MASTER THREAD: FSD Subscription Available 16 Jul 2021

[Knightshade]

I didn't think Tesla broke out profit numbers for "service" versus other areas

They do.

The Accountant even mentioned specifically the fact they've never made a profit on it recently in the Investor roundtable thread... additionally Teslas own CFO mentioned that in the Q1 2021 results call, essentialy pointing out they had made the routine loss in this area smaller recently "aided by strength in the used car business, operational improvements in service and additional service revenue opportunities that help absorb fixed overhead""

Essentially they're finally APPROACHING break-even on service but still not there yet.

but even if they did and it showed losses (no profit), that still wouldn't mean they have a policy against making a profit on service.

I mean-- The CEO literally said they did and I quoted his exact words, but ok.

 

[linux-works]

yeah, commit to a 2 or 3 month min and the hw upgrade is free. bail before then and you pay a percent or all.

that would seem fair.

btw, that means, to me, bring *everything* in the car up to date, in terms of hw and sw and ecu modules. if you 'join' this program, you deserve to drive with current hw as well as sw. in fact, it makes support and devel easier as it puts simpler bounds on the expected and supported hw/sw configs.

 

[Dan D.]

I mean-- The CEO literally said they did and I quoted his exact words, but ok.

The CEO has literally said many things. Some are true, some are wrong, some are lies. Which one was this?

 

[flyingowl]

Mine FSD subscription option disappeared 2 days ago, both app and web account. Strange

 

[Knightshade]

The CEO has literally said many things. Some are true, some are wrong, some are lies. Which one was this?

Did you miss where Teslas public financials verify his claim every year since he claimed it?

 

[CapeOne]

It turned out not to be the case

This is precisely why some are complaining about having to pay for a HW upgrade. When they bought the car, they were specifically told by Tesla that the it had the hardware for FSD. The fact that “it turned out not to be the case” is not the car owner's fault. Tesla was wrong to have made the statement.

 

[CapeOne]

The Accountant even mentioned specifically the fact they've never made a profit on it recently in the Investor roundtable thread... additionally Teslas own CFO mentioned that in the Q1 2021 results call, essentialy pointing out they had made the routine loss in this area smaller recently "aided by strength in the used car business, operational improvements in service and additional service revenue opportunities that help absorb fixed overhead""

Essentially they're finally APPROACHING break-even on service but still not there yet.

I mean-- The CEO literally said they did and I quoted his exact words, but ok.

Once again, not showing a profit in a particular area doesn't mean there is a company policy against it and Musk claiming he is against the idea of it doesn't make it a policy either.

When you find something in writing that shows/states that Tesla has a specific company policy against making a profit on service, please post it here. Until then, I will continue to doubt one exists.

 

[Dan D.]

Tesla has LONG had a policy of not trying to make a profit on service. This isn't the first time they have adjusted downward the cost of a parts swap in line with that.

From a conference call in 2018

Elon Musk
Yeah. Long-term, I would expect service to be a significant revenue item, and to be a positive margin contributor, as it's going to be a function about fleet size…

Deepak Ahuja
And age.

Elon Musk
Yeah, and it's essentially…

Deepak Ahuja
Exactly. And if the car is under warranty now.

Elon Musk
Exactly, we're under warranty. Just like a lot of stuff is under warranty. But as the warranty expires, so there is like non-warranty items then we'd expect service to positive gross margin.

 

[Knightshade]

Once again, not showing a profit in a particular area doesn't mean there is a company policy against it and Musk claiming he is against the idea of it doesn't make it a policy either.

When you find something in writing that shows/states that Tesla has a specific company policy against making a profit on service, please post it here. Until then, I will continue to doubt one exists.

I cited the CEO stating it was the policy of the company he runs.

Then cited the financials going back to the founding of the company that shows that policy has been following.

Clearly there is literally no amount of evidence that will convince you of these facts, but that doesn't stop them from being facts.


But if you ALSO want something IN WRITING here you go:

https://forums.tesla.com/discussion/51099/got-this-email-on-friday-from-elon

Tesla intentionally operates its service centers at break-even. We don't believe in profiting off our product if it is not working.

Some reddit stuff

Handily enough- ANOTHER reddit thread explains this misunderstanding-

https://www.reddit.com/r/teslamotors/comments/9rdfk9

Service revenue includes sale of used cars, which the letter says is the main contributor to rise in revenue.

As to the actual out-of-warranty stuff... gross and net are different measures. Gross is your profit BEFORE all your costs/expenses are considered.

If he meant net profit on actual service he'd have SAID net, not gross.

 

[Dan D.]

Don't disparage me by misquoting.

 

[SteveD]

Just bought a 21 MY, took
Delivery in June. No FSD. Do I need to have hardware installed, or am I equipped to just download by subscribing?

FWIW- This is exactly what I was hoping for. Summers we drive a lot from MN to northern MN, eastern WI, and MO to visit family. But I would never use FSD on snow covered roads, 8 months of the year, here!

You car should have the HW3 already installed.

 

[CapeOne]

As to the actual out-of-warranty stuff... gross and net are different measures. Gross is your profit BEFORE all your costs/expenses are considered.

If he meant net profit on actual service he'd have SAID net, not gross.

Gross margin is before some costs/expenses but does factor in most key ones which in this case includes cost of providing non-warranty after sales services, direct parts, material and labor, manufacturing overhead, etc. If Tesla expects service and things like non-warranty items to be positive margin contributors, it sure seems to point more to a desirability to have profitability from service than a specific policy against it.

