When a customer said he had driven across three US states, from Texas to North Carolina, to get his car fixed, Tesla technician Jason Hughes knew something had to happen. It turned out to be an unusual problem: the Model S had lost a third of its battery life in an instant, while parked in a driveway.
One of the US electric car maker’s big selling points is that it is constantly connected to its vehicles via mobile networks, offering software updates and entertainment downloads “over the air”, or OTA. This remote connection could be revolutionary for the industry, opening the door for self-driving features to be downloaded and TV shows to be streamed live in high definition. But the connected car has teething problems.
It was the second time Tesla engineers called one of Hughes’ customers after the service to tell them they had fixed a “bug” in the car’s setup. This time he had restored the vehicle to its original range of 60 kWh (about 215 miles), a huge drop from the 90 kWh (over 300 miles) that his battery was capable of following warranty repairs a few years earlier. Tesla wanted $4,500 to switch the car back to the longer range, in what has been labeled a battery rescue.
A new Tesla has a battery range of over 300 miles, or may have. Photograph: AP
“They were rightly outraged,” said Hughes, who owns car service company 057 Technology, 60 miles from Charlotte, North Carolina. “If it’s sitting in your driveway, I don’t think anyone should be allowed to get into it.”
The manufacturer, which did not respond to a request for comment, eventually switched the car back to the longer range after Hughes posted about his experience on social media, but this is just the latest example of the unsettling control that consumers must now cede to technology companies. . What is given OTA can be taken away OTA.
Tesla is by no means the only automaker that has annoyed potential buyers with features (the kind that are available at zero upfront cost on a smartphone) that can be removed if you don’t pay your dues. Mercedes-Benz charges £19 a year for the ability to access a to-do list and calendar via the dashboard. Volkswagen charges £590 for the navigation upgrade on recent models.
These are software downloads, but a “microtransaction” model similar to car hardware subscription is also being introduced. BMW has started offering heated seats for £15 a month in the UK – the technology is installed, but can only be used if paid upfront or monthly. This month’s revelation sparked a barrage of disbelieving news.
“Heated seats make everyone laugh, but there’s a logic to it,” said Philippe Houchois, an auto analyst at investment bank Jefferies. It’s a way for automakers to “try to get more revenue and recurring customer choices.”
For Tesla, this model, akin to razor blade subscription schemes, promises to be lucrative: at the end of June it claimed to have $2.7 billion in “deferred revenue” tied to software updates on its books. Analysts expect that to grow as its self-driving software improves. By 2023, half of the top 10 automakers will offer unlocks and capability upgrades through software updates that drivers purchase after they buy the vehicle, according to research firm Gartner.
Apple was fined for software that deliberately slowed down older iPhones. Photograph: Régis Duvignau/Reuters
Nor are car owners the only consumers learning that software can be complicated in ways that hardware can’t. In 2017, Apple admitted that its software was slowing down the performance of older iPhones. He said the design was aimed at saving battery life, but critics said it was an example of “planned obsolescence” — artificially shortening a device’s lifespan to get buyers to upgrade sooner. In 2009, Amazon provided a perfect metaphor for the potentially dystopian implications of the subscription economy when, without warning, it revoked copies of George Orwell’s novel Nineteen Eighty-Four from all of its Kindle e-readers.
Marketing information from BMW’s online store suggests that users must also pay for potentially life-saving features such as automatic braking if a pedestrian enters the road. In response to queries from the Observer, the carmaker was quick to say that the online description was incorrect and that the safety features were fitted as standard on all vehicles.
It will be interesting to see how consumers respond to being charged for using hardware that has already been installed Wasi Rivzi, analyst
But with more and more automakers starting to charge for self-driving capabilities, which may or may not be safer than human driving, the scenario for paid safety features isn’t entirely far-fetched. Insurers could then refuse to cover drivers who choose not to pay for crash-reducing technology.
BMW, which also tried in 2019 to persuade users to pay $80 a year for the privilege of linking iPhones via Apple CarPlay, says remote updates are a boon for consumers. “It offers the opportunity to add selected features that were not requested when the vehicle was built,” said a spokesman. “This is especially useful for secondary owners, as they have the opportunity to add features that the original owner did not choose.”
Then there is the manufacturing logic. Automakers are very good at building tens or hundreds of thousands of identical products with high efficiency, but each adjustment to the specifications of different models costs money. Installing technology like heating elements in every car seat and charging them to activate later can end up costing a premium manufacturer less, even if many haven’t been used.
“That works as long as what they’re offering is unique, which is rare in automotive,” Houchois said. If rival Mercedes-Benz were to go standard, BMW would have to do the same.
Wasi Rizvi of equity research firm Redburn said it would be “interesting to see how consumers respond to being charged for a service where the hardware is already installed and there is no obvious incremental cost ” for car manufacturers.
Iain Litchfield, owner of Litchfield Motors, a Gloucestershire-based company that offers performance upgrades, said manufacturers had long secretly had limited capabilities, such as more intense engine performance. Under the new business model, automakers will have the power to instantly turn off updates again.
There would be a “game of cat and mouse,” Litchfield said, as automakers tried to push the limits of what owners would agree to pay. “If they’re constantly in control of your car … it’s not really yours,” he added. “Nobody wants Big Brother watching you all the time.”