Knightshade
Well-Known Member
Not unless the full price take rate is crazy low it won't (and evidence suggests it's not)
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FSD Subscription
- Thread starter Ccmun
- Start date
Not unless the full price take rate is crazy low it won't (and evidence suggests it's not)
The FSD pricing is way easier at predicting than what's going happen with this question.
This question is difficult for a number of factors
- In the US market Tesla started to ship HW3 computers with Model 3's, and then ran into supply issues. So they went back to shipping HW 2.5 computers on vehicles purchased without FSD. So people who thought they were going to get HW3 without buying FSD actually ended up with HW2.5. People that didn't order FSD might have HW3 or they might not. Is it really fair to charge someone $2K extra simply because they lost the HW3 lottery? No one really complained that loudly, and we didn't hear much about it. No one seemed to really care about it since they'd get HW3 if they purchased FSD. I think it's also been awhile since Tesla put a HW2.5 computer into a Model 3. So brand new owners don't have to worry about this.
- In the Chinese market Tesla tried to pull the same stunt they did in the US, and the customers put a quick stop to do it.They simply didn't accept that their car would come with an inferior computer, and why should they?
- For quite awhile Tesla advertised that their cars were FSD capable as sold. They didn't say anything about it requiring a HW upgrade until much later on.
The whole FSD subscription model opens up a huge can of worms. There isn't a clear cut-off date to make things nice, and clean.
I don't know if the whole FSD subscription model will ever see the light of day. It's dependent the FSD experience being worth >$100 a month at a bare minimum. And, if we're really being honest it needs to be in the $200/month range to really make sense financially for Tesla. To the point where they can eat the cost of doing the HW3 upgrade when a customer commits to one year or more.
Tesla does have incentive to upgrade the fleet to HW3 to have a constant stream of monthly revenue associated with FSD.
As I understand it Tesla doesn't even a plan on offering it till late this year. So maybe by then more pieces of puzzle will come together.
Right now it's this puzzle with pieces that don't seem to come together.
I wonder what the FSD take rate is for an average brand new Tesla coming off the line.
Before HW3 there were a number of factors that increased the take rate for FSD. Where I saw numbers as close to 40% (from an Electrek Poll). What drove my decision was FSD was only $3K more than EAP, and it came with the HW3 upgrade promise. So for me it was a pretty easy decision. For others Tesla did the FSD fire sale that allowed them to get it for like $2K on top of EAP.
But, for new buyers who are going to get basic AP + HW3 with the base vehicle then what's to motivate them to get FSD? Plus FSD is a much higher percentage of the cost for a Model 3/Y than a Model S.
So I can't see the take rate for a newer Model 3 being much higher than 10-20% which is far lower than the 40% estimate.
We could do a poll, but numbers will skew higher on an enthusiast website.
willow_hiller
Well-Known Member
At least according to Troy's Model 3 order tracking spreadsheet: Model 3 Order Tracking Spreadsheet
For vehicles configured after April 1, 2019:
1,732 configured with base Autopilot
1,183 configured with Full Self-Driving
25 Non-responses
So at least in that sample, about 40% take rate. And as you said, it will probably be biased up a bit since Troy shares the spreadsheet here and on other Tesla social media sites.
That's much higher than I predicted.
So how about the AFTER covid-19 take rate when people are more careful with their $$'s.
willow_hiller
Well-Known Member
That's much higher than I predicted.
So how about the AFTER covid-19 take rate when people are more careful with their $$'s.
Alright. First US Covid case was reported mid-January, so I took everything since Feb 1 for a decent sample size.
180 configured with Autopilot
72 configured with FSD
Makes for a 29% take rate in that sample.
EDIT: Real quick chart over time. It looks like the decreased take rate from the above may have been due to the price increase in late 2019? Other than that, it actually looks like the FSD take rate is slowly increasing into 2020:
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I think the take rate would also hinge on what Tesla actually delivers down the line in terms of FSD . As for a subscription model, IMO, it can be successful for the mere fact that not everyone cares for full FSD, but only certain features. A purchaser interested in summon, autopark, or just NOA, can choose to subscribe and not have to commit to owning or making a fixed amount of payments. At worst, if they're coming from an older car, they may have to eat the cost of a 2.5 to 3.0 HW upgrade, cause realistically, I don't see Tesla giving away HW 3.0. But, they'll be able to back out whenever they want and return when things seem more favorable.
Garlan Garner
Banned
A subscription is a rental. Just like renting a house or apartment. The value of rentals can only be enjoyed at the moment. In other words.....rentals cant be sold.
Purchases "CAN" be sold. There is a value to a purchase when you sell the car.
If Elon is correct in that FSD is going to be worth far more in the future....then you won't have to worry about selling the car with FSD included.
It could be that in the future FSD might help sell Teslas that include the feature.
