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FSD on a trial basis? Or as a monthly leased service?

Discussion in 'Autopilot & Autonomous/FSD' started by AquaMan, Jul 24, 2020.

  1. AquaMan

    AquaMan Member

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    As a Model 3 owner who's happy with Autopilot and unwilling to pay the big price for FSD, I would certainly pay perhaps $350 to try it for a month, and if I fall in love I might even pay the bigger amount to keep it, or even "lease" it as a service for $350 per month.

    Granted, if I own the car for more than 2 years I'll end up paying more, and if it's sold in this format FSD wouldn't be transferable to a new owner, so it wouldn't affect resale value and the next owner might do the same. They could end up making MORE money over time over the lifetime of the car.

    As things stand, Tesla won't get any more money from me. But if they did this, they'd get something, and it would be almost entirely profit. Seems to me they're leaving money on the table by not doing this.

    And as FSD gets better, Tesla would even have a right to increase the monthly rate at any time, which I would be free to accept or decline.

    Has Elon ever spoken of such an arrangement?
     
  2. MP3Mike

    MP3Mike Well-Known Member

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    Yes, they have said that FSD subscriptions will likely be coming around the end of this year. (No pricing info was shared other than it will be more than purchasing it.)
     
  3. AquaMan

    AquaMan Member

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    Great!

    In case they're listening (they're not) I'd go as much as $350US on a monthly basis (and I'd probably only do a one month trial at that price), or I would commit to a year at around ~$175 per month, as long as if I sell the car the remainder of the time would transfer with the car.

    It could also be sold on a per-mile basis. That might even be more enticing to me.

    If I were Tesla I'd also sell all cars with the first month FSD included, just as they often do with XM radio. If it's good, the trial would result in sales or subscriptions.
     
    • Like x 1
  4. MP3Mike

    MP3Mike Well-Known Member

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    You're one of the first that I have seen that has reasonable price expectations. My guess is around $225/month with a 12 month commitment, or around $325/month for a month-to-month subscription.

    They have done FSD trials on the past, so I would expect that to happen again once it goes "feature complete."
     
  5. AquaMan

    AquaMan Member

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    It might sell at that price, but I probably wouldn't be a buyer after the first month.

    Since it has nearly zero cost (after huge development overhead of course) I think my prices would result in greater sales dollars overall.

    I still feel I need to closely supervise regular Autopilot on a straight well-marked freeway. It would be a whole different world if I could safely text from the driver's seat, but that's just not the case. Until they make the cars better than people at handling squirrels running across the road or a tire blowout from an adjacent car, it's more "cool factor" than convenient as far as I'm concerned.
     
    • Like x 2
  6. emmz0r

    emmz0r Senior Software Engineer

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    If Tesla cracks it, the others will as well. Then you have competition. This will be expensive for a short time ,and as a function of competition, supply and demand they have to drop the price.
     
  7. AquaMan

    AquaMan Member

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    Right now it works well enough to be cool and add some convenience. So that has value. When it does more, it will have more value.
     
  8. emmz0r

    emmz0r Senior Software Engineer

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    and as time goes by it would be considered standard, and what people expect, like air condition.
     
  9. whttiger25

    whttiger25 Member

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    I think that Tesla would have offered it as a subscription a long time ago if the product would live up to expectations, but the FSD product, as it is now, is certainly not worth what Tesla wants to charge for it. So they must sell it as a package with a promise of future updates to justify the cost. As a subscription, the cost can't be justified, because you could just cancel and subscribe when the features are actually there.
     
    • Like x 2
  10. Hovscorpion1

    Hovscorpion1 Member

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    I found a blog about a guy who talks about the FSD subscription model.

    Tesla will be releasing a monthly subscription at the end of the year, however we're unaware of the finer details. Elon did state that it would be an option as part of the 72 month Loan (if you chose to finance) or part of the 36 month lease.

    How will Tesla’s FSD subscription service play out?
     
