Am at a loss: is the $2k FSD offer going away on Monday?

[dmurphy]

Again- you are.

The actual cost is probably somewhere in the middle.

Processor development - generic, ASIC, or whatnot - is EXPENSIVE. Especially something as transistor-dense as a neural processor like this would need to be. Fairly simple designs can end up being 9-digits, easily. I'd expect a chip like this to require some very serious custom work, on the order of $100m or more. You're not simply reusing an off the shelf design.

Case in point - an AI chip startup I'm familiar with has raised $56m in their first VC round. That, plus their seed money - and they haven't produced a chip yet. Maybe 50 people on the team, total thus far. I don't know how many are on Tesla's design team, but I'd guess it's more than that.

Processor manufacturing - is cheap. Maybe $40 on a current node. Less on a last-generation node. A chip like this would likely be on something like TSMC's 7nm node.

So let's take $100m (just a guesstimate on chip development cost - I'd venture it's likely more than that) + manufacturing cost, across, say, 500,000 units. Let's assume an entire years' worth of Tesla automobile production at one time. That's $240 just to cover the development and manufacture of a single NN chip.

That doesn't include the design of the rest of the HW3 system - the actual system board, ancillary interfaces (system buses, I/O etc) - or software development cost - or packaging - or delivery and field install costs or any of that.

So I'd say it's certainly more than $250 - way more - but probably less than $1,000 per unit when fully loaded.

Either way, chip development costs ain't cheap. And they're on to HW4 and possibly even HW5 by now - the NN chip for HW3 had to have been taped out a year ago now at least.

 

[OCR1]

No doubt the R&D on this chip is going to be very costly. But they are not planning on selling the chip as a standalone product. They are using it to advance the capabilities of Tesla cars, which should result in a significant number of additional sales. Since most people paid at least $3K for FSD, they have a good amount of money there to cover the cost of providing the chip to existing owners.

 

[EVDRVN]

Let's go down that rabbit hole... You seem to think there is a nefarious "reason" it isn't on the order page. But what if Tesla is just lazy about putting very detailed information on the website. What will you say if Tesla DOES add an HW3 upgrade statement on the page. Do you just say ohh my bad, or will you just change your argument or try to walk back your past statements?

I would encourage everyone to be a little measured in your positions, no matter how right you think you are because someone is going to be wrong and their character will be defined more by what their statements are when they turn out to be wrong.

Ehh who am I kidding, the people who end up being wrong won't care and they will just move on to make other crazy statements!

Every little detail? Let's list them. 1) FSD, Check.

Now all the other little details to lengthy to list 2) HW3.

Bonus detail- A time frame listed even if far into he future....

Well that was quite a list right? So much to list and remember and confusing to buyers. In addition a HW3 upgrade is quite a benefit, why leave it off? Some see it as a tipping point or a key reason to buy but it's not even mentioned.

To answer your your question, I would strongly consider buying it if it listed HW3 as part of the upgrade and I would buy now if it had a "no later than..." date. The reason I would do this is it makes a specific commitment that has recourse so in 2 years when no FSD is in sight or I never got HW3 I could get my money back. Tesla knows that being vague leaves them room to do as they please like never delivering something for years and past the point I even have my car. There are dozens of things they can do but the one thing they don't do is stand behind their word, that I know as fact. If Tesla wants to show they are reputable then they could say 1) What is included, 2) Offer a refund to any buyer if XXX is not delivered by XXX. That is easy and the right way to do business and it instills consumer confidence and would increase sales ten fold. However so would an email detailing this but my friends that do not live in the TMC bubble don't even know about this offer, now consider how strange it is to again not even market something you want to sell. Or should I say want to sell? Marketing and sales incompetence or designed to appease disgruntled buyers that follow Tesla closely. At the very least this is incredible incompetence from a sales perspective. On the other hand if they did this intentionally it says something else. In both cases it concerns me as a significant shareholder and owner.

I was not aware people's character was defined by their statements if they turn out to be wrong. I will also note that I never said Tesla will not deliver FSD or HW3 with this promo so if they do it does not make me wrong or right, if both do I get no character points? The issue at hand is the vague part, the definitions also are in flux and the deliverables are not defined in detail. In fact they may not even know what they are going to deliver as others have noted. I think many people see this for what it is and some would click on a blank page that says FSD $1000.

 

[notAnExpert]

Which doesn't actually exist, so that's not really a "fact"

I'm not sure "imaginary contract doesn't confirm the promise the company has repeatedly and explicitly made in multiple other places and sources, including the official quarterly call on their own website" is a compelling counter-argument to the actual facts.

