Model 3 FSD Conspiracy Theory

[MXWing]

It affects S and X owners of course but not to the scale of Model 3 owners.

Some FSD features are good to go. Tesla could release them but won’t due to the capex and opex of doing so.

Any features that use HW3 would infuriate HW2 and HW2.5 owners that paid for FSD.

There’s no new sales or revenue to retrofit older cars. Nothing but expenses and a distraction to the next shiny things - GF3 and Model Y.

And no - it doesn’t matter if it’s “paid” for or not. That money already spent.

My line of thinking is predicated with how Tesla has handled things like

1.) Referral rewards. Picture in space, Model 3 forged wheels?
2.) Tesla expending the same energy to install spoilers for 75K Model 3 first adopters as OJ is spending to find the “real killers.”

Service is also overloaded. Adding retrofits to the list of hundreds of thousands of people calling in isn’t going to relieve support pressure.

I’m not overly upset at my theory because I know ANY company would be doing the same if they were Tesla.

 

[T3SLAROD]

The aftermarket just needs to catch up.... problem solved

 

[TGordon]

That theory falls apart entirely when you account for the fact that most of the money paid for FSD has NOT been spent. It's been banked since the features aren't available yet. Tesla has a huge incentive to deploy self-driving tech. But is the world ready?.

It's more likely that FSD is working pretty good...mostly. It can't randomly abort in the middle of a complicated roundabout or under unusual road conditions. Tesla is a slave to that last .99999 percent, and I really doubt they have it nailed down to 98% yet.

 

[MXWing]

That theory falls apart entirely when you account for the fact that most of the money paid for FSD has NOT been spent. It's been banked since the features aren't available yet. Tesla has a huge incentive to deploy self-driving tech. But is the world ready?.

It's more likely that FSD is working pretty good...mostly. It can't randomly abort in the middle of a complicated roundabout or under unusual road conditions. Tesla is a slave to that last .99999 percent, and I really doubt they have it nailed down to 98% yet.

Tesla has to keep reserves in the bank. Its 6 on one hand and half a dozen on the other when it comes spending money “elsewhere” and NOT spending on FSD for owners.

The point is we are not getting it.

An easy question is why hasn’t Tesla started retrofits now? Just do it in a transparent manner such as order of those who paid for FSD in each region.

Getting 100K cars done now saves 100K cars in the future to do.

 

[ucmndd]

While I agree they have zero incentive or capacity to start AP computer retrofits right now, I seriously doubt they have software ready they’re purposely holding back. They can barely make the stuff already in production work. Look no farther than the “Enhanced summon” release (or lack thereof) to get an idea of current capability.

 

[RobDickinson]

I know someone who runs a large 3rd party tesla inventory tacking site anbd he says the percentage of cars that have paid FSD is quite low.

I seriously doubt this is an issue.

 

[pscarroll]

Careful about criticizing Tesla on this forum, they can do no wrong here.

 

[KenC]

My layman's understanding of accounting is that revenue generated by FSD, should be "deferred", that is deferred revenue recognition, if that feature is not yet delivered. So, the incentive should be to deliver as soon as possible.

And along those lines, software updates should also mean that some part of a Tesla's price should be deferred over the useful life of the car, and pro-rated on a quarterly basis. That's what Apple had to do with iPhone revenue recognition when they started releasing regular iOS updates.

 

[EVNow]

My layman's understanding of accounting is that revenue generated by FSD, should be "deferred", that is deferred revenue recognition, if that feature is not yet delivered. So, the incentive should be to deliver as soon as possible.

And along those lines, software updates should also mean that some part of a Tesla's price should be deferred over the useful life of the car, and pro-rated on a quarterly basis. That's what Apple had to do with iPhone revenue recognition when they started releasing regular iOS updates.

Yes, that’s what Tesla does. OP’s theory, like most conspiracy theories, is obviously wrong.

 

[KJD]

It affects S and X owners of course but not to the scale of Model 3 owners.
Some FSD features are good to go. Tesla could release them but won’t due to the capex and opex of doing so.

