I guess I'll try to explain each of my dislikes since you're asking for valid opinions.
I think Tesla should’ve offered an option with less Autopilot hardware for less than the $49k base. Or they should’ve raised the base price and made Autopilot standard. It leaves a bad taste to take away a feature when the car you bought already has the hardware. If it’s a monthly subscription fee for a modest $25-$50 for server maintenance, improvements and updates, then yes. $6000 is just too much.
I’m sure Tesla already factored in the cost of BOM and included that in our invoice. $6000 goes straight to the bottom line.
Curious to hear your thoughts. Thanks all
The simple answer is that the hardware costs is low enough that they decided it was worth it to install it on every vehicle now for reasons I'll explain further below. A subscription model would not bring the same revenue as a one-time cost, and would devalue it when the majority of the development costs is now, not 10 years from now.
Say $5000, over 8 years is roughly $52/month. Except many customers who might've paid $5000 (like myself) would not want to have it over the whole 8 years but maybe 3 months of the year and that quickly brings the potential revenue to 1/3rd. Then there would be those who sell their vehicle at year 4, and the next owner would not want it at all. So you're looking at only $600 of revenue spread over 4 years vs. $5000 now (especially important due to their money crunch). They'd have to charge something like $100-200/month to get the same level of benefit now which most people would be far less inclined to pay.
Because I think the EAP development cost is already amortized in every Model 3’s sticker price.
Sorry but I’m not convinced Tesla would not want to amortize EAP cost into every Model 3 that ships.
I agree with your assessment but I think it’s a huge gamble for Tesla to not amortize 100% of the cost of EAP into every Model 3 (which is why I think they did), and paying that $6k now is like paying for the same service twice. If there is evidence that the $6k for EAP has no overlap with the sticker price, and represents true development cost that Tesla has chose to absorb until the customer buys in, then I would without a doubt pay up.
I don't know how Tesla budgets their R&D and I'm betting they don't know either lol. A funny joke I've heard is that the R&D engineers there don't know what they're working on for the next until Elon tweets about it.
EAP is an on-going software development cost because additional features of EAP is still being developed right now. Right now all we have is Auto-steer, adaptive cruise etc. Summon was introduced recently, so how do you amortize the on-going software development? Don't answer that because I'm not an accounting major lol.
Feel free to share some valid opinions rather than disagree with every single post I made on this thread.
I think the one thing that is not widely known is WHY Tesla decided to put Autopilot hardware in every single vehicle to increase their BOM/costs. It wasn't to serve the business model that everyone here is discussing. The answer is more complicated, and that answer is simply
Data.
Big Data. Elon made a critical engineering and business decision to say that you could do full automation with simply cameras, ultrasonic sensors and radar which are all relatively cheap compared to the alternative LIDAR that other companies are utilizing in their autonomous vehicle tech.
They felt that could do tackle that problem by applying the latest big data science (machine learning, neural network, AI) to data they capture through the autopilot sensors. The big problem is capturing all the edge cases the vehicle may experience during incidents (thus why the event data recorder has lot of these details upon a crash), and create the appropriate AI response for them. The data pattern they're harvesting will be extremely valuable in the future.
This gives them a huge leg up over other manufacturers as they try to do their own autonomous driving without the expensive LIDAR technology and realize they need that same data that Tesla has already spent the past 3-4 years collecting. One should also bear to mind that Elon hasn't proven that you could do full Level 4 or Level 5 self driving with just those sensors, but only that he believes he can. We'll find out more with time.