Elon: FSD Beta tweets

[JulienW]

For some Tesla is their insurance company, and as FSD evolves more and more people will have Tesla insurance. So it remains to be seen how Tesla will leverage that.....

This is 100% simple. Insurance companies base their rates on actuarial tables. If a self driving L4 system produces fewer accidents with lower claims cost then you will receive lower rates. Insurance companies have no passion or concern about the systems involved and ONLY care about the costs associated. Lower costs to the insurance compony = lower premiums and higher profit.

 

[GSP]

they'll eventually be compelled to address the folks they sold FSD to prior to ~march 2019- to whom they explicitly sold a system that is at minimum L4.

……. L5 is already legal right now in half a dozen US states.

Good point about Tesla selling cars as capeable of “L4/5” with a future software update.

As for L5 already being legal, I will contend that only L4 exists today. I interpret the SAE/DOT L5 definition to require an L5 system to be capable of operating on any road, in any weather, or any traffic condition, that a human driver could successfully navigate.

GSP

 

[phonetele226]

For some Tesla is their insurance company, and as FSD evolves more and more people will have Tesla insurance. So it remains to be seen how Tesla will leverage that.

I don't feel as if Tesla is going to be a market leader (globally) when it comes to L3/L4, and instead they're going to be a less restricted L2 drivers aid. The capabilities of which will vary depending on regulations of the region its operated in. Like Europe will typically be more locked down for functionality allowed under L2.

Hopefully the US straightens out the liability problem in the US before we get too far behind other countries. We're already technically behind Germany with L3.

The problem Tesla is going to have is lack of income coming in to support the FSD program. FSD is priced too high for its current functionality whether its the one time amount or the subscription amount. So all the FSD efforts will have to be paid through revenue for the cars themselves.

As long as Tesla keeps raising prices and removing content they will have plenty of funding for FSD.

 

[Daniel in SD]

This is 100% simple. Insurance companies base their rates on actuarial tables. If a self driving L4 system produces fewer accidents with lower claims cost then you will receive lower rates. Insurance companies have no passion or concern about the systems involved and ONLY care about the costs associated. Lower costs to the insurance compony = lower premiums and higher profit.

Claim costs are also a function of coverage limits. The manufacturer will require a much higher coverage limit as they will almost certainly be liable for at-fault collisions.

 

[phonetele226]

This is 100% simple. Insurance companies base their rates on actuarial tables. If a self driving L4 system produces fewer accidents with lower claims cost then you will receive lower rates. Insurance companies have no passion or concern about the systems involved and ONLY care about the costs associated. Lower costs to the insurance compony = lower premiums and higher profit.

Don’t know about that. I can foresee an extra insurance charge being levied for FSD soon since it is not anywhere close to being L5 capable. In time what you propose may happen but for the foreseeable future insurance companies want to mitigate payouts so FSD to them is a liability.

 

[AndrewZ]

I would wonder how you insure a car that can be flipped between these functionalities and with the insurer having no idea how much you drive in Level 4 mode and how much you drive in manual model.

Do you pay a blended rate and then true up monthly based on ratio driven manually and ratio driven in autonomous mode? Do insurers come up with categories to slot you into based on predicted usage of each mode?

Might not be overly difficult but I see some complexity there

 

[JulienW]

I would wonder how you insure a car that can be flipped between these functionalities and with the insurer having no idea how much you drive in Level 4 mode and how much you drive in manual model.

Do you pay a blended rate and then true up monthly based on ratio driven manually and ratio driven in autonomous mode? Do insurers come up with categories to slot you into based on predicted usage of each mode?

Might not be overly difficult but I see some complexity there

They can require monitoring or you pay the FULL human driving rate. They could even adjust the rate by the amount of time you spend human driving vs L4 driving.

 

[Doggydogworld]

The problem Tesla is going to have is lack of income coming in to support the FSD program. FSD is priced too high for its current functionality whether its the one time amount or the subscription amount. So all the FSD efforts will have to be paid through revenue for the cars themselves.

