really low, because imo, it seems like they are comfortable saying Level 2 is like, Full Self-Driving (Beta).
To have FSD requires the purchase of two products: the hardware and the software.
Cars purchased from 2016 onwards were claimed to already have the hardware. It is possible to purchase the car with the hardware for FSD only, and not the software. People in this situation were told that they already had the hardware for FSD. Now Tesla is saying that they don’t.
As the owner of two Teslas, as an investor, as a True Believer I have to say that Tesla fucked up here and need to be sued to make it right if they don’t fix this. Not with a “subscribe for two years and get it free.” They should just get the chip installed for free.
Anyway, this was all before the subscription package. Things are not the same as they were in 2016 with the introduction of the 200/mo subscription. By saying "your cars have the hardware to do FSD" it means they're fitted with all the required accessories. If Tesla needs to give them a more powerful computer as a complementary upgrade once they purchase FSD, so be it. It doesn't make sense for Tesla to just ship out a bunch of the more powerful chips to people who never intend on using FSD. And like we've already covered, if you purchase FSD in full, the chip is entirely free.
I guess it comes down to whether you'd rather have a subscription or not. Either FSD remains only accessible in a "bulk purchase attached to the car" capacity, or Telsa figures out how to work the economics of adding in a subscription model. I tend to think this subscription model opens up FSD to more people than not having it, so I think it's a net positive.
This does not change the fundamental fact that Tesla promised something and then did not deliver it. That is, they promised that the hardware shipping with the vehicles 2016 onward were FSD capable. They are not. Remember —- they took investor cash after this announcement. That matters.
> It doesn't make sense for Tesla to just ship out a bunch of the more powerful chips to people who never intend on using FSD.
By this you mean: “It isn’t in Tesla’s best immediate financial interest.” But we have laws and norms in place in the US to counter balance the interest of corporations vs that of customers. Two of those laws and norms is not lying to your customers and making them whole whole whenever you make a mistake.
As well, cars go through several owners. People purchased Teslas after the announcement with the value calculation that it was FSD capable. Tesla essentially robbed those customers of $1500 of resale value. That is, the customers expected to buy a car they could resell as FSD capable. Now they can’t.
>And as a high margin buyer it doesn't sit well with me knowing Tesla is subsidizing free HW upgrades out of my purchase price so it just feels like moving the problem around not actually solving it.
You shouldn’t buy high margin products if you care what the company does with the high margin. The same goes for Apple products. Apple’s high margin goes to pay devs and for decades long R+D products, many of them will fail. It also goes to pay settlements when they fuck up. Them’s the breaks.
The only reason the topic came up is because you lead with "low margin buyers are subsidized all the time so they should also be subsidized by high margin buyers in this case". While a company may choose to do that, and I really don't care if they do, in the context of an external discussion about which strategy is better, I do care to respond to that point when presented as part of an argument by an equally outside party.
This is how the specific point comes off to me:
Alice: I'm annoyed Tesla's new subscription requires a $1500 upgrade for my older model, Tesla said it was FSD capable. Make me whole.
Bob: I already paid in full for my FSD subscription and got the hardware included, why should you get it for free?
Alice: Because Tesla could use revenue from people who have already purchased FSD in full to fund my hardware upgrade.
Bob: Sure, they could. But now my "investment" in FSD doesn't go as far as I thought it would and I'm "out" $1500. Make me whole.
...
Anyway that's just why I think some sort of compromise makes tons of sense so that nobody perceives themselves as being out anything and people who want to use the subscription can get the HW for "free" rather than the up front $1500. You've changed my mind on that front (:
1. From 2016-2019, Tesla said that FSD would someday be available via a $10k software update, and that all their cars came with all the hardware that would be required to use that update.
2. In mid-2019, Tesla started installing more powerful hardware on their new cars.
3. They have now started offering FSD as a subscription service. They do not offer the one-time $10k FSD product.
4. The FSD they are offering via that subscription service requires the new hardware. Tesla owners with the old hardware who want to use the subscription service will have to pay $1500 to upgrade the old hardware.
It comes down to whether or not the subscription FSD counts as the FSD from #1, or if it counts as a different FSD product with different requirements.
Legally, I'm sure they are in the clear because the subscription product is in no way even remotely FSD and so they can claim that #1 is referring to some future real FSD.
It's also worth remembering that FSD stands for Full self driving, not "kind of some extra driver assist that still requires the driver's attention and intervention and doesn't work at all under a load of conditions".
So all you're saying is there's a difference between full self driving on old hardware versus full self driving on new hardware?
Both software & subscription based business models have proved way better than just selling stuff. Tesla's business is increasingly proving that its in these businesses. If Tesla can normalize >$200 software subscriptions, this changes the game.
For example, there is an interesting & contested economic question about planned obsolescence in cars. Once a long lived product reaches maturity/saturation, demand plateaus or depletes. Refrigerators, for example, are a different industry once most houses have one TVs too. Some theories of the great depression, for example, have market saturation as a primary culprit.
In the 30s, planned obsolescence was transparently promoted as a depression ending plan^. Orwell, writing 1984 after the war, predicted continuous low level warfare, a means of destruction to counterbalance production. It was widely thought that saturation points were the weakness in modern industrial economics.