Knightshade
Well-Known Member
Unless of course you're renting with an option to buy. Which is often (thought not always) a thing.
Depending how Tesla prices/structures this it might make sense to offer that (at a higher total cost than if you'd bought in full up front)
Yup... and with a take rate at either ~30 or ~40 percent, something like $100 mo and allowing people to drop in/out of the program month to month makes zero financial sense
So either it'd have to be a MUCH higher monthly rate- or it'd have to lock you into the subscription for at least 3-5 years.
Just want to add to the $10 a month FSD subscription for those who really want it. Here’s what it’ll look like.
Being FULL FSD... you will now be able to spend $10 a month for a subscription, but your screen and sound system will be locked on to viewing ads constantly. The car will pull over if it caches you on the in car camera watching the road or your own phone, or blocking the camera... and no sleeping allowed!
Also, navigation will periodically take you to stores you hadn’t planned on going to, then park there for an hour.
Being FULL FSD... you will now be able to spend $10 a month for a subscription, but your screen and sound system will be locked on to viewing ads constantly. The car will pull over if it caches you on the in car camera watching the road or your own phone, or blocking the camera... and no sleeping allowed!
Also, navigation will periodically take you to stores you hadn’t planned on going to, then park there for an hour.
CertLive
Member
I guess I am only going on what I have observed talking to other Tesla drivers, mostly at the charging points. I think 1 in 7 had FSD and one down my road has that in between on an X, I cant remember the extended autopilot option that is no more. I mean the reason why I did not buy FSD after the first days of ownership as planned to review was because I had the new car experience robbed from me being given a car with a lot of issues. I have a list of outstanding issues and my drivers side door creaks like an old car on open and close. Objectively if Tesla were to compensate me for my lost experience with a software unlock I am game. Otherwise I feel a cheaper subscription and more of a focus on quality of product would be a better idea and give people more confidence to invest in the future. Hell unless the stock price is too high of course...
If'n I was in charge at Tesla, which thankfully for everyone else I'm not, I would take a page out of the Cell Phone Industry and provide an interest-free FSD loan. Just like some cell service companies offer when buying a new cell phone.
I would probably start it at 5 years, and it would be as if you paid cash upfront. I would probably include a 10% upcharge for paying via this method to cover "loan-payoff insurance" in case you total your car, so as to keep any Tesla buyers from needing to pay for FSD, and no longer having the Tesla.
People who voluntarily sold their Tesla would need to make sure their sale price covers the FSD payoff, though.
Buying right now would cost $128.33/month, after FSD jumps to $8000, it would be $146.66, and so on. Sales tax would be paid upfront and not part of the loan. I would also consider a mandatory down-payment, which would be designed to cover the cost HW upgrades, in case one is due sooner than the loan would cover.
As for actual subscriptions, buying into 1 year or 2 year agreements makes more sense than month to month. Too much potential revenue would be lost as people used it sparingly. I would price subscriptions similarly as above, with the downside that it is a perpetual payment that costs more than a purchase, if you keep it for more than 5 years. The upside is that you can take it with you and have it on your next Tesla. Subscriptions would have to pay for future HW upgrades, or they would be stuck at whatever features they had when they subscribed.
Month to month subscriptions could still work with some tweaks: New subscriptions would be calculated against the current FSD purchase price, so as the price of FSD goes up, so does the subscription price. However the subscription price would be locked in when you start it, and wouldn't change unless you let the subscription lapse. This would be a huge incentive to not cancel your subscription over the winter, for example.
Since both of these plans take into account potential losses, and Tesla can just turn off the FSD for non-payment, there is not much risk and huge upside. It would incentivize people to subscribe sooner than later and keep people from frivolously stopping the subscription.
But that's just me.
I would probably start it at 5 years, and it would be as if you paid cash upfront. I would probably include a 10% upcharge for paying via this method to cover "loan-payoff insurance" in case you total your car, so as to keep any Tesla buyers from needing to pay for FSD, and no longer having the Tesla.
People who voluntarily sold their Tesla would need to make sure their sale price covers the FSD payoff, though.
Buying right now would cost $128.33/month, after FSD jumps to $8000, it would be $146.66, and so on. Sales tax would be paid upfront and not part of the loan. I would also consider a mandatory down-payment, which would be designed to cover the cost HW upgrades, in case one is due sooner than the loan would cover.
As for actual subscriptions, buying into 1 year or 2 year agreements makes more sense than month to month. Too much potential revenue would be lost as people used it sparingly. I would price subscriptions similarly as above, with the downside that it is a perpetual payment that costs more than a purchase, if you keep it for more than 5 years. The upside is that you can take it with you and have it on your next Tesla. Subscriptions would have to pay for future HW upgrades, or they would be stuck at whatever features they had when they subscribed.