  11. Hovscorpion1

    Hovscorpion1 Member

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    If I may ask, where you all got your prices? FSD Costs $8,000. A twelve month commitment with $225 is $2,700. At $8,000, a 1 year commitment is $666.
     
  12. AquaMan

    AquaMan Member

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    #12 AquaMan, Aug 4, 2020
    Last edited: Aug 4, 2020
    The fact is we're guessing, but there's logic to it.

    1) If we treat Tesla's price of $8,000 as its "value" as a permanent feature, and if we assume that a car lasts a typical 8 years that's $1,000 per year, or per $83.33 month. But if that was the monthly price, a person would be foolish to spend $8,000 up-front if they could instead spend $83 per month for 8 years. (The same person could earn interest on the $7916.67 they would have been out for the first month, etc.) Therefore, the monthly price cannot be lower than $83.33 unless they're only selling the $8,000 package to people who think their Tesla will last a lot longer than average.

    2) Just as it's better to keep money in your control longer, it's also better for a company to get more money up-front. Money is always more useful the sooner you have control of it. That's why a single can of soda costs far more than 1/6th of a 6-pack. The difference between a-la-carte pricing and "bulk" pricing is often very substantial. If the monthly pricing is too low, nobody would spend the $8K. If it's too high, you'll get no monthly sales. Since we're talking about roughly an 8 year lifespan, (96 months) I can see the 1-month pricing being several times higher than the "whole price divided by 8 years".

    3) I also consider how much I'd be willing to pay as a consumer. In other words; "how bad I want it." All companies want to sell their products/services for as much as possible. For me the first "experimental" month is pretty valuable, because it would satisfy my curiosity with less commitment. So for a first month I'd go a little above $300. For the 2nd through 12th months, (if I want to keep it) I'd prefer to pay for a 1-year commitment so I would end up paying less over the next year. $300 per month is too much on an annual basis, because that would mean I'd pay the whole $8000 in just over 2 years and I wouldn't have the benefit of increased resale value. $175 seems more realistic, to me.

    Note that a monthly service has small advantage people may not consider: Since it's not a "part of the car" you would avoid sales tax (use tax) on the $8.000.

    Pricing is ideal when a substantial number of consumers still choose to buy up-front, but Tesla still attracts buyers of a monthly or annual service from those who aren't willing to make the full commitment for FSD.

    P.S. We all love our cars, but people tend to forget they WILL stop owning their car eventually. That's probably going to happen long before it's no longer worth repair/maintenance cost, or when someone smashes it, or when you just find something else you like better. (Heck, I might sell my Model 3 once my Cybertruck order comes through.) Teslas may be low maintenance cars, but seats will tear, glass will get chips, curb rash will happen, suspension will get soft, and the big one... expensive batteries that don't last forever. Even Teslas age, and improvements will be made in new designs.
     
  13. SilverString

    SilverString Member

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    I would like to see it happen. I enjoy having it but I’m not sure I would pay for it on another car if I could simply lease it for a month while on vacation or something.
     
  14. drtimhill

    drtimhill Active Member

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    The problem with all these schemes is, I suspect, they dont make financial sense for Tesla. I dont know the percentage of cars that have FSD, but I'm sure they have crunched the numbers to figure out different sales models for FSD. How long would someone renting it keep paying for it? Are people going to rent it for one month just for an annual road trip? If they can't find a rental model that yields more $$ than the current model, why would they offer it?

    And they also have to consider all the drivers who HAVE paid up-front for FSD. Some of the suggested prices in this thread would NOT please existing FSD owners, who have basically paid for something Tesla have still not delivered. To have Tesla offer FSD for much less (in real terms) before the early adopters have even seen a decent FSD release would (while not technically illegal or anything) certainly create a LOT of bad feeling amongst the existing customer base. And remember, the FSD buyers are typically the well-heeled ones buying the more expensive models and trims .. precisely the customers Tesla should want to keep happy.
     
