Suggestion for Tesla

[jdharrin]

I have a MYLR 30-day delivery window opening Feb. 24, but I'm in a catch 22 situation with it. I want to buy the FSD option, but I live in Virginia, one of many states that charge semi-annual property taxes on vehicles. Virgina will charge me approx. $300 a month on the basic MYLR. If I buy the $10K FSD before delivery, that increase will raise my property tax every six months for perpetuity. So for customers in these states, it's better to buy the basic car and add the FSD afterward. As you know, Elon Musk plans to increase FSD to $12,000 on Jan. 17.

My recommendation is for Tesla to let customers lock in the FSD cost at the rate it is on the day the order is placed, similarly like how the cost of the car is locked in. For customers in states with property tax issues, they get 30 days to buy FSD after delivery before facing any FSD cost increase. Customers shouldn't have to pay one way or another through no fault of their own. Thoughts?

 

[daniel]

So, basically, you want Tesla to give you a way to avoid paying property tax?

"Buy it today because the price will go up tomorrow" is a common (and IMO sleazy) sales tactic.

My own opinion is that while basic AP works wonderfully and does what it promises (I have EAP and I love it, even though I very rarely use more than the basic AP features) FSD is still just a promise. I expect to be ready to trade in my car before FSD is really FSD. When and if they finally release a version that is truly driverless, then and only then will I pay for it. Until I can sit or sleep in the back (i.e. Level 4), or at least take my hands off the wheel and my eyes off the road (i.e. Level 3) it's not worth $100, much less $10K!

My advice: Don't pay $10,000 for something you probably won't get during the useful life of your car, and which goes with the car if you decide to trade it in for something different.

 

[Ben W]

Until I can sit or sleep in the back (i.e. Level 4), or at least take my hands off the wheel and my eyes off the road (i.e. Level 3) it's not worth $100, much less $10K!

I believe this describes Level 5 and Level 4, respectively. But for me, the value will come when City FSD reaches "solid" Level 3, which to me means that it requires substantially less cognitive load for the same level of safety, relative to manual driving. Highway Autopilot/NoA is already there. I expect City FSD to reach this level in 3-5 years, L4 in 8-10 years, L5 in 15-20 years.

As far as the tax situation, I'm sympathetic to OP because a pure software feature like FSD (particularly one that won't truly be "ready" for a few years) is really not within the spirit of the tax. One possible thing for Tesla to do would be to lock in the FSD price at reservation time, and allow the owner to postpone the upgrade for as long as the software is still in beta. (Making it basically like an early-bird Kickstarter.) Or else, offer a rent-to-own subscription during the beta period. I think either of these options would massively increase their take rate.

 

[RTPEV]

So, basically, you want Tesla to give you a way to avoid paying property tax?

No, I think they are looking for a way to avoid paying tax on the portion of the car's value that they truly don't have yet (and won't for the foreseeable future). This actually seems like a fairly reasonable question.

My advice: Don't pay $10,000 for something you probably won't get during the useful life of your car, and which goes with the car if you decide to trade it in for something different.

Now that is sound advice, IMO. I bought FSD as an upgrade to EAP for $2000, because well, $2000, while still a lot of money, seemed like a reasonable amount to spend on the possibility that one day (and I always thought the far future) there might be the possibility of the car being able to drive itself. Plus, I did want to "invest" in the technology to help ensure that when I get up there in age that the technology will be there to take over driving responsibility when I can no longer do so.

But $10,000, much less $12,000, is ridiculous for something that doesn't exist yet, and frankly, is still many years away in my opinion. I've been running FSD beta for a few months now and while there are certain aspects of it that impress me, it's just way too hesitant and unable to handle situations that come up in every single drive, so in other words, it's pretty much pointless now. And I just can't see that changing any time soon. While I had hoped that maybe by the time my car was 10 years old I could put it on the Tesla Network and let it earn money for me while I got a brand new car, now that that's only about 6 years away, I just really doubt there will be a completely autonomous Telsa Network by then.

