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Hurricane Force Wins - Using Irma as a PR Opportunity

This is how you turn a weakness into a strength. The article highlighted below, talks about how Tesla enabled extra range for customers in Florida to help them escape Irma, all through an over-the-air update. Let me explain...

Electric cars have many obvious advantages - they're environmentally responsible, smooth, and very "now". There is one big disadvantage - range.

Unfortunately, it's just not possible to cram as much energy into a 50kg battery as you can get from the same weight of petrol or diesel, even when you take into account the low efficiency of internal combustion engines. That's why early electric cars had sub-100 mile ranges, and it's why a top-spec Tesla Model S weighs half a tonne more than a top-spec model of that famous 60s landyacht, the Chevrolet Impala.

The 60kWh cars in question have a range of 208 miles, in a country where car manufacturers typically size their petrol tanks for 300-400 miles of range. It looks to me like Tesla have had premonitions of headlines about Teslas being stranded on the side of the road, and they've come up with a cunning preemptive strike.

Tesla have realised they can take advantage of their pricing structure. You see, there's an artificial software limit on battery capacity - the 60kWh cars have 75kWh batteries, but you normally have to pay Tesla an extra $2000 US for the pleasure of accessing the final 15kWh. In this case, they've managed to spin what is essentially a test drive of a higher-spec model into something that looks downright philanthropic. And you'll have to excuse my cynicism, but if a few owners decide they liked having that extra range, it becomes quite a profitable promo.

With the upgrade in place, Tesla estimates the range to be increased by 30-40 miles - still more than 50 miles shy of the 300 mile petrol range, even at the optimistic end.

The reality is, although Elon Musk seems quite genuine in trying to leave the world in a better place than he found it, he owns only 22% of Tesla Incorporated. Musk is not Tesla, and the company has a fiduciary duty to put its shareholders' interests first, or face legal consequences as in eBay v. Newmark. This may well be a win-win, where Tesla makes a buck and saves the day ... but they have to make a buck.

So yes, it's a nice gesture, but they're only able to make such a gesture because the range is artificially limited the rest of the time. I put this in the category of shrewd marketing, a move that costs nothing, but positions Tesla as the hero of Irma.

Well played.

Up until a few months ago, Tesla sold a 60kWh version of its Model S and Model X vehicles — but the battery in those cars was actually rated at 75kWh. The thinking: Tesla could offer a more affordable 60kWh version to those who didn’t need the full range of the 75kWh battery — but to keep things simple, they’d just use the same 75kWh battery and lock it on the software side. If 60kWh buyers found they needed more range and wanted to upgrade later, they could… or if Tesla wanted to suddenly bestow owners with some extra range in case of an emergency, they could. And that’s what’s happening here.

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