Has anyone who purchased FSD after the fact gotten a purchase agreement and be willing to post it here? I got FSD in my car, but my purchase agreement doesn't mention what that entails (technically it didn't mention what EAP was in my old car either).

When I availed AP+FSD for $5K deal last Friday, they did in fact show a screen before I hit the final Buy button. I wish I had saved that screen. If I remember right, it only showed what was available today under AP and FSD, nothing about the future. It also said that the features are not returnable once bought.

I'm also a skeptic about what FSD might include in future, but I went ahead and bought it even after seeing that screen because I still believe that Tesla would have to do the right thing by providing whatever hardware is needed for FSD because they continue to claim on their website that their cars include hardware needed for FSD. And as @Knightshade has noted many times on this forum, Musk has very clearly stated in recent interviews and tweet messages that HW3 will be provided for free for FSD customers. I understand the skepticism behind what he says because of his track record with timelines, but I think we are overanalyzing this.

 

[OCR1]

I don’t think Tesla is intentionally being nefarious in their omission of HW3 in the product description. My theory is that it has more to do with Elon’s leadership style. Instead of sitting down with his management team and discussing a roadmap for FSD and how he is going to handle the details of the upgrades, he just sends information out via twitter. With so much turnover in the executive team, there is likely nobody in charge of taking that information and turning it into a clearly documented deliverable. Perhaps his general counsel might have overseen this if he hadn’t left after only two months on the job. But with so much going on at Tesla, and Elon’s mercurial nature, important details like this get overlooked while the team he has in place scrambles to keep up with the constant chaos in the organization.

In the last two weeks the team has had to respond to price drops, stores closing, stores not closing, prices increasing, Model Y announcement, CFO departing, general counsel departing, head of accounting departing, and on and on. With all this chaos who has time to think about HW3.

 

[dmurphy]

No doubt the R&D on this chip is going to be very costly. But they are not planning on selling the chip as a standalone product. They are using it to advance the capabilities of Tesla cars, which should result in a significant number of additional sales. Since most people paid at least $3K for FSD, they have a good amount of money there to cover the cost of providing the chip to existing owners.

.... far from significant.

The consumption volume across Tesla's entire production run is peanuts in the world of processors.

At the high end, what, a million of these things? That'd encompass every vehicle Tesla's ever built, plus what they plan to build all in 2019, and some spares. Not even a fly in the ointment for most fabricators.

Let's assume 200 dies per 300mm wafer. Heck, I'll even go 150 dies per wafer. That's 6,666 wafers needed.

Now let's assume a 20% defect rate - that would be ASTRONOMICALLY high but whatever ....

For the entire freakin' production run, that's 8,000 wafers total.

Basically, the kind of job TSMC runs when they've got spare cycles.

Nothing significant about it, in the world of silicon. That means cost per unit remains high.

And I really, really think I'm shooting low on the R&D cost here. Like, off-by-a-factor low.

I'm not saying that it's the wrong thing to do - it may or may not be. But no matter whether it was the right or wrong call for Tesla to get into NN chip development, it isn't going to be cheap to produce when you only have ~1m units to amortize across.

 

[EVDRVN]

I don’t think Tesla is intentionally being nefarious in their omission of HW3 in the product description. My theory is that it has more to do with Elon’s leadership style. Instead of sitting down with his management team and discussing a roadmap for FSD and how he is going to handle the details of the upgrades, he just sends information out via twitter. With so much turnover in the executive team, there is likely nobody in charge of taking that information and turning it into a clearly documented deliverable. Perhaps his general counsel might have overseen this if he hadn’t left after only two months on the job. But with so much going on at Tesla, and Elon’s mercurial nature, important details like this get overlooked while the team he has in place scrambles to keep up with the constant chaos in the organization.

In the last two weeks the team has had to respond to price drops, stores closing, stores not closing, prices increasing, Model Y announcement, CFO departing, general counsel departing, head of accounting departing, and on and on. With all this chaos who has time to think about HW3.

Hundreds of people calling CS and service to get clarity and no response. Requests for this in writing over email denied. Tweets to Elon to confirm and still no addition the the text on the website. I can assure you with 100% certainty that if that is true then Tesla is doomed if they move that slow or that sloppy. If the head of sales and marketing has not heard all this a hundred times over they are living in a cave, if you are in that position at Tesla and did not know that HW3 was going to be included then there is a serious problem.

They also forgot to tell all the customers about this "promotion". Jus a small detail. So if this is to make everyone happy then once it is gone and people find out they will have another unhappy group. Just a small detail they forgot when they changed the website and added a purchase option to the cart the code to update the cars on the Tesla DB, etc. Right. I predict this to change yet again this or next week when they put up the sales strategy dart board.