  15. whttiger25

    whttiger25 Member

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    Why doesn't it make financial sense for Tesla? Because the value is not there currently for the consumer. Everyone paying $7000-$8000 now has either been tricked (if they paid monthly they'd cancel) or is holding out in hope for future benefits (they would wait to subscribe until those benefits are available). Either way, the subscription option will cannibalize demand for the up front option, and result in fewer people sticking with the subscription after they try it as well.
     
  16. drtimhill

    drtimhill Active Member

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    You just answered your own question.
     
  17. AquaMan

    AquaMan Member

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    I know this: They got no money from me for FSD, but if there was a monthly or annual option, they'd have gotten something. Since the development costs are spent anyway, it would be almost 100% spendable gravy.

    Would it cannibalize the $8,000 purchase? Maybe, but only if it's not worth having permanently at a price of $8,000.

    Right now, the majority of people buying it are buying blind, at the time of initial purchase. They've never tried FSD, and its future features are uncertain.

    It's not as if it's too late for any of us to buy it outright after the initial sale. Most simply aren't willing to pay for it at that price EXCEPT when they're making their initial purchase. My Dad paid for it, against my advice, purely out of fear of missing out when he bought his Model Y. He's new to the car so he's still trying not to regret his purchase, but he's never driven a Tesla with just Autopilot, and that's really all he uses.

    Personally, I think my car will be crushed into a cube of metal years before it's a viable robotaxi!

    Question: If I had bought it with my car, I believe I'd pay sales tax ("use tax") on the entire purchase including FSD. (Unless I'm wrong.) But if that's true, and I instead bought it now, after the sale for the same price to have it permanently, would I owe sales tax on it, or is it sold as a "service" with no sales tax? If it would be treated differently, tax-wise, then I'd say NOBODY should buy it with the car. They'd be better off waiting until registration is paid for, and buy it later to save the tax. (I'm in California.)
     
  18. whttiger25

    whttiger25 Member

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    Nope. How many people who would have paid the $8000 try the monthly option instead, and immediately cancel after they realize the features aren't there? I'm thinking that would offset the increase from customers like youl
     
  19. drtimhill

    drtimhill Active Member

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    Exactly. Tesla will have crunched the numbers every way they can think of, and (for the time being), they are sticking with the one-time purchase plan. Let's face it, this thread is really about lowering the price of FSD one way or another, which appeals to those who do not have FSD and doesnt to those who already have it. And really this comes down to how much value-add Tesla can deliver within FSD down the road:

    -- FSD is amazing and blows everyones mind. If they mange to deliver a true FSD (whatever that means) with spectacular features, they will be far enough ahead of the competition to maintain a high price point. I don't see any "rental" model turning up unless it commands a really premium price.

    -- FSD just ends up with a few extra add-ons (like stop lights) and stalls out. In this case, Tesla will basically wipe out all those who have paid $$$ up-front (and eat the bad PR), and will indeed probably offer FSD for some lowish rental point. But with such a weak feature set compared to EAP, would people even bother renting?
     
  20. boonedocks

    boonedocks Active Member

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    Having paid for FSD on 2 Model S' and an X I know why Tesla will NOT be offering a "free test drive" of the feature in hopes of getting people to buy in to it.

    I still can't safely use Navigate on Autopilot for my daily commutes as it acts like a skittish new driver trying to merge and change lanes and interstate transitions. If there was no traffic it would be a dream, as is people see the blinker and purposely cut my car off from changing lanes. I have never had a successful NAV drive except during the complete stay at home order during the early days of COVD-19 and I had to go in to the office on an emergency. Otherwise....completely useless. As for the automatic lane change on blinker feature....I still have to wait and coax it at the right time so the FSD feature as a whole is quite useless / worthless at this time.

    I have high hopes for L3 for my daily commute...one day anyway...and maybe my car will only have to pass my hwy transitions several times a week and do a overpass U-Turn or just ride in the slow lane the entire 47 mile commute.
     

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