In its newly updated Model S sedan, Tesla is selling a 70kWh battery that is secretly a 75kWh battery. The company has been selling them for almost a month, and is just now telling the world about it. Even better? If you bought one of those 70kWh Model S sedans, you can pay $3,250 to "unlock" the extra juice. Bizarre? Absolutely. But maybe brilliant, too.
There's a long history of "upgrading" cars to give them more horsepower or better cosmetics. It's just that most of those upgrades are usually done by adding physical bits to the car — a new turbocharger or better tires or an exhaust system. The idea of upgrading a car with software via an over-the-air update is something totally new, especially when the hardware is already in place. There is one physical upgrade made to the car, though: Tesla says it will swap the 70 badge on the back of an upgraded Model S for a 75 badge the next time it comes into a service center.
you're buying a software upgrade to unlock a physical feature
The idea, from Tesla's point of view, is to offer customers the ability to pay a bit less for the car (the Model S 70 starts at $71,000) even though they're getting the same physical hardware as the Model S 75, which costs $3,000 more. Paying less because you don't need the extra range is a good thing, in Tesla's mind, and offering a single battery makes things easier from a manufacturing and logistics perspective. And for customers who decide later that they want an extra 19 miles of range, they can do that too, for a $250 premium over buying it at the time of purchase (customers who purchased a Model S 70 between April 11 and today can upgrade without paying the $250 premium). It also ups the resale value of 70 models a little bit because they can be "upgraded" by owners at any time.
It's not the first time Tesla has offered post-purchase software unlocks for a fee. The company allows Model S owners to unlock the Autopilot semi-autonomous driving feature after purchase for $3,000 (it's $2,500 if you buy it with the car), and it even goes so far as to offer free, month-long trials of the software to entice owners to pony up the cash.
"All 70 kWh Model S with updated styling have been built with a 75 kWh battery pack and the additional energy can be unlocked at anytime through an over-the-air software update," said a Tesla spokesperson in a statement given to The Verge. "We will continue to offer the 70 kWh energy option at but we will no longer produce the packs; a decision that is the most efficient for Tesla and the most beneficial for our customers."
It's not the first time that Tesla has offered a software upgrade to batteries, though it's the first time it's received this much attention. Three years ago, owners of the short-lived Tesla Model S with a 40kWh battery were actually given 60kWh batteries that were software limited. They were given the opportunity to unlock the full battery capacity for $8,500, according to a report on Reddit. This time the battery upgrade option appears to be more of a marketing decision than one driven by production and demand, especially since Tesla plans to continue selling the 70kWh model and the 40kWh upgrade was offered after that model had already been discontinued.
the additional energy can be unlocked at anytime
The 75kWh battery option was revealed as a Model S purchase option earlier this week, though the battery has actually been included in Model S cars for almost a month. Customers that have already received a refreshed Model S 70 will get the option to buy the upgrade for $3,000, without the added fee that later customers will have to pay for not choosing the "larger" battery at purchase. Tesla salespeople will be reaching out to eligible Model S owners in the next few days to discuss their options.
Update 1:08PM ET: Added additional information about the upgradable 40kWh Model S.