 

[Knightshade]

If Tesla expects HW3 to be "it" then they'll have a lot more than 1 million units to split cost across.

500k/yr is the expected run rate by end of 2019, plus all the HW2+ cars made so far for retrofits which is hundreds of thousands more, plus another couple hundred k, per year, for Model 3 production once the China factory is online.... and that's not even mentioning Model Y production yet.

Depending on the speed of the production ramp, and the fact Y demand should be much higher than 3 demand (given crossover/SUVs sales #s compared to Sedans) it's not insane to see Tesla selling well north of a million cars per year by 2020, and using HW across several million cars at least.

Granted a decent number of ifs in there- IF the china factory gets up to speed, IF the gigafactory Y production gets up to speed, IF HW3 sticks around a few years... but all of those are stated goals of the company at this point.

 

[Knightshade]

Hundreds of people calling CS and service to get clarity and no response.

BS number you just made up- CHECK

I've seen maybe what like 5 guys mention even asking?

And virtually all of them got a response

Most, in fact, got one confirming what you keep refusing to accept- That you get HW3 with FSD.

Requests for this in writing over email denied.

Folks have posted this, in writing, from online chat.

Why's that no good, but email is MAGICAL AND PERFECT again?

(for that matter- why is email from Joe Level 1 Support any better than directly in writing from the CEO on twitter?)

Tweets to Elon to confirm

Yup.

In writing no less!

Also in audio, directly on Teslas own website.

Weirdly NONE of these are good enough for you because... REASONS!!!

and still no addition the the text on the website

Also nobody personally came to your home to confirm it either MUST BE FAKE NEWS

. I can assure you with 100% certainty that if that is true then Tesla is doomed if they move that slow or that sloppy.

Insert that meme of Willy Wonka going YOU MUST BE NEW HERE.


Seriously dude, Tesla is -terrible- at communication and organization and messaging and has been for, basically, ever.

Fake shock at something everyone is aware of notwithstanding.

If the head of sales and marketing has not heard all this a hundred times over they are living in a cave

You mean...Elon Musk?

Because that's literally who has held that job fairly recently (when execs have left he simply had the relevant team report to him for a while)


You know- the guy who has answered your question in writing and you refuse to accept his answer

, if you are in that position at Tesla and did not know that HW3 was going to be included then there is a serious problem.

Elon knows it'll be included.

one way you can tell is he keeps explicitly saying so for months.

You just refuse to take yes for an answer.

They also forgot to tell all the customers about this "promotion"

It's not a promo.

it's only relevant because it's needed to make FSD work. So if you buy FSD, you get the HW.

It'd be like you demanding a restaurant call out IN WRITING that ordering a steak COMES WITH A STEAK KNIFE.

 

[dmurphy]

If Tesla expects HW3 to be "it" then they'll have a lot more than 1 million units to split cost across.

500k/yr is the expected run rate by end of 2019, plus all the HW2+ cars made so far for retrofits which is hundreds of thousands more, plus another couple hundred k, per year, for Model 3 production once the China factory is online.... and that's not even mentioning Model Y production yet.

Depending on the speed of the production ramp, and the fact Y demand should be much higher than 3 demand (given crossover/SUVs sales #s compared to Sedans) it's not insane to see Tesla selling well north of a million cars per year by 2020, and using HW across several million cars at least.

Granted a decent number of ifs in there- IF the china factory gets up to speed, IF the gigafactory Y production gets up to speed, IF HW3 sticks around a few years... but all of those are stated goals of the company at this point.

All very true and part of the assumption equation .... I'd be less concerned about the china and giga-Y factories coming up to speed than a chip re-spin, to be honest.

First time out of the chute developing hardware, it's difficult to get it right. Once in the field, all sorts of wacky things crop up, and there's only so much you can correct with firmware.

Even if you assume a 3 million unit run across 24-36 months, that's still only 24,000 wafers. 8k per year? Still mouse nuts. And I don't know how they amortized the R&D costs, but it's hard to do so against unknown variables like that.

I'd expect a re-spin or a new chip altogether by the time we get to millions of cars per year. The constant leapfrog in the silicon industry is mind numbing and perennially frustrating!

Anywho - I think we're in total agreement - this stuff ain't cheap, but it's probably not $1,000 per unit, either.

