So it's questionable to me that you believe you're paying more.

You're just getting better hardware, but it doesn't mean it would be cheaper it it was specifically crafted for your needs. (= I buy 100HP and my engine supports only 100HPs).

It's ridiculous and insulting to buy a new car (a big purchase for many) to be presented with options where the manufacturer went through considerable effort to _make the car worse_. Manufacturers should be in fierce competition to offer the best cars at the lowest price point.

Chinese competitors will absolutely crush Volkswagen and Volkswagen will have nobody to blame but themselves.

The thing that is confusing people is it was introduced backwards, I’d imagine intentionally. As stated, it reads as if the engine is being crippled. If you fired up the engine, it would not have the max performance without tweaking the timings, but it would still work. So paying more for the higher model is paying for the software tweaks.

It’s not much different from buying a couple of sticks of RAM and then overclocking them to get extra performance. The RAM works as advertised without any tweaks.

No way. If they were just making the lower model it would not have the same hardware. This was designed as a higher model and then limited, so you're paying for limiter removal.

But even if that was true, it would still be a very obnoxious sales practice. Those tweaks did not take very much effort and would be useful to almost all of their customers. Software tweaks that cost a miniscule percentage of the hardware cost should come with the hardware.

I say that's great, its better than my minimum requirements.

Then they say, 'well actually, we are willfully sabotaging this engine with software so that it will never ever give you more than the minimum, but are still charging you for the full cost of its manufacture plus markup'.

And I say, why would you deliberately make my engine worse. Just let me use it the way I want.

And they say, because by sabotaging your engine we can make other people pay even more markup for the same engine. It's the philosophy that instead of charging more for making something better, we charge more for not making it worse. Like the mafia would charge you money to not bomb your small business.

Car manufacturer thinks of the cost of the engine as something like research + development + testing + sourcing + manufacturing lines + materials for all engines produced + labor for all engines produced. So for the manufacturer profits are total revenue of units sold minus total costs. To maximize profits they need to identify market segments and figure out the best way to sell into them, in some cases by selling one physical model at different price points.

If a manufacturer only targeted your market segment with a model you wouldn't get a cheaper car, you'd most likely get roughly the same car for the same price. (Ignoring design/feature compromises made to try to address one model to multiple market segments)

Not that I agree with VW or holding features behind a subscription. Just that we can understand the unit economics of why. And anyway subscriptions for hardware features are a different matter entirely.

'Do you want to pay extra for the non-cracked windsheild?

'But the cars on the lot all look fine, no cracks'

'Unless you pay us $100, we will smash your windshield with a hammer before giving it to you. You also have to pay that $100 every month from now on, else the TOS says we can come to your house and smash your windshield. This has been shown to maximize our profits.'

The example seems a bit contrived and exaggerated. I don't think many people see things that way. A car with a suboptimally-tuned engine isn't equivalent to a car with a smashed windshield. The latter isn't even legal to drive.

Also, thanks to the internet, you can know exactly the power output of the specific model and trim (perhaps even the specific vehicle) you'll be buying before you even step foot onto a lot.

And yes you can know these things before you buy, though with modern TOS, there's no saying they can't change the terms and further downgrade your performance unless you pay up. My point is they shouldn't be allowed to do any of this in the first place. If its in the car you bought, you should have access to it.

Put another way, they aren't tuning your car for you, and that's okay, because you never knew your 110 power car was even capable of putting out 150 if you tuned it. You looked up the specific car you were buying online, saw it was listed as having 110, and thus expected it to have 110 the whole time. Then, you drove it, felt 110, were happy with 110, and bought it. No surprises there.

> there's no saying they can't change the terms and further downgrade your performance unless you pay up

Sure, just like anybody selling you a car can later come and smash it and beat you up and take your wallet and steal your identity etc etc. None of those things seem to actually be happening though?

> My point is they shouldn't be allowed to do any of this in the first place.

Why not? Your viewpoint is fair and valid, but all you've shared so far in support of it is an analogy that doesn't fit and repeating that you don't think things should be this way.

I'm confused by this statement.

You're only paying more if you want the extra capability. If you don't pay more you get the capability appropriate for the price you paid (based on the market and competition).

I think what the other commenter is getting at, is that if the manufacturer puts a 300hp engine in a car but limits it to 250hp, they still need to charge enough to make a profit. If the manufacturer produced a cheaper 250hp engine for the 250hp car, they could probably charge less for the same profit.

So it’s a double loss for the consumer of the 250hp car. They pay a higher cost and are artificially kept from the full performance of what they bought

1-As you stated, full extra cost is paid by the buyer regardless of opting for extra capability, and that cost is non-trivial

2-Same as #1 but the cost is trivial due to some internal mfg conditions we are unaware of

3-Extra cost is non-trivial and is prorated across all units based on the expected rate of purchasing the extra capability and the overall revenue vs costs. So in this case it's a partial increase.

3-Extra cost is non-trivial but the buyer does not pay more than if they had used the less powerful engine, the buyers of extra capability are expected to fully fund the cost increase to the entire group of vehicles in the program. This could still be competitive with the market for the extra capability because people can pick and choose when they want to spend the money, that flexibility has value.

We don't really know how they handled the situation but I would be surprised if it was #1 because it would make the car less competitive for buyers that don't want the extra capability.