 

[Fourdoor]

I find it a little hard to understand why the bong isn't a standard feature in every HW3 Model 3.

The bong isn't for the driver of that vehicle, but for everyone else on the road.

I can't be the only one sick of people being on their cell phones at a traffic light, and not moving when the light turns green. I don't like honking so I do the inch forward thing hoping that gets their attention.

I am confused here. I do NOT have FSD, but I do get a bong sound when I am first in line at a traffic light and it goes green... am I special?

Keith

 

[Fourdoor]

As has been pointed out, this "hardware" issue has been debated quite a bit in this thread. However, I agree that the Tesla statement you posted was at the very least misleading. If the cars truly "have the hardware needed for full self driving capability", no upgrades (free or otherwise, subscription or otherwise) should be necessary.

Here's the thing... since HW 2.5 can handle EAP without any issues, it may even be able to see stop lights and bong at you when they go green, so the HW 2.5 cars "could" be capable of the "current" FSD suite of capabilities... but Tesla never did the software for that so it isn't going to happen.

Personal opinion of someone with no skin in the game is that Tesla should offer HW 2.5 people subscription EAP and just make them not eligible for subscription FSD... no potential to be sued over cost of a hardware update if you don't offer them the FSD subscription service.

Keith

 

[Fourdoor]

Do you have any factual basis for your doubt? Can you cite anything from Teslas public financial disclosures, 10Q, etc, that suggests service is a profit center for the company?

I ask because to my knowledge of those financials, Tesla service has never made a profit in the entire history of the company- has in fact posted a small loss every year.

Which seems exactly in line with Elons 2013 statement.

I will take your word for it, you usually have good sources.

One of the reasons I am with you on Service Centers not being a profit source is because it explains some problems we have. Without a profit motive we have very few service centers available, and we get wildly varying levels of service at service centers, some are excellent, some suck balls. Lack of a profit motive, leads to the limited availability of service centers, and you are at the mercy of your local service center even if they are one of the ones that sucks balls. I seem to be in luck, people say the Memphis service center is a good one and they did my Homelink install quickly and it works great... but I feel bad for the people who are not as lucky as me.

Keith

 

[Mvp21280]

Does anyone know what's wrong? I took my car in today and got the 3.0 computer so I could subscribe to fsd and after cameras calibrated I'm still unable to subscribe. The car still says to upgrade the hardware. Also I was charged $1500 today when the price was reduced yesterday to $1000. Anyone get a refund yet?

 

[stopcrazypp]

I am confused here. I do NOT have FSD, but I do get a bong sound when I am first in line at a traffic light and it goes green... am I special?

Keith

I have it also, but I had a 3 month FSD trial where I enabled it, so it may have just stuck after trial expired. Some also reported there was a update that enabled it for cars without FSD, even though they weren't supposed to get it.

 

[stopcrazypp]

Here's the thing... since HW 2.5 can handle EAP without any issues, it may even be able to see stop lights and bong at you when they go green, so the HW 2.5 cars "could" be capable of the "current" FSD suite of capabilities... but Tesla never did the software for that so it isn't going to happen.

Personal opinion of someone with no skin in the game is that Tesla should offer HW 2.5 people subscription EAP and just make them not eligible for subscription FSD... no potential to be sued over cost of a hardware update if you don't offer them the FSD subscription service.

Keith

Given they already pushed out the HW installation price, if they make that move now, it would seem to be a deliberate move to spite HW2.5 owners. Some people in that reddit thread suggested similar (just don't offer FSD subscription at all to HW2.5 owners), but that seems like an antagonistic move.

I suggested and still think the best solution is just to offer a minimum term contract with HW3 included for free. Then all sides get what they want (Tesla recoups the hardware costs, HW2.5 owners get HW3 for "free", FSD owners won't be pissed by people being able to do a one month subscription just to get HW3). This same thing can then be applied for HW4.

I don't support however a higher subscription price for HW2.5 owners. That has problems both ways: set the price too low and the HW costs aren't recouped (and FSD owners would be pissed at people doing a one month subscription), set it too high and it makes it so ongoing costs are too high for HW2.5 owners.

 

[Knightshade]

Does anyone know what's wrong? I took my car in today and got the 3.0 computer so I could subscribe to fsd and after cameras calibrated I'm still unable to subscribe. The car still says to upgrade the hardware. Also I was charged $1500 today when the price was reduced yesterday to $1000. Anyone get a refund yet?

I'd bet money the issue is same as it usually is with this stuff.

Tesla back-end IT is terrible

Whatever system checks if you need a HW upgrade before offering the subscription hasn't been updated with the info you have HW3 now.

So THAT system still thinks you need to upgrade.


Hell there's still people who post here with issues because they've had their car for a week but Teslas back-end system still doesn't have the vehicle marked as delivered so a bunch of car and app features don't work right.


That's Tesla in a nutshell.

Brilliant engineers. No idea how to business.

 

[stopcrazypp]

Does anyone know what's wrong? I took my car in today and got the 3.0 computer so I could subscribe to fsd and after cameras calibrated I'm still unable to subscribe. The car still says to upgrade the hardware. Also I was charged $1500 today when the price was reduced yesterday to $1000. Anyone get a refund yet?

Did you reboot the car? Sometimes things don't stick until you do so. I would restart the app also and log in again. You can contact chat support to get both issues addressed. Tesla have officially said they are giving refunds to those that paid $1500.