Not sure about that. I really think that if they had anything that was good to go, they would release it right now.

Have you noticed that no one is talking about a Tesla driving coast to coast unassisted using only FSD ?

Tesla hardware is the best there is on the market today. Tesla software like FSD not so good.

 

[electronblue]

That theory falls apart entirely when you account for the fact that most of the money paid for FSD has NOT been spent. It's been banked since the features aren't available yet. Tesla has a huge incentive to deploy self-driving tech. But is the world ready?.

It's more likely that FSD is working pretty good...mostly. It can't randomly abort in the middle of a complicated roundabout or under unusual road conditions. Tesla is a slave to that last .99999 percent, and I really doubt they have it nailed down to 98% yet.

I am not sure it is that simple.

While Tesla certainly has an incentive to ship EAP/FSD enabling software and recognize revenue, that is not necessarily true if that process requires retrofitting hardware in addition to shipping the software.

No matter what Tesla has said in the past, the retrofits would likely be a very significant one-time cost as well as a service center burden for a company that seems tbe doing everything they can to save both costs and in service center load. Even if they can offset some of that in the books, the real world time and material will still be there.

The company has been saving in toilet paper latery and denying all sorts of warranty work it used to respect without a question. I may not agree with everything @MXWing says but I do believe retrofit costs do play one part in this equation for Tesla.

 

[sixela]

The company has been saving in toilet paper latery

Those rumours turned out to uninformed, to put it charitably.

 

[electronblue]

Those rumours turned out to uninformed, to put it charitably.

Perhaps but it is not a secret Tesla has been cost-cutting heavily.

 

[sixela]

Revenue recognition is still an important issue, and the cost of retrofits has pretty much been baked into the price of FSD. Rest assure that they're still going to make money -- even with a retrofit, FSD is still a high margin product, with margins higher than the rest of the car. And that's even more so if you don't have to look at sunk costs (the investment already made in developing FSD).

I do expect that the schedule to retrofit HW3 to existing cars may indeed be gated by Service Center availability, but that's a different matter.

I don't expect them to begin that before the FSD firmware is out, though, since then they'd have a cost that would not be offset by the ability to recognize revenue.

 

[TIppy]

Why do we assume that HW3 is going to provide FSD. There may be further hardware refinements before the final solution. It wouldn't make sense to make repeated interim hardware updates.

 

[Daniel in SD]

My conspiracy theory is that beta “automatic driving on city streets” is very dangerous (as Uber, Waymo, and Cruise have discovered) and also likely illegal in many jurisdictions (like CA) if you’re not complying with AV testing regulations.

 

[EVNow]

The company has been saving in toilet paper latery

You flushed your credibility down the toilet with that statement

Literally the answer Musk gave as to how they plan to up their margin was to deliver on FSD features so that more FSD revenue can be recognized. You have to be a tin-foil-hat tesla short to believe otherwise.

 

[EVNow]

My conspiracy theory is that beta “automatic driving on city streets” is very dangerous (as Uber, Waymo, and Cruise have discovered) and also likely illegal in many jurisdictions (like CA) if you’re not complying with AV testing regulations.

That definitely is a conspiracy theory !

 

[EVNow]

I do expect that the schedule to retrofit HW3 to existing cars may indeed be gated by Service Center availability, but that's a different matter.

Yes, they are having difficulties with service and that will play a large role in when the HW3 upgrades will happen. I think the best course for them is to hire some people with lower experience, given them mobile service cars and send them out to upgrade to HW3. They just need to a few of those in every city doing this job for a few months.

I don't expect them to begin that before the FSD firmware is out, though, since then they'd have a cost that would not be offset by the ability to recognize revenue.

This is not correct. They can definitely recognize some revenue to offset the HW3 upgrade cost (as HW3 upgrade is part of what they need to deliver).

 

[TIppy]

This is not correct. They can definitely recognize some revenue to offset the HW3 upgrade cost (as HW3 upgrade is part of what they need to deliver).

How do you know that it is HW3 that they need to deliver? Did they update HW2.0 to HW2.5?