No worries there. I think it was PT Barnum who said "There's an FSD customer born every minute".

 

[phonetele226]

I would wonder how you insure a car that can be flipped between these functionalities and with the insurer having no idea how much you drive in Level 4 mode and how much you drive in manual model.

Do you pay a blended rate and then true up monthly based on ratio driven manually and ratio driven in autonomous mode? Do insurers come up with categories to slot you into based on predicted usage of each mode?

Might not be overly difficult but I see some complexity there

I can’t see insurance companies coming up with that level of discrimination. Easier to charge you more if you have FSD and less if you don’t. Kind of like them penalizing you for not having snow tires if you live in a winter region. In fact snow tires are mandatory in Quebec and if you get into an accident without them you are not covered.

 

[Dewg]

The problem Tesla is going to have is lack of income coming in to support the FSD program. FSD is priced too high for its current functionality whether its the one time amount or the subscription amount. So all the FSD efforts will have to be paid through revenue for the cars themselves.

There is no reason Telsa can't terminate the FSD costs completely, or make it $500 or $1000. Then raise the cost of all cars by $2500-5000, which would replace that revenue easily.

The downside is that Tesla cannot realize all the FSD funds, which makes the accounting a little more difficult with baking in the FSD funds into the price of the car.

 

[phonetele226]

There is no reason Telsa can't terminate the FSD costs completely, or make it $500 or $1000. Then raise the cost of all cars by $2500-5000, which would replace that revenue easily.

The downside is that Tesla cannot realize all the FSD funds, which makes the accounting a little more difficult with baking in the FSD funds into the price of the car.

As the take rate for FSD continues to drop when people see it not being worth the money it is indeed possible for Tesla to make it standard and raise the car price to make up for it. Wait for it to happen.

 

[Knightshade]

As for L5 already being legal, I will contend that only L4 exists today.

Yes but that's a totally separate issue.

The point was you can't use "but the regulators!" as an excuse not to deliver an L5 car, because it's already regulatorily legal to do so TODAY.

The reason nobody has delivered one is as you say, nobody has a working one. As soon as someone does they could immediately put them on the road in the states where it's already legal.

The downside is that Tesla cannot realize all the FSD funds, which makes the accounting a little more difficult with baking in the FSD funds into the price of the car.

That's a significant part of why they changed the sales description of FSD in March 2019. That new product only promises L2 driving, and they can fully recognize 100% of that (and all future) revenue from FSD once the city streets code goes to wide release.

Also an upside of the subscription for them, as they always get to recognize 100% of that immediately since the monthly fee explicitly only includes whatever is in the current software that month with no additional, undelivered, promises.

 

[Supcom]

I can’t see insurance companies coming up with that level of discrimination. Easier to charge you more if you have FSD and less if you don’t. Kind of like them penalizing you for not having snow tires if you live in a winter region. In fact snow tires are mandatory in Quebec and if you get into an accident without them you are not covered.

Or, more likely, to charge less for cars equipped with FSD. Ultimately, it comes down to loss experience across the fleet.

 

[AndrewZ]

I can’t see insurance companies coming up with that level of discrimination. Easier to charge you more if you have FSD and less if you don’t. Kind of like them penalizing you for not having snow tires if you live in a winter region. In fact snow tires are mandatory in Quebec and if you get into an accident without them you are not covered.

A consumer vehicle operating in Level 4+ shouldn't even need owner insurance by definition right? That's where I see the complexity.

If you own a vehicle capable of switching between these modes, you're sitting in the driver's seat and flip the vehicle into Level 4 mode and the autonomous software takes over the driving task, the manufacturer owns the system's actions while active and all the risk associated with that.

You'd need insurance only for the times when you're driving manually, however much that is. When FSD is active as Level 4+, Tesla owns the DDT.

 

[momo3605]

A consumer vehicle operating in Level 4+ shouldn't even need owner insurance by definition right? That's where I see the complexity.

