Tesla jumps on subscription bandwagon

Investment Analysis Clubs Macro Economic Trends and Risks
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“JCs” say: “customers have more money, we want it”

Tesla to Begin Charging Subsription for Connectivity Services

Tesla’s cutoff date for a lifetime of free connectivity was July 20th of this year. Customers will now have eight years to enjoy the service (which includes navigation) and then opt into a monthly or annual subscription fee.

https://www.thetruthaboutcars.com/cars/tesla-to-begin-chargi…

I have relayed before, my experience with Norton AV and Quicken “subscription” fees, that either continuously escalate, or the period the subscription fee covers is shortened. It’s a safe bet that, whatever monthly or annual subscription fee is imposed now, the cost will be much greater a few years from now.

Steve

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This is one of several reasons a friend bought a Mach-E instead – Apple CarPlay support, which Tesla refuses. He can get all his navigation and entertainment from his iPhone now. Honestly, with the proliferation of iPhone and Android, and as good as their stuff is, why would anyone want the crap the car manufacturers put out? And pay for it to boot!

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why would anyone want the crap the car manufacturers put out? And pay for it to boot!

Automakers aren’t only trying to add recurring charges to the capabilities a cell phone has. They are putting hardware features in the cars behind a paywall. A few weeks ago, BMW published the price list for a variety of features already built into it’s cars, like seat heaters.

BMW wants customers to pay a subscription fee to use features the car already has installed, like a heated steering wheel or adaptive cruise control

https://www.businessinsider.com/bmw-subscription-model-for-f…

This is possible because most of the features of a car are now controlled by a single computer. Tell the computer, via a wireless update feature, to turn a feature already installed in the car that you paid for off, and you can’t use it. Several years ago, a demonstration was done showing how the HVAC, radio, wipers, brakes, and more, in a Jeep Cherokee can be manipulated via a wireless link. The next shoe to drop will be companies going back and telling customers who bought their cars several years ago, that, to use the feature they paid for, they now have to pay more. When I signed up for cable TV many years ago, I signed up for a package that included HBO and Starz. Several years later, Comcast took HBO and Starz away. They didn’t reduce the price of my subscription one penny, just reduced the service I received for what I paid. It is certainly within the realm of possibility that you jump in your 3 year old car, try to engage the cruise control, and get a message on the screen that your “free trial” has ended and you now need to pay extra to use the feature.

Steve

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Automakers aren’t only trying to add recurring charges to the capabilities a cell phone has. They are putting hardware features in the cars behind a paywall. A few weeks ago, BMW published the price list for a variety of features already built into it’s cars, like seat heaters.

You missed the point of the previous poster. It was in response to your post where you say “including navigation”. His point is that navigation is included on his cell phone. There is no need to use the car navigation. I use Google Maps and Waze on the display in my vehicle through my cell phone. I have not need for the vehicle’s navigation.

PSU

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Several years ago, a demonstration was done showing how the HVAC, radio, wipers, brakes, and more, in a Jeep Cherokee can be manipulated via a wireless link.

I feel confident that the government will never allow safety features such as wipers, brakes and even HVAC to become part of a subscription service.

PSU

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It was in response to your post where you say “including navigation”. His point is that navigation is included on his cell phone.

I didn’t miss that point. My point is there are far more functions in a car than a navi, that are being put into the subscription model.

Steve

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This is possible because most of the features of a car are now controlled by a single computer. Tell the computer, via a wireless update feature, to turn a feature already installed in the car that you paid for off, and you can’t use it. Several years ago, a demonstration was done showing how the HVAC, radio, wipers, brakes, and more, in a Jeep Cherokee can be manipulated via a wireless link. The next shoe to drop will be companies going back and telling customers who bought their cars several years ago, that, to use the feature they paid for, they now have to pay more. When I signed up for cable TV many years ago, I signed up for a package that included HBO and Starz. Several years later, Comcast took HBO and Starz away. They didn’t reduce the price of my subscription one penny, just reduced the service I received for what I paid. It is certainly within the realm of possibility that you jump in your 3 year old car, try to engage the cruise control, and get a message on the screen that your “free trial” has ended and you now need to pay extra to use the feature.

If this problem becomes too bad, methinks the free market might solve it by some enterprising tech folks finding a way to simply hack or otherwise turn off such updates. The electronics for a heated/cooled seat, for example, seem like something that could be circumvented if the alternative is an annual subscription fee of $100+.