 

[EVDRVN]

Just called CS, Asked about this. Same person said the following: "We don't do hardware upgrades." "Then let me check with someone else" "I would go with Elon's Tweet" Can you put that in writing? "Can't give you an answer in writing" . Then after more probing,... "Let me be candid, my supervisor is aware of all this, it is completely dysfunctional here and you know what I know". "We are just as frustrated and we have no real answers". I ask if there was a communication about this, "no" Then passed to Vehicle Support... "2.5 will support all FSD new features list for future features this year. We do not know when HW3 will drop or if there will be an additional charge for you for hardware to make "FSD" work. I ask could I possibly need to buy additional hardware to make that work? "Yes". So I am only paying for the FSD software and not EVERYTHING that is required for future FSD? "Yes, you may need to pay for additional hardware."

Lastly... "May be announcements this eve but I only can be assured the features listed will be included on the list now.

Basic summary for these and other comments, there is no assurance you may not need to buy hardware for some upgrades.

 

[dnvr-ev]

They didn't.

It was pointed out the GPU used in HW2.5 (when attached to an entire consumer video card and sold as the GTX 1060) costs $250, and once again dnvr-ev whipped out his Jump to Conclusions mat)

You crack me up, Knightshade. What do I win if I’m right?

Wait, machine learning here, let me anticipate your response before you make it using my Gameboy ROM that has been retrofitted into a self aware sentient artificial intelligence.

Knightshade responding to me 3 minutes from present time, “You will will nothing, because again you are wrong.”

 

[diamond.g]

Just called CS, Asked about this. Same person said the following: "We don't do hardware upgrades." "Then let me check with someone else" "I would go with Elon's Tweet" Can you put that in writing? "Can't give you an answer in writing" . Then after more probing,... "Let me be candid, my supervisor is aware of all this, it is completely dysfunctional here and you know what I know". "We are just as frustrated and we have no real answers". I ask if there was a communication about this, "no" Then passed to Vehicle Support... "2.5 will support all FSD new features list for future features this year. We do not know when HW3 will drop or if there will be an additional charge for you for hardware to make "FSD" work. I ask could I possibly need to buy additional hardware to make that work? "Yes". So I am only paying for the FSD software and not EVERYTHING that is required for future FSD? "Yes, you may need to pay for additional hardware."

Lastly... "May be announcements this eve but I only can be assured the features listed will be included on the list now.

Basic summary for these and other comments, there is no assurance you may not need to buy hardware for some upgrades.

So you are saying you got a typically dysfunctional Tesla response.

 

[dnvr-ev]

Just called CS, Asked about this. Same person said the following: "We don't do hardware upgrades." "Then let me check with someone else" "I would go with Elon's Tweet" Can you put that in writing? "Can't give you an answer in writing" . Then after more probing,... "Let me be candid, my supervisor is aware of all this, it is completely dysfunctional here and you know what I know". "We are just as frustrated and we have no real answers". I ask if there was a communication about this, "no" Then passed to Vehicle Support... "2.5 will support all FSD new features list for future features this year. We do not know when HW3 will drop or if there will be an additional charge for you for hardware to make "FSD" work. I ask could I possibly need to buy additional hardware to make that work? "Yes". So I am only paying for the FSD software and not EVERYTHING that is required for future FSD? "Yes, you may need to pay for additional hardware."

Lastly... "May be announcements this eve but I only can be assured the features listed will be included on the list now.

Basic summary for these and other comments, there is no assurance you may not need to buy hardware for some upgrades.

Wow!!! And there it is. If you are debating FSD, the only promise you are getting is stopping at signs and lights with some nav. It’s just going to be enhanced enhanced autopilot. ASD or Autonomous self driving will be available in 2023 as an additional $7,000 upgrade.

 

[EVDRVN]

Wow!!! And there it is. If you are debating FSD, the only promise you are getting is stopping at signs and lights with some nav. It’s just going to be enhanced enhanced autopilot. ASD or Autonomous self driving will be available in 2023 as an additional $7,000 upgrade.

The only thing they will commit to is the remaining features is the listed features with existing hardware. I spoke to another very competent person above that person that validated this. My take away is 1) There is no promise of HW3 or whatever that means and yes you are only paying for FSD software. 2) The communication and leadership is broken.

 

[Knightshade]

Just called CS, Asked about this

Well there's your first mistake....

. Same person said the following: "We don't do hardware upgrades."

Which is weird, because we know for a fact have done in the past (see the LR RWD guys who got suspension swapped out for the softer one, for free, and that's not even part of their purchase like FSD stuff is).

It's almost like level 1 phone support is universally staffed by useless clueless people or something.

"Then let me check with someone else" "I would go with Elon's Tweet"

See, he asked a level 2 guy who already knows phone support is usually the last to know anything. Often behind their own customers. Good on him.

