There’s a ton, undoubtedly, on Elon Musk’s mind right now. Recent Twitter gaffes and awkward appearances on podcasts have caused Tesla’s stock value to become highly erratic. But historically, the Tesla brand was able to bounce back thanks to its ingenuity and pioneering promise in the automobile industry. That was until the batteries started to malfunction and cause harm, including fatalities to consumers.
Will Tesla be able to fully recover? Most likely, because those same volatile batteries hold the promise of the future clean-energy and renewable resources, for automobiles and humanity as a whole. The brilliance behind the batteries extends beyond the science and technology that are held within their enclosures. No, it’s the way they are packaged, priced, and sold through Tesla automobiles that shows Musk’s true business savvy.
Unlockable, Freemium Battery Packs and Apps
Traditional car dealers make their money from consumer car sales, but their biggest cash cow is the leasing and financing plans. Each month for several years they collect a car payment from their customers. When they are getting close to paying them off, they can offer another leasing deal on a brand-spanking new car.
Tesla cars are remarkably different than conventional gasoline powered cars. To the uninitiated, their reliance on renewable energy sources, and lack of corrosion caused by gasoline and gasoline by-products make the consumer lifecycle of Tesla owners seem to be short-lived. But, Tesla found a way using tactics many eCommerce business owners use to get more value out of their customers.
In 2016, Tesla updated their Model S 70 sedan with a secretly higher 75kWh capacity battery and the novel idea to sell that extra power as an “add-on.” The additional capacity costs $2,500 more on top of its starting list price of $71,000 at purchase, or customers can decide after the fact for $3,000 more. These after-sales purchases are managed by an in-car software program that lets customers buy and unlock the extra capacity right from within cars to be accessed immediately.
Additional revenue is squeezed out of customers if they want the semi-autonomous autopilot feature for another $3,000. Autopilot technology, however, isn’t without its liabilities. Tesla already is facing heat from a fatal car crash that was being operated by its autopilot feature, and Uber’s venture into the technology has also claimed a life.
The Heat is On
Though the Tesla lithium-ion batteries are certainly innovative and eco-friendly, they come at a high risk if something is to go wrong in their design. One fatal incident in South Florida caused the battery to explode after a high-impact crash, and another non-fatal incident in California saw it explode apropos of nothing.
Lithium-ion batteries, when punctured, tend to be extremely volatile shooting out flames as hot as 932 degrees Fahrenheit. After the spontaneous combustion episode in California, a Tesla spokeswoman claimed it was an “extraordinarily unusual occurrence” and praised the design of the battery architecture for saving the driver’s life. Several other companies including Sony, Samsung, and Bowing have had to recall products due to safety concerns around lithium-ion batteries.
Tesla along with its dear leader Elon Musk like to play with fire and controversy. Their products could pave the road to the future or lead us to a fiery ruination, literally. Granted, Musk and Co. are not only innovating the automobile and renewable energy industries but also introducing long-term payment features that ring their clients out of every cent possible. So, enjoy the extra Tesla add-ons, if you live long enough to use them.