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“Your lease is over in 30 days. To start this vehicle, please first press I ACKNOWLEDGE on your touch screen”
—-
“Your lease is over in 29 days. To start this…”
—-
——
—-
“YOUR LEASE EXPIRES IN 01 DAYS. YOUR WILL NO LONGER BE ABLE TO ACCESS YOUR VEHICLE. IT WILL NOT START, YOUR DEPOSIT WILL BE FORFEITED, AND THE VEHICLE MAY BE TOWED AT ANY TIME. ANY PERSONAL ITEMS WILL BE DISCARDED.”

-sutton
plans on his 1995 Toyota indefinitely

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That would be the day to make sure your insurance expires in 01 days, drive the vehicle to the sketchiest area in town, leave it unlocked, and drive away in a vehicle you own.

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All cars are increasingly run by software. The software is updated by services provided by vendors.

Software as a service is a subscription model driven by metrics such as “net $ based expansion rate”. Car companies can now start improving their financials and therefore their stock prices by keeping their NBER above 100 or optimally 110%. By charging more every year for software updates to the same components they built in the car, and “offering” new options for all kinds of performance improvements that you can opt-in for, or discontinuing updates to things that don’t make sense to update anymore but keeping the overall price the same. Like Cable.

Just like planned obsolescence, Car SaaS is inevitable because it keeps their profit margins up.

Corporatocracy, babee!

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What a coinkidink. This was in my news feed this evening:

BMW owners are figuring out how to pirate their heated seats
https://www.pcgamer.com/bmw-owners-are-figuring-out-how-to-p…

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Realistically, Tesla has to pay for a cell connection for each car they support for as long as the owner keeps it in service. Somehow, they have to account for this as a liability on the books.
I don’t know how they do this now. The data volume, potentially, is much bigger than for other cars…by design. It isn’t just navigation, but also voice command translation, audio streaming (music, podcasts, radio stations, etc.) and even movie streaming (i.e. when not driving and perhaps while waiting at a charger). There is also a (limited) web browser.

Oh, and the frequent OTA software updates that provide SW fixes and new features…FOR FREE.

And of course emergency response in a crash where data is immediately uploaded…but this likely ends the accounting for that car.

I doubt the navigation part is a big portion of the data. But the Nav in a Tesla is more useful, in a few ways than on a phone. It provides Supercharger status info not available elsewhere. It also provides the “secret” key code needed to access locked restrooms at Supercharger locations.

Mike

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The hilarious things about most of these postings are:

  1. they’re by people who don’t drive Teslas and have no idea what the software does
  2. they have no idea what functions will be provided by default and what will be in the subscription
  3. they all seem to have adversarial relationships with the companies that sold them their cars
  4. they have some bizarre notion that several years from now things will be just the same

My experience with Teslas is that if you don’t trust the software you would be crazy to get in one. The car can easily kill you and others around you if the software is evil. But, of course, it has turned out to be eminently trustworthy, is involved in far fewer crashes per mile driven than non-Teslas, and the company has been remarkably good about not nickel and diming its customers. Operating costs have been very low.

I have little doubt that as things go toward subscription, that no subscription will be needed to operate the car safely and effectively, whatever that means at the time. What the subscription will be for is extra conveniences, which many will choose to forego.

This is the current situation:
https://www.tesla.com/support/connectivity

That page has various answers, such as:
What are the connectivity features that may be limited after Standard Connectivity expires?
Without Standard Connectivity, access to some connectivity features, including those that use cellular data or third-party licenses, may be changed or removed. These Standard Connectivity features that may change currently include maps, navigation, voice commands and more.

Take a look at that page for details on how things work now and what they say about the future. Please don’t just make stuff up.

In any case, your experience that your car has jerks for dealers, and the cars break all the time, and the service is awful, and the software is terrible just doesn’t apply to Teslas. If you drive one regularly, sure you’ll find something that isn’t as good as it might be. But regular software updates mean that things keep getting better. And it is truly, truly painful to go back to driving an ICE car – they are remarkably primitive, in addition to smelling bad and requiring trips to a gas station.

And if you don’t have experience driving a Tesla regularly, then your opinion about what it’s like isn’t worth very much.

-IGU-
been driving Teslas since September, 2014

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and the company has been remarkably good about not nickel and diming its customers.

