A New Trend in the Automotive Industry: Performance Upgrades with PaaS (Power as a Service)

PaaS (Power as a Service) is a system introduced by Tesla in 2019, attracting significant attention in the automotive industry. This model provides performance enhancements through software updates rather than hardware modifications, with customers paying an additional fee.

In 2019, Tesla offered a software upgrade for the Model 3 Long Range that reduced its 0–100 km/h acceleration time from 4.4 seconds to 3.9 seconds for $2,000. A similar upgrade was later introduced for the Model Y Long Range AWD, reducing acceleration from 4.6 to 4.2 seconds.

This approach has also caught the attention of other manufacturers like Volkswagen. For example, VW offers an upgrade for the ID.3 that increases power from 148 hp (110 kW) to 168 hp (125 kW), available as a $22/month subscription or a one-time lifetime purchase of $853.

In Turkey, however, such a business model would be difficult to implement due to the current Special Consumption Tax (ÖTV) regime. These performance-enhancing software updates could be perceived as a form of tax evasion. Nevertheless, this trend is a clear example of how revenue models in the automotive sector are evolving.