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Analysis of the price-hike for FSD, and the options it allows Tesla

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It does when it's a single-use license tied to a vehicle's VIN. If 50% of the useful life of the vehicle is gone, so is 50% of the value of FSD.
A valid point, but of course Tesla keeps raising the price. If they followed the above philosophy it would be cheaper to buy FSD the more miles you have on your car. (Which would make many people wait until it actually works before buying it for a car...)

In fact, for this reason, the monthly fee actually make the most sense for many, but you don't get hardware upgrades. FSD in theory assures you of even the LIDAR they probably will need to add to the cars, should it come to that. (Or perhaps they refund.)
 
The older the FSD gets, the resell value should get higher toward the $100,000 tweet estimate:

I honestly can't see FSD being worth $100K. I think they are pushing the limit now at $15K.
 
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If, and it's a big *if*, they realize L4 driving on a Tesla in the future, the value could be quite large. Imagine getting into your car and just telling where you want to go and sitting back. It's like having a personal chauffeur. You can watch TV/Movie, read a book, take a nap, get some work done while your car drives you around.

If you hired an Uber to take you everywhere you wanted to go, every day, calculate how much that would cost you. I just checked my trip to my office and it's $32 one-way (UberX). So that would be $64 per day just for work. 5 days a week, 4 weeks a month would be $1280/mo. Add in other trips, like groceries, hanging with friends, etc.

Not sure about $100K, but it's worth a lot more given the capabilities of L4.
 
I honestly can't see FSD being worth $100K. I think they are pushing the limit now at $15K.
It's the same principle as if I buy a bond for $15,000. At maturity, it's explained to me that I'll get $100,000, not just the measly $15,000. Very easy math. Very easy to understand. That's what's great about Elon Musk: Your car will make money for you so what can go wrong?
 
It's the same principle as if I buy a bond for $15,000. At maturity, it's explained to me that I'll get $100,000, not just the measly $15,000. Very easy math. Very easy to understand. That's what's great about Elon Musk: Your car will make money for you so what can go wrong?
There is a big difference. A bond has the guaranteed value at maturity. Musk is guaranteeing absolutely nothing. I don't see any money back guarantee either.
 
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FSD could earn $30,000 annually by picking up rides even you are sleeping at home.

So if you sleep through 4 years, that's $120,000. Very easy math!

Elon Musk: Tesla owners could earn $30,000 per year with robotaxis
This presumes Tesla is the only game in town. Of course, a score of companies are working to also produce self-driving systems to be used in robotaxis and other cars. In a competitive market, you can't charge such a fortune, no matter how much money it makes for you. In a competitive market the price of rides drops and your income from them drops too.

A car also doesn't earn $30K annually, even if it provides 30,000 miles of rides at $1/mile, say. (The average full time taxi in NYC provides about 62,000 miles/year at $2.50/mile.)

That 30,000 miles will probably cost you at least $12,000 in electricity, maintenance and wear and tear on your car to start. There is also the cost of the times when you can't use your car because it's out working.

And Tesla didn't promise to make membership in this Tesla robotaxi network be free. Tesla will take a cut. Uber takes 25% to do very little, what will Tesla take?

Even if Tesla is the only game in town, you just can't make that much profit. If you can spend $12,000 and make $30,000 then somebody else is going to charge only $20,000. It's still a good margin. And your margin goes down until it's decent but modest. It may not pay for your FSD though, certainly not if it costs $100K!
 
No, Tesla is hardly giving up. I think it's quite the opposite.

Solving FSD generally is, of course, a far more massive undertaking than than a geofenced solution that doesn't scale as easily. There are inevitable setbacks and discoveries along the way for all the players. So, the timing outlook for achieving it is ummm.... elastic! 🤣 Elon continues to blow through his estimates and set new ones (perhaps intentionally to support the below strategy).

I do think that Tesla believes it'll achieve a general FSD solution at some point, and they've made (and continue to make) huge investments toward this. Their strategy, as I see it, makes a lot of sense from a business perspective to achieve FSD as quickly and cost efficiently as possible. Off the top of my head:
  • Collect revenue from EAP and FSD purchases to fund R&D, design hardware, build hardware, replace hardware, etc. Even though it can't all be booked as earned revenue until FSD is delivered (under GAAP rules), it's still cash that can be used in the meantime. Isn't accounting fun? 😉
  • Collect massive amounts of data from their growing vehicle fleet to feed the data hungry learning processes and help speed development.
  • Yes, the first two points mean Tesla customers are funding and supporting this effort to large degree. Software companies do this a lot: Have one customer pay for software development that the customer wants. Then, the software company turns around and sells the same nifty solution to many other customers at a tidy margin. This is similar in my mind; the key difference is that anyone who buys FSD does so with the knowledge that the solution isn't baked yet.
  • Create purpose-built and propriety processing power such as the DOJO and their own chips for it to reduce cycle times for FSD / beta improvements.
  • Iterate on the development and vehicle hardware as needed. We've already seen multiple and various hardware changes in the vehicles and know more are on the way --HW4, improved cameras and ultrasonics. I wouldn't be suprsied if more cameras get added aorund future vehicles. This may be just for the Cybertruck (for off-road purposes), but maybe not (reference HW4 makes first appearance in Tesla source code, hinting at impending release).
  • Increase FSD prices as much as the market will bear (limited price/demand elasticity, but enough to play with). Expectation stretching (Elon's timeframe statements over the years) supports continued sales even though FSD is still very much in beta.
  • Retrofit previously delivered vehicles where possible (and legally obligated). This can of worms may get more worms!
  • Switch entirely to monthly or annual subscription fees for EAP and FSD. Recurring revenues are often preferred over the one-shot of a perpetual license.
  • Sell DOJO processing time to other OEMs, scientists, researchers, companies, etc.
  • License / sell Tesla FSD to other OEMs for their vehicles.
  • Re-purpose Tesla FSD related technologies for other applications (Optimus, etc.) within and beyond Tesla's product portfolio.