Oops.

Tesla locks 80 miles of customer’s battery range for $4,500 ransom

Tesla tried to force a customer to pay $4,500 ransom over 80 miles of range that the company software-locked in his battery pack. The automaker only started to walk back on the strategy to squeeze $4,500 out of its customers after an uproar on social media.
https://electrek.co/2022/07/26/tesla-ransom-customer-over-80…

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This was a way to offer different range options without having to make production more complicated with different battery pack sizes.

https://electrek.co/2022/07/26/tesla-ransom-customer-over-80…

The Captain

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Realistically, Tesla has to pay for a cell connection for each car they support for as long as the owner keeps it in service. Somehow, they have to account for this as a liability on the books.

I have to imagine the small ongoing cost for the service is significantly cheaper for Tesla than the cost of having to do updates and fixes at a dealership.

That being said, if you get audio streaming for free in your Tesla (without the need to connect to a Sat or phone service), then ya, you should probably be paying a fee for that just like you would for sat radio.

But, paying to access already installed hardware is another issue entirely.

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Oops.

Tesla locks 80 miles of customer’s battery range for $4,500 ransom

Gosh, you’re right. Some Tesla tech screwed up and now it’s fixed. I’ve been following this for a couple of days on Twitter. What happened is that a tech followed procedure for a customer requested hardware upgrade, and because the car in question was highly unusual it resulted in an undesirable and unintended side-effect. Which nobody knew how to fix.

One thing that Tesla does really badly is communications. So when there’s an issue that needs to be addressed for a single person it often takes a real effort to figure out who to talk to about it and how to reach them.

Of course that’s relatively rare, but it’s a serious problem when you’re the one being ignored.

Tesla tried to force a customer to pay $4,500 ransom over 80 miles of range that the company software-locked in his battery pack. The automaker only started to walk back on the strategy to squeeze $4,500 out of its customers after an uproar on social media.

This part is nonsense; Fred Lambert is a well-known whiner who writes stuff like this to get clicks. Nobody tried to force the customer (not customers because this was a one off) to do anything, although I suspect they told him that if he paid for an upgrade then he could get back his battery capacity right away and they’d refund his money once everything was figured out. And since the “uproar on social media” was fairly immediate, it’s not surprising that Tesla didn’t figure things out until “after”.

But I’m not sure why I’m bothering to explain what happened, as it seems people here are more interested in faux outrage than the facts of the matter.

And, just for the record, a $4500 hit would not have anything to do with nickel and diming in my book. That would be a pretty serious screwing. The two Teslas I got at the end of 2017 are now six months out of warranty and so far they’re as happy as ever. And still getting software updates that improve them regularly.

-IGU-

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There is another point to make.

With all these software controlled cars the day will come when you will only be able to go to permitted locations.

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“Your lease is over in 30 days. To start this vehicle, please first press I ACKNOWLEDGE on your touch screen”
—-
“Your lease is over in 29 days. To start this…”
—-
——
—-
“YOUR LEASE EXPIRES IN 01 DAYS. YOUR WILL NO LONGER BE ABLE TO ACCESS YOUR VEHICLE. IT WILL NOT START, YOUR DEPOSIT WILL BE FORFEITED, AND THE VEHICLE MAY BE TOWED AT ANY TIME. ANY PERSONAL ITEMS WILL BE DISCARDED.”

Not a joke. Many subprime auto lenders install a device in the vehicle that will disable it if payment isn’t received. It also tells them where to pickup the vehicle when it is repossessed.

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I don’t know how they do this now. The data volume, potentially, is much bigger than for other cars…by design. It isn’t just navigation, but also voice command translation, audio streaming (music, podcasts, radio stations, etc.) and even movie streaming (i.e. when not driving and perhaps while waiting at a charger). There is also a (limited) web browser.

The customer pays for the service. It is $10/month or $100/year. First year is included in the purchase price of the car. As is typical, authors of clickbait rarely do much research if any at all (they are referring to the VERY few people who bought a Tesla in its infancy and got more than 1 year of connectivity included in the purchase price).

Oh, and the frequent OTA software updates that provide SW fixes and new features…FOR FREE.

OTA updates are gigantic and are only downloaded via WiFi. Usually in your driveway or garage while connected to your home WiFi. Though I did download an update last week via my phone hotspot.

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