This strikes me another aggressive price discrimination move. The RWD Long Range 3 has been out the longest, so there should be 0 'pent up demand' for it. By getting rid of the RWD LR option and pushing all LR buyers into the AWD version (and Performance), they squeeze extra money out of buyers at the top end (assuming the profit margin is the same or higher on AWD models).
Then, they bring in this new mid-range model to try to shave off a few more short-range (SR) holdouts and push them into a more expensive model; maybe you weren't willing to pay $9k for the bigger battery (plus $5k for premium) but you can be talked into $5k for a bigger battery (plus $5k for premium, I presume).
It's also interesting how often they've changed the price on the AWD model; it's jumped up and down a thousand a bunch of times. There's no reason this couldn't be replicated by a manufacturer with a traditional dealer model, except the dealers would tend to be annoyed at having on-lot inventory that fluctuates in 'value', although I think traditionally dealers don't actually pay for their inventory until it sells, regardless. And obviously price messaging is harder in a dealership model.
The $35k Model 3 was always going to be the hardest to produce profitably; we're either not there yet, or Tesla sees no reason to produce the lowest profit margin vehicle until they absolutely have to. The backlog of US orders must be low enough that they may as well squeeze the remaining holdouts -- although the demand certainly doesn't seem to be tailing off too quickly.
Price discrimination is charging customers different prices for the exact same thing. The SR has a physically different battery. The LR and AWD have different motor configurations. So not it isn't price discrimination.
We actually bought the RWD LR two days ago. The process for purchase is using their website to select the options you want while the sales associate sits there quietly waiting to answer questions.
Color choice was the only non binary option.
There was no "premium" option you describe.
Autopilot and full autonomous driving were optional and the associate said all cars are fully equipped to support both and they can be added at a later date.
Having 3 power train configurations is added complexity they might just be trying to avoid while also milking those who think they need LR for another 5k.
They told us up front the notugly rims were a % reduction in performance and cost extra. They're not trying very hard to separate fools from their money.
If I had to hazard a guess, I would say that the hardware to support full autonomous driving might no longer be included in vehicles and they'll be shipping with just what is necessary for Autopilot, assuming there's a difference.
Yesterday the $35k Model 3 was 3 - 6 months away. Now it is 4 - 6 months away. Situation has not changed much for those buyers that were waiting, but now they have the option of a midrange model they can order today and could qualify for the full tax credit.
Price discrimination means posting a price, and then offering discounts/markups to different groups in the same timeframe to maximize profits (while also trying hard not destroying future profit potential - your customers need to not rebel).
Market segmentation is more around defining different products with different prices at different times. At any given time, the same people will pay the same price for the same product.
Traditionally franchise dealers rely on floor plan financing from a bank. They use it to purchase inventory and can roll it over continuously. Banks are usually happy to lend to dealers at low interest rates since the loan collateral is right there at the dealership and relatively easy to repossess if the dealer goes bankrupt.
This is really frustrating as someone who bought a Tesla just for the FSD. This means the Oct 2016 FSD video was a scam and won't come to fruition this decade.
I'm predicting that they are temporarily eliminating this while they work on the HW3 suite. If they kept offering FSD, that would be more AP computers they'd have to replace for "free". They already know the 2.5 computer isn't good enough for what they want, so why give away the new hardware for free when they can just bring FSD back later for a higher price to make up for the difference.
The video wasn't a scam, but maybe it was misleading. Telsa is very far behind Waymo/Cruise (and even waymo hasn't fully solved the problem yet), they are constraining themselves to use less sensors and they have less AI expertise in house.
I expect that over the next few years, a lot of people are going to be disappointed as it becomes clear that full self-driving is going to remain something that's coming "soon" other than some pretty limited trials.
Not really, every car they manufacture (with or without FSD) always comes with the latest AP hardware they have. The FSD they were selling was just a software activation, they will probably start charging for it again later.
Someone correct me if I'm wrong but having FSD as an unfulfilled feature is a liability on your balance sheet. I once worked at a place that had to return hundreds of thousands of dollars in account credits (to be used for future services) in prep for a merger.
Yes, that video was a scam. The car took a hardcoded route and they simply kept trying over and over again for a take where the driver didn't have to take over. It's estimated they needed over 100 attempts to get usable self-driving footage.
Now they're removing FSD from the website in response to DoJ pressure.
Good. The idea that you could know what hardware would be required before successfully getting all that hardware to actually do the thing was always a bit laughable.