I do believe we'll see FSD from Tesla inside of five years from now (hopefully sooner), and it's going to pay off handsomely for Tesla. We'll know (a little) more after the upcoming AI Day.
 
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Current MobilEye commercial L4 costs around $10's thousand.

2024/2025 Future competition: MobilEye Consumer L4 that drives "everywhere" with the car manufacturer cost <$5K, and it can have an MSRP of $10,000 for consumers.


1641600218243.png



Cost reduction will be possible by reducing the numbers of LIDAR down to one for the front only and using Software-Defined Imaging Radars for the rest of the 360-degree coverage.

I think MobilEye Software-Defined Imaging Radar is like 4D-radar that can yield more info such as an object's speed, direction, depth, and elevation:

It can simulate as if it's LIDAR:

6hsRSbR.jpg


The picture below is not from a camera. It comes from Software-Define Imaging Radar:

dTmI6mK.jpg



This is not about the current FSD beta that requires hands-on steering, or you'll be expelled from the program.

This is about 2025 L4 driving everywhere for consumers, not geofenced commercial robotaxi.

In the meantime, we can see the preview by monitoring MobilEye's deployment of geofenced L4 robotaxis testing in some cities worldwide.
 
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Tesla removes fSD before a non-Tesla dealer gets the car. The press covered when that procedure went wrong as the next owner saw clearly that the FSD was not removed:

I can only tell you my experience for the last several weeks of shopping. Go look at the used Tesla inventory--almost all of them come with FSD and I don't think there's much of a mark up on price for them having it.
 
Indeed (and I think this is new) most cars on Tesla used cars have FSD. In fact, too many of them, which suggests Tesla is adding it as a way to get more money from the cars during this period that new cars have a long wait.

This is different from the question of whether Tesla pays you more on your trade-in if it has FSD or not. That I don't know. Whether a car for sale used from Tesla has little to do with whether the car had FSD when it came in, other than perhaps the question of whether it had HW3 or not when it came in.

We would need more data to figure out what's going on.
Yes--the entire used inventory seems to have FSD. That's been my experience when shopping for the past few weeks.
 
Current MobilEye commercial L4 costs around $10's thousand.

2024/2025 Future competition: MobilEye Consumer L4 that drives "everywhere" with the car manufacturer cost <$5K, and it can have an MSRP of $10,000 for consumers.


1641600218243.png



Cost reduction will be possible by reducing the numbers of LIDAR down to one for the front only and using Software-Defined Imaging Radars for the rest of the 360-degree coverage.

I think MobilEye Software-Defined Imaging Radar is like 4D-radar that can yield more info such as an object's speed, direction, depth, and elevation:

It can simulate as if it's LIDAR:

6hsRSbR.jpg


The picture below is not from a camera. It comes from Software-Define Imaging Radar:

dTmI6mK.jpg



This is not about the current FSD beta that requires hands-on steering, or you'll be expelled from the program.

This is about 2025 L4 driving everywhere for consumers, not geofenced commercial robotaxi.

In the meantime, we can see the preview by monitoring MobilEye's deployment of geofenced L4 robotaxis testing in some cities worldwide.
Free market competition and the application of different sensors and approaches is healthy. It may yield multiple options for a general solution from different players.

Once delivered (and any time frames they provide are dubious), I'd like to see neutral, real-world competitions between them that involve long distances, cities, freeways, rural, mountains, etc. I would expect the scoring to show significant differences in their capabilities AND costs.
 
...resale price...
According to the article, the uptake goes down but interestingly, it seems to go up for Tesla's used webpage.

I counted about 57 FSD out of 64 Tesla Model S used cars in my area. That's 89%.

I think a few years back, I noticed that the majority listed did not have FSD.

Statistically, that doesn't make sense. When most people buy new cars without FSD, when they are posted as used, it should show that very few have FSD.

Does that mean Tesla put on FSDs for those used cars that did not have them before instead of removing them on its used car page?

Is it because FSD is so popular, or is it because FSD has very low uptake, so it wants to boost it up?
 
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