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Comment by kylecordes | Hacker News Reader

I wonder why they've chosen to increase their costs and mfg complexity by offering all those options; does anyone one really want (for example) a car at this price range with the "base" seats? Is it really worthwhile to have (and support) 3 battery options? 5 charging options? It is worth the complexity, testing, etc. to support both the lesser and better tires, on a car in this price range? Worth building it with two kinds of headlights? Two stereos?

I wish they were taking more cues from Apple and fewer from GM. Make the car is just a few price points, and no "not so awesome" variations at all. Spend that time/complexity/cost budget on building more cars and signing up more dealers.

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People have different desires and needs. It makes some sense to provide options--some people in the market for an electric car are probably also adverse to leather for example. And the batteries are hugely expensive so if you don't need the range, it could be wise to not pay so much more.

Apple provides tons of options. You're looking at it the wrong way--Tesla has two models. Apple has a bunch. You can customize either Tesla and similarly there are a bunch of custom BTO options from Apple (I'm typing this on one that I customized in fact).

You're probably right on the leather.

But I stand by the general point, and specifically I think it is idiocy to make any of the following optional in a car-of-the-future starting at $50K.

* Xenon headlamps

* Automatic keyless entry (seriously? fumbling with keys to unlock the door?)

* Homelink

I suspect Tesla itself is full of people who agree with this... and that all these obviously silly things were done solely to hit an "under 50,000" starting price point.

I agree about some of the options, just not options in general. It's a way for them to get the bottom tier price down though which is important for marketing.

I think automatic keyless entry refers to proximity-sensitive door locks that open automatically when you get near the car with the "remote".

True story: Two friends are walking towards a car equipped with a proximity-sensitive sensor. The car turns on (without the need to plugin the key or even to take them out) and they drive away. The driver drops her friend at her house and drives off. A few blocks latter the car shuts off.

What do you think happened? Turns out the driver had given the keys to her friend for safe keeping while they were shopping at the mall (not sure why so don't ask). Unfortunately the friend forgot to return the keys before she got off.

My friend told me a similar story, except that he was dropping off his friend at the airport. After he dropped him off, he drove off, not realizing he didn't have the key till a few miles later...

My previous car had automatic keyless entry. If the key is not in the car then an audible beep sounds. Be quite difficult to miss that. I wonder if the above anecdotes are based on after market installations?

My Nissan Altima beeps too. It also shows a picture of a key and "No Key" on the dashboard if the engine's on but a key isn't in range.

These stories are actually impossible with keyless entry. My car has keyless entry (2009 Hyundai Genesis) and if the key leaves the vehicle, you get a beep and warning message immediately that says "Key not in vehicle", and the car continues running, forever, until you stop the engine. The only way you could end up somewhere with a non-functional vehicle is if you threw the key out the window (or gave it to a friend), ignored the constant beeping and warning messages, and then proceeded to drive away, park the car, stop the engine, then get out of the car. You still wouldn't be able to lock the car doors without the key.

Cars that immediately stopped the engine while driving would be considered a safety hazard and no car company in the world would release a car like that. Imagine if your engine shut off at 70mph on the freeway.

They're basically copying a strategy that has worked extremely well for Porsche.

Three base models with varying degrees of performance + a limited edition version. And then you can expect to spend ~10k in options.

Nearly all luxury car companies use this pricing strategy (and this certainly is a luxury car). The base models are often quite stripped, but the dealerships expect you'll want the options and stock accordingly.

Even non-luxury cars tend to do that, so they can advertise lower base prices. When I bought a Honda Civic, the base price didn't even include air conditioning! All the cars on the dealer's lot did, though; you would've had to special-order if you really wanted the stripped-down base model.

While I agree that e.g. the Xenon headlamps or the two USB ports should be standard instead of options, I know some people who would PAY to have to use the keys to lock/unlock their car. I experienced numerous occasions on which I was not able to lock my car because of interfering radio signals.

This is the standard price discrimination tactic that is used all over the auto industry, e.g. $700 for Bluetooth, $3000 nav systems, etc. It's good for getting people to spend as much as they're capable of.

FWIW homelink is all but useless in condo buildings as nearly all newer construction uses dynamic codes. Just can't pair them without the building manager. And that's even not getting into strata bylaws explicitly prohibiting in-car gate openers. So it's reasonable to have it as an option.

Automatic keyless entry is likely referring to automatic unlocking based on the proximity of the key fob and/or grabbing a door handle. Though I agree that this should be included by default, the same as Xenons (though these buggers are expensive to replace, could be up to $2K depending on the car).

The upgrades have marginal cost to Tesla and a lot of value to the customer. The Model S Performance adds a bigger battery, better inverter, leather, and active suspension - imagine this costs Tesla about $5k and they can double the price of the car.

I believe the marginal cost of the battery is much more expensive than that for them.

Are marginal costs enough to see the impact of offering multiple options? My concern is that by having so many battery & other options, Tesla is probably requiring different manufacturing processes, different equipment, which can dramatically affect costs (esp. fixed costs). To put it more simply, if you offered only 1 option, you manufacture at scale and can easily bring down unit costs. However, if you are offering, say 3 options that means you split your scale by 1/3 and its harder to bring unit costs.

This wouldn't be an issue if the parts being built were commodity items but I assume a lot of the parts for Tesla are quite customized / niche. To put it another way, I remember reading that for some American manufacturers it was actually more costly to produce manual cars since demand is so low in the US and assembling them would require a separate line which would reduce efficiency.

However I really don't know anything about manufacturing cars. Anyone with auto industry experience want to chime in?

Tesla is probably requiring different manufacturing processes, different equipment, which can dramatically affect costs (esp. fixed costs).

What manufacturing process are you speaking of? It's a single chassis and single production line. All the parts are bolted on the same way in the same places.

I've worked in a radio factory and it is a highly synchronized machine. All the parts arrive in the right place at the right time. For build cost it only adds a marginal amount which Tesla appears to be recouping.

to produce manual cars since demand is so low in the US and assembling them would require a separate line which would reduce efficiency.

This information is probably out of date. Most cars today are FWD. The gearbox is mated to the engine block and then dropped onto the chassis. They only have to select the proper linkages and shifter. It might be 1:10 US cars that are manual but I don't think it needs a separate line for this.

Makes sense - good to know. So basically there are no scale advantages with going with one battery type instead of 3?

Hey, you'd like a macbook air?

11 or 13? slow or fast?

4 options - for model s and macbook air.

I'm quite happy they have a range of options for battery.

The Prius was criticized for having only a single higher end model early on.

The variations here makes sense. The main variables seem to be of fairly modular components: battery, motor controller/inverter, wheels+tires, suspension and trim. And of course paint.

This fits exactly with the Apple strategy of pricing variation in an area that is valuable to the consumer (e.g. storage/RAM/CPU-clock), but fairly modular and easy to create and support.

The optimal number of options depends on how long consumers spend making a buying decision. A $50,000 car should have more options than a $2000 laptop or a $500 tablet.

Don't you have that backwards? More options forces consumers to spend longer making buying decisions, surely.

Normal people put more time in making decisions involving large amounts of money. They are more likely to walk away if they can't get what they want. Letting them make minor decisions like color, pattern, etc invests them in the product so they are more likely to buy.

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