Edit: Actually I guess you could say they are, although the titles are so different I think it will attract different people into the comments. I would not have clicked on that link but I immediately was interested in this story.
You might buy it now if you think it will be more expensive in the future, or if you think it won’t arrive unless users send money to Tesla now, so that it has money to create it (a kind of Kickstarter, or an investment that may or may not end up being a wise one)
(If the latter, you probably are better of buying Tesla shares than buying the FSD option now. If Tesla reaches the point where it sells a fully self-driving car, those shares probably will be worth more than the price of that feature)
[+] [-] rconti|7 years ago|reply
Then, they bring in this new mid-range model to try to shave off a few more short-range (SR) holdouts and push them into a more expensive model; maybe you weren't willing to pay $9k for the bigger battery (plus $5k for premium) but you can be talked into $5k for a bigger battery (plus $5k for premium, I presume).
It's also interesting how often they've changed the price on the AWD model; it's jumped up and down a thousand a bunch of times. There's no reason this couldn't be replicated by a manufacturer with a traditional dealer model, except the dealers would tend to be annoyed at having on-lot inventory that fluctuates in 'value', although I think traditionally dealers don't actually pay for their inventory until it sells, regardless. And obviously price messaging is harder in a dealership model.
The $35k Model 3 was always going to be the hardest to produce profitably; we're either not there yet, or Tesla sees no reason to produce the lowest profit margin vehicle until they absolutely have to. The backlog of US orders must be low enough that they may as well squeeze the remaining holdouts -- although the demand certainly doesn't seem to be tailing off too quickly.
[+] [-] kennysmoothx|7 years ago|reply
The RWD LR model 3 was my go-to and the one I was considering.
With this change, they have now essentially replaced that model with one that has 50 mile less range with very little savings on price.
Now the long range version looks so much less appealing as the price is now over $60k for an AWD upgrade I have absolute no use for.
[+] [-] cptskippy|7 years ago|reply
We actually bought the RWD LR two days ago. The process for purchase is using their website to select the options you want while the sales associate sits there quietly waiting to answer questions.
Color choice was the only non binary option.
There was no "premium" option you describe.
Autopilot and full autonomous driving were optional and the associate said all cars are fully equipped to support both and they can be added at a later date.
Having 3 power train configurations is added complexity they might just be trying to avoid while also milking those who think they need LR for another 5k.
They told us up front the notugly rims were a % reduction in performance and cost extra. They're not trying very hard to separate fools from their money.
If I had to hazard a guess, I would say that the hardware to support full autonomous driving might no longer be included in vehicles and they'll be shipping with just what is necessary for Autopilot, assuming there's a difference.
[+] [-] omarforgotpwd|7 years ago|reply
[+] [-] r00fus|7 years ago|reply
Price discrimination means posting a price, and then offering discounts/markups to different groups in the same timeframe to maximize profits (while also trying hard not destroying future profit potential - your customers need to not rebel).
Market segmentation is more around defining different products with different prices at different times. At any given time, the same people will pay the same price for the same product.
[+] [-] nradov|7 years ago|reply
[+] [-] jijojv|7 years ago|reply
[+] [-] andrewmunsell|7 years ago|reply
[+] [-] ma2rten|7 years ago|reply
[+] [-] ghaff|7 years ago|reply
[+] [-] sweden|7 years ago|reply
[+] [-] shiftpgdn|7 years ago|reply
[+] [-] John_KZ|7 years ago|reply
[+] [-] gizmo|7 years ago|reply
Now they're removing FSD from the website in response to DoJ pressure.
[+] [-] ceejayoz|7 years ago|reply
[+] [-] tjoff|7 years ago|reply
The car is good enough to stand on its own.
[+] [-] dang|7 years ago|reply
[+] [-] Judgmentality|7 years ago|reply
Edit: Actually I guess you could say they are, although the titles are so different I think it will attract different people into the comments. I would not have clicked on that link but I immediately was interested in this story.
[+] [-] kennysmoothx|7 years ago|reply
Why would you pay for an unreleased product before is available having the option to upgrade to it when it is available?
Tesla has been selling FSD for years now and it has never been available, why would you buy it on the Model 3 knowing that?
These 3 questions are essentially the same, just worded differently. ¯\_(ツ)_/¯
[+] [-] Someone|7 years ago|reply
(If the latter, you probably are better of buying Tesla shares than buying the FSD option now. If Tesla reaches the point where it sells a fully self-driving car, those shares probably will be worth more than the price of that feature)