In any case, Henry Ford's engineering ideal of simple, built-to-last cars lost out to GM's annual design changes... demand based in fashion & trivial novelty, rather than utility.
Today, Japan absolutely enforces obsolescence for cars. EU countries, often via environmental taxes also push old cars off the road to encourage new ones. Many cars are built to last 100kms/10yrs. Between insurance, tax, biannual roadworthiness tax and such, the most economical way to own a car is a cheap, new one.
Anyway... contrived obsolescence is just the most on-the-nose way of keeping the ball rolling. One of many. There are also new markets. There's fashion, like it or not. There's technological improvements, at least during some periods. Any can work.
In any case... subscription and software business models could change some real imperatives in the auto industry. Building cars to last is possible, manufacturers just haven't had the incentives to. If the number of Teslas on the road becomes a multiplier for a meaningful revenue source... the incentive to build long term becomes significant. Turns a linear trajectory to a saturation point into an exponential.
To the extent that this succeeds, the auto industry is going to be all about the fleet, rather than the factory door, soon. As always, affordability will not be the endpoint.
^https://upload.wikimedia.org/wikipedia/commons/2/27/London_%...
Tesla, much as any other recent company, has opened their post-90's Economics textbooks and has seen that two-part contracts allow to extract much more welfare (money) from the customers. The car industry already got wise early on about price discrimination by employing bundling. Now this is combined with subscriptions to create IC/IR two-part contract menu.
Add customer data, and you're golden.
Edit: Just to be clear, this may be efficient. It just isn't beneficial to the consumer.
In fact, a lot of Tesla's current market cap is tied to customer data. It's an "unavailable at any price" ingredient of their (prospective) self driving end goal. It also allows them to credibly claim that they'll eventually have a great insurance business/etc. A moat.
I was just commenting on a potential feature of this post-90s market.
In the "Model T" economy, the sweet spot was somewhere between "no one can afford your product" and "everyone already has it." Ford in the 20s. Demand. Efficiency. durable products. In the post WWII economy, the sweet spot was about optimising efficiency (modern trade deals/routes grew around auto industries' efficiency needs) and fashion-based demand. Cars as a means of self expression and such... fleet turnover rates determine market size. Disposable products.
The economy we're stepping into, revenue will come from sources other than just making & selling cars. That means we might see much longer lasting cars.
Maybe by 2031 we'll know if 1931 theories of market saturation and planned obsolescence are true.
Firms will also have realized that there are indeed two parts to such pricing schemes, and that is not by accident. If the market can collude on disposable products now, it may be able to do it when everything is a fixed-/variable contract. Why? Well, it simply is profit maximizing, especially for those who have troves of customer data. Indeed, we know that it is only under uncertainty that firms may as well post a single price. Now that we can track all or customers, we surely want a combination of outright sales and variable cost subscriptions. That is, as long as people have heterogeneous preferences for things.
Instead of longer lasting cars, I simply expect cleverer and more extractive contracts to become the norm. Perhaps I am too pessimistic, perhaps what you say will come true to some degree. Perhaps we can turn Marx on his had... again. It's not profit that will continue to decline, it's consumer surplus - for many of the same ills.
However, did Tesla not also sell in other areas, like in the EU? Were those claims absent?
Because if not, the case would be seem to be easy: Tesla sells a car with self-driving capable hardware (advertised in a manner where your purchasing decisions would be influenced by that claim), has obviously not delivered and has therefore up to three attempts to fix the issue during whatever the warranty period is. If that doesn't happen, you, the customer, can simply invoice your money back. It doesn't seem like this would turn out well for Tesla.
I mean, I have done stuff like this before - not on a scale of a car, but pretty expensive electronics. The company in question (Samsung) pretty quickly decided to play ball. It gets difficult to prove after six month if the issue is a defect. But if a thing is simply missing or doesn't work as advertised, then the chances for the company to wiggle out of it are rather slim.
Also, EU regulation is quite friendly to the auto-industry. There is a pretty tight coupling, for instance, between environmental tax rates and the models produced by EU manufacturers. This targets both international models and older models, increasing sales of new EU models.
One of the reasons VW's diesel scandal was so infuriating.
This is something that we all have to get used to.
On a smaller scale, Spectum in NYC has 1 internet router where the WiFi functions can be disabled for a $5 discount on the monthly bill.
As a business owner, IMO you should be free to put any price you want on anything you sell in anyway you choose to sell… people will either buy it or not and that’s the best way to figure out if it’s worth it or not…
As a tesla owner, this sucks because well the hardware is in the car… too bad there are no other cars on the market that even come close
If there is a class action attorney reading the thread, happy to join...
I LOVE my model 3. I've recommended (with verified purchases) 10+ friends who purchased. The blatant fake it till ya make it marketing isnt needed and yet Tesla continues to do it. WHY?!?
Ok, the car is usable without it and it's indirect funding of the feature, but still.
That said, this Tesla thing isn't a pre-order exactly, because they explicitly promised FSD capabilites, so it should at least save on a trip to the shop to install something later. Unfortunately, it wasn't FSD, but just some basic stuff, so if you want more you've got to go in and pay anyway.
The key here is "full self-driving" = FSD, which can only be interpreted to mean that the car can in fact drive itself (safely).