Month to month subscriptions could still work with some tweaks: New subscriptions would be calculated against the current FSD purchase price, so as the price of FSD goes up, so does the subscription price. However the subscription price would be locked in when you start it, and wouldn't change unless you let the subscription lapse. This would be a huge incentive to not cancel your subscription over the winter, for example.
Since both of these plans take into account potential losses, and Tesla can just turn off the FSD for non-payment, there is not much risk and huge upside. It would incentivize people to subscribe sooner than later and keep people from frivolously stopping the subscription.
But that's just me.
Tesla is doing that in China, which may be a test to see how it works out before offering it other markets.
prettig
Active Member
Mainly USA buyers...... FSD in other parts of the world (big Tesla markets) is not that easy (in Europe you can forget city driving on FSD for the comming years, EU law and way more complicated conditions, try Paris, Amsterdam, Rome....if you ever been there you understand it).
I bet the numbers will be a lot lower in other regions. Tesla will look at the total picture.
No they won’t.
First of all, companies charge different prices for products/services between different regions all the time. If Tesla made FSD free for the world and charged $15k in the U.S. there’s nothing a US consumer could do except for buy or don’t buy.
They could just lock software by region. Second point, if EU laws are more “complicated” and you can “forget FSD for years“, how can they offer it at all? So you’re saying laws will prohibit FSD while simultaneously saying people “might” buy something that they by law won’t be able to use? That logic makes zero sense. You can’t have it both ways. The trend for ROW has been nerfed features, I doubt that’s changing anytime soon.
Third, you’re talking about YEARS down the line, no one is trying to solve a potential cost concern for that right now. Breakthroughs and pricing could change drastically during that time.
Ha, your post was missing a lot of stuff that was part of the equation.
It didn't include the fact that Tesla was already selling FSD at subscription like pricing with a lease, and that was $100 a month. That marks a good minimum.
It didn't include any kind of estimate for how much FSD was worth when trading it in. This can lower the cost of FSD over 72+ months significantly depending on the resale value of. It's too early to tell how much FSD will be worth when selling the car after 72 months.
It didn't include anything that looked at the consumer side of it. That FSD would have to deliver value that was worth how ever much they were going to charge for it per month. As subscription customers care about the value NOW, and not later like FSD purchasers do.
It didn't incorporate the take rate of FSD. I was pretty surprised that the take rate was so high in the US. The take rate is important when trying to maximize total revenue.
Nevertheless I mostly agreed with the "TLDR anything less than $200/month makes no financial sense for Tesla." summary of it. I think it's closer to $100, but $200 would help maximize eligible vehicles since they could upgrade HW2.5 vehicles which there are a lot of.
prettig
Active Member
No they won’t.
First of all, companies charge different prices for products/services between different regions all the time. If Tesla made FSD free for the world and charged $15k in the U.S. there’s nothing a US consumer could do except for buy or don’t buy.
Second point, if EU laws are more “complicated” and you can “forget FSD for years“, how can they offer it at all? So you’re saying laws will prohibit FSD while simultaneously saying people “might” buy something that they by law won’t be able to use? That logic makes zero sense. You can’t have it both ways. The trend for ROW has been nerfed features, I doubt that’s changing anytime soon.
Third, you’re talking about YEARS down the line, no one is trying to solve a potential cost concern for that right now. Breakthroughs and pricing could change drastically during that time.
It is just an EU law...... (i did not invent these), some things they are just not allowed to do (yet). Just a group of people that decide what the cars are allowed to do.
Just go and try driving on any FSD system in any large european city.......will take years before it will work. Only highway is ok.
First point, yes they could charge different prices. Agreed.
willow_hiller
Well-Known Member
I had a chance to chat with a Tesla sales advisor today, so I thought I would take the opportunity to ask about the FSD subscription. Usual caveats apply, since not all sales advisors know all internal plans, but this is what he told me:
1. The 3 year interest-free loan to China was only offered because many customers configured their vehicles without FSD so they would qualify for the government subsidy. A similar program will not be offered in the US.
2. FSD subscription is still expected toward the end of 2020.
3. He anticipates the FSD subscription will not be rent-to-own, and he thought it would be exactly like Premium Connectivity; (month-to-month, cancel anytime).
1. The 3 year interest-free loan to China was only offered because many customers configured their vehicles without FSD so they would qualify for the government subsidy. A similar program will not be offered in the US.
2. FSD subscription is still expected toward the end of 2020.
3. He anticipates the FSD subscription will not be rent-to-own, and he thought it would be exactly like Premium Connectivity; (month-to-month, cancel anytime).
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Knightshade
Well-Known Member
So... he's randomly guessed with no inside knowledge at all.
That 100% sounds like a Tesla employee
That 100% sounds like a Tesla employee
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