Can you put that in writing? "Can't give you an answer in writing" . Then after more probing,... "Let me be candid, my supervisor is aware of all this, it is completely dysfunctional here and you know what I know" "We are just as frustrated and we have no real answers". I ask if there was a communication about this, "no"

Yup, as I said.

And while Tesla is especially bad at this, it's HARDLY confined to new/small companies.

Back in 1997 Microsoft released Internet Explorer 4 which was a pretty huge deal at the time.

Over at IBM, still a huge player in the PC game at the time, the phone support group set up a dedicated group just to support IE4 calls. They added IE4 support to the phone tree options.

Problem was- IBM only supported IE4 when it came preloaded on an IBM computer. And the IBM preload wasn't scheduled to get IE4 included for another 6 months. And nobody in phone support had bothered to coordinate with the preload people.

So for 6 months an entire phone support group at IBM was paid to answer support calls for a product they didn't actually support at all, but that had a dedicated support option in the phone tree.

Then passed to Vehicle Support... "2.5 will support all FSD new features list for future features this year. We do not know when HW3 will drop or if there will be an additional charge for you for hardware to make "FSD" work. I ask could I possibly need to buy additional hardware to make that work? "Yes". So I am only paying for the FSD software and not EVERYTHING that is required for future FSD? "Yes, you may need to pay for additional hardware."

"People on the phone have no idea what's going on... I KNOW I WILL ASK MORE PEOPLE ON THE PHONE!"

Call 10 times you'll get 10 different answers. Hell you got 3 different ones in one call apparently.

Meanwhile, the actual CEO has been providing a clear, unambiguous, and consistent answer to your actual question since at least August of 2017, and the message hasn't change one bit since.

If you paid for FSD, and you need HW to make FSD work, you get that HW free.

Lastly... "May be announcements this eve but I only can be assured the features listed will be included on the list now.

Shocker- he repeated he has no idea WTF he's talking about.

Basic summary for these and other comments, there is no assurance you may not need to buy hardware for some upgrades.

Again except for literally every single thing the actual CEO has said since mid 2017- and what their own investor call on their own website says.


but sure- stick with phone support not being sure instead. THAT makes sense.

You crack me up, Knightshade. What do I win if I’m right?

Wait, machine learning here, let me anticipate your response before you make it using my Gameboy ROM that has been retrofitted into a self aware sentient artificial intelligence.

Knightshade responding to me 3 minutes from present time, “You will will nothing, because again you are wrong.”

but that response doesn't answer your actual question.

You'd win whatever you were otherwise willing to lose if (read as when) you end up being wrong would be my actual answer.

 

[dmurphy]

You seem to know an awful lot for someone who appears to not know what he's talking about...

I'm confused how you've gone from thinking a neural network accelerator is the same thing as a graphics card to suddenly knowing how many transistors it's going to need (not to mention how big their chip design team is and how much it's going to cost to develop). Amazing.

You're conflating me with someone else. I never said a neural accelerator is even remotely close to a GPU. They're not.

I may actually know a thing or two about chip design, costs and such. Impute into that what you wish.

 

[EVDRVN]

To add to my point about Tesla commitments, this week I was successful in getting a written commitment from Tesla honored! I was clearly promised something IN WRITING via email and after the fact was told I was wrong and it would not be honored. I will spare you all the many details but it took more than four months of calls and battling to get a reasonable person to look at this for the fifth time and they admitted I was correct and they would honor their promise. This is after being lied to and told I was basically confused and I misunderstood what was promised to me. In fact the trail of BS was so long it would take pages to describe it all. So, I had something in writing as clear as day and I had to fight and waste my time for months to get it resolved and had I not finally found a competent and honest person there I would have had to seek legal action. I simply don't see how this would have ever been resolved had I not demanded the email to confirm what was promised. Those that think tweets and announcements are direct promises to your purchases be prepared for ambiguity and possible disappointment. Those that like to roll the dice then I say please purchase FSD now so Tesla has more cash and I can pay for a potential MY with my shares Your experience may vary but I say trust but verify. Way too much time was wasted but it was not an insignificant item to forfeit. 10 points to a Tesla person -10 for Tesla being so terrible in CS, communication and all things customer related.

 

[Runt8]

You're conflating me with someone else. I never said a neural accelerator is even remotely close to a GPU. They're not.

I may actually know a thing or two about chip design, costs and such. Impute into that what you wish.

You're right, I quoted the wrong post. I apologize for that. Post deleted.

 

[dmurphy]

You're right, I quoted the wrong post. I apologize for that. Post deleted.

No worries! Happens to the best of us... and then folks like me. Haha.