Tesla

How did Tesla make some of its cars travel ____________________ during Hurricane Irma ?


The electric - car giant gave customers a ____________________ by remotely boosting their vehicles ? battery capacity . But this act of kindness also ____________________ that it had been selling identical cars at different prices


Tesla drivers who ____________________ Hurricane Irma last weekend received an unexpected lesson in modern consumer economics ____________________ the way . As they sat on ____________________ highways , some of the electric - car giant ? s more ____________________ priced models ____________________ gained an extra 30 or so miles in ____________________ thanks to a silent free upgrade .


The move , confirmed by Tesla , followed the ____________________ of one Florida driver for a limit on his car ? s battery to be ____________________ . Tesla ? s cheaper models , introduced last year , have the same 75KwH battery as its more ____________________ cars , but software limits it to 80% of ____________________ . Owners can ____________________ buy an upgrade for several thousands of dollars . And because Tesla ? s software updates are online , the company can make the changes with the ____________________ of a virtual switch .


It is , points out economist Alex Tabarrok , an example of price ____________________ ? in this case , the art of selling ____________________ worse versions of the same or similar product for less . And it is nothing new . ? The only thing that has changed is that companies can now change the ____________________ during the life cycle of the product , ? says Dr Georg Tacke , a consumer pricing ____________________ and the chief executive of global consultancy Simon Kucher . ? As more software gets into our ____________________ , the more we are going to see this . ?


In Damaged Goods , a paper on the subject published by MIT in 1996 , economists Raymond Deneckere and Preston McAfee showed how limiting products to make them cheaper can ____________________ cost a company more in the short ____________________ . In 1990 , IBM launched LaserPrinter E , a cheaper version of its LaserPrinter . The only difference ? A ____________________ modification that slowed the printing speed to five ____________________ than 10 pages per minute .


But , as Tacke explains , manufacturing two ____________________ different versions of a product costs a lot more . The challenge is to predict the ____________________ to pay of customers while making them feel as if they have ____________________ from value ? or better features . ? If you have one product and the price ____________________ too high , people don ? t buy it . But if it ? s too low , you don ? t ____________________ some customers ? willingness to pay , ? he says . ? So you differentiate and , yes , that means ____________________ the product in some way . ?


This is why there is now also a market for ? remapping ? modern cars : ____________________ their software to unleash ____________________ performance ? like a video game ____________________ ? without touching the engines . Mobile phone and household ____________________ makers use similar marketing ____________________ to differentiate products ? and sell more overall .


But should we feel cheated by this ____________________ of hand ? ? Get used to it , ? says Tacke . The key to pulling it ____________________ , he adds , is to manage ____________________ and to do the research to get the prices right . Tesla customers driving the cheaper cars knew what the ____________________ was . And the company had the last ____________________ ; it no longer offers cheaper cars with the ? damaged ? battery , because most people bought the upgrade anyway .