If you own a vehicle capable of switching between these modes, you're sitting in the driver's seat and flip the vehicle into Level 4 mode and the autonomous software takes over the driving task, the manufacturer owns the system's actions while active and all the risk associated with that.

You'd need insurance only for the times when you're driving manually, however much that is. When FSD is active as Level 4+, Tesla owns the DDT.

I can’t think of all possible cases right now, but you may still need some kind of minimal comprehensive insurance for when you’re parked as well. Someone keying your car, shattering a windows, rodents chewing on wiring, hail/fire/flood damage

 

[Supcom]

I can’t think of all possible cases right now, but you may still need some kind of minimal comprehensive insurance for when you’re parked as well. Someone keying your car, shattering a windows, rodents chewing on wiring, hail/fire/flood damage

You will need comprehensive and should also have uninsured motorist coverage. You will still need liability and collision insurance for accidents that may not be AV-related. Say you don't torque your lug nuts properly and a wheel falls off, causing your car to skid into another car.

 

[Goose66]

This "liability problem" is totally made up for ignorant news people. Liability for damages in an accident being apportioned between driver and car manufacturer based on each's contribution to the cause of the accident has been a thing since automobiles were manufactured. FSD is no different than cruise control or seatbelt function in that regard.

Now if legislatures keen on "taking on the issue" want to create new liability for car manufacturers selling these systems outside the normal car manufacturer liability caselaw, then it could very well become a "problem."

BTW, an automobile insurance company doesn't "assume liability" for any car malfunction or driver error.

 

[AndrewZ]

This "liability problem" is totally made up for ignorant news people. Liability for damages in an accident being apportioned between driver and car manufacturer based on each's contribution to the cause of the accident has been a thing since automobiles were manufactured. FSD is no different than cruise control or seatbelt function in that regard.

BTW, an automobile insurance company doesn't "assume liability" for any car malfunction or driver error.

FSD in its current form is no different than cruise control or seatbelt function, a Level 3+ system operating within its OEDR is a different story.

I'm not aware of any "liability problem" though in the way you're spinning it, everything in terms of liability seems quite clear. You don't own the driving task when using a Level 3+ system within its OEDR, something Level 4+ might not even have a steering wheel or pedals. It's like hopping in a Waymo or Cruise except you own the vehicle itself, but you aren't responsible for what the vehicle does when the system is operating.

The only problem I see is the manufacturer feeling comfortable taking on the risk, which would be why Tesla needs the system showing levels of safety/reliability far in excess of human drivers. If FSD was merely as good as the average human driver and all accidents were now owned by Tesla, I think they'd have a bad time.

 

[phonetele226]

FSD in its current form is no different than cruise control or seatbelt function, a Level 3+ system operating within its OEDR is a different story.

I'm not aware of any "liability problem" though in the way you're spinning it, everything in terms of liability seems quite clear. You don't own the driving task when using a Level 3+ system within its OEDR, something Level 4+ might not even have a steering wheel or pedals. It's like hopping in a Waymo or Cruise except you own the vehicle itself, but you aren't responsible for what the vehicle does when the system is operating.

The only problem I see is the manufacturer feeling comfortable taking on the risk, which would be why Tesla needs the system showing levels of safety/reliability far in excess of human drivers. If FSD was merely as good as the average human driver and all accidents were now owned by Tesla, I think they'd have a bad time.

All of this is idle chatter. You won’t see Tesla achieving L3 or L4 for years in spite of Musks announcements. And Tesla will never own up to liability because of FSD capabilities.

 

[boonedocks]

Exactly - that why I don't think Tesla will ever get to L3 and take liability - unless they are compelled to by regulations or competition. People who continuously demand L3 on freeways (apparently instead of city FSD Beta) will not get their wish come true for a long time ...

And the REASON I did NOT buy it a 4th time!!!! 95% of my driving is freeway.


I would pay for FSD if I even had a 50/50 bet that it would be Level 3 but I will probably be 3 new cars in by then!!