 

[RTPEV]

I have a MYLR 30-day delivery window opening Feb. 24, but I'm in a catch 22 situation with it. I want to buy the FSD option, but I live in Virginia, one of many states that charge semi-annual property taxes on vehicles. Virgina will charge me approx. $300 a month on the basic MYLR. If I buy the $10K FSD before delivery, that increase will raise my property tax every six months for perpetuity. So for customers in these states, it's better to buy the basic car and add the FSD afterward. As you know, Elon Musk plans to increase FSD to $12,000 on Jan. 17.

$300/month is $3600/year. That is one hell of a tax rate! Are you sure it's not $300/half year, or even year? That sounds more like a one-time sales/use tax charged when you purchase the vehicle, not the annual property tax you pay with annual registration. I did just do a quick search on tax rates in VA, and yes, they are pretty high (around 4%), but that still doesn't add up to $3600/year, unless you happen to be in a county that is far above the 4% level.

We pay property tax on our vehicles in NC as well, but my total tax bill for the entire year on my Model 3 is $478.

Furthermore, at least in NC, the vehicle's value is not based on the purchase price of the vehicle, but rather the estimated value (I suspect they use blue book or something similar, and not an actual appraisal of the specific vehicle including options/trims purchased). While I imagine that they could in fact be tracking purchases options and what not, it's far more likely that they simply have a database of car makes/models/years that they use for their calculations, and thus the fact that your particular vehicle had FSD on it would not even be known by the state/county. Of course, I could be wrong, but you could probably determine this by surveying other Tesla owners in your area and asking them what their vehicles' assessed values are and see if it varies from individual to individual.

 

[daniel]

I believe this describes Level 5 and Level 4, respectively. But for me, the value will come when City FSD reaches "solid" Level 3, which to me means that it requires substantially less cognitive load for the same level of safety, relative to manual driving. Highway Autopilot/NoA is already there. I expect City FSD to reach this level in 3-5 years, L4 in 8-10 years, L5 in 15-20 years.

Level 3 by definition means that you can stop paying attention while the car drives itself; you must be in the driver's seat and ready to take over, but the car is responsible to alerting you when you must take over. "Solid" L3 is meaningless. The real distinction is when and where Level 3 can be engaged and how often it requires you to take over.

Level 4 is what I call "Sleep-in-the-back." You do not need to be in the driver's seat. The car is capable of full operation without any input from the driver, and is capable of safely parking in a safe place if it encounters a situation it cannot handle. Once safely parked it will alert you that you must wake up and take over. The real consideration is, as above, when and where it will operate.

In both Levels 3 and 4 the car qualifies even if the feature only works on one 3-mile section of one rural Arizona highway, but that would be useless for all practical purposes. So it's not the "solidity" of the feature we care about, it's when and where it will operate.

Level 5 never needs a driver. In a level 5 car, driver controls are optional.

What we have now is Level 2: You, the driver, are fully responsible. The car might alert you to take over, but it does not have to. It can drive straight into a brick wall and YOU are responsible. They might get Beta FSD so good that it only requires you to take over once a month, but it's still Level 2 as long as YOU have to be fully alert and ready to take over without warning.

That might be enough for you to consider it worth ten or twelve thousand dollars. But for me, it's not worth it until the car allows me to stop watching the road, and the CAR becomes responsible for alerting me, with reasonable advance warning, when I need to take over. And that, by definition, is Level 3. My own guess is that this is at least ten years away.

Tesla has promised us what for all practical purposes amounts to at least Level 4. The car can go off by itself to pick up the kids or be summoned from NYC to L.A. Any thinking person who was not familiar with Tesla and its history, hearing the phrase "Full Self-Driving" would understand this to mean a car that never needs a driver. If you pay for "FSD" today, your car will never reach that concept of FSD. Real FSD is ten to fifteen years away. What you'll get for your $10K or $12K is a Level 2 system that is pretty good at navigating well-constructed city streets but that requires you to be alert at all times and ready to take over without notice.

As far as the tax situation, I'm sympathetic to OP because a pure software feature like FSD (particularly one that won't truly be "ready" for a few years) is really not within the spirit of the tax. One possible thing for Tesla to do would be to lock in the FSD price at reservation time, and allow the owner to postpone the upgrade for as long as the software is still in beta. (Making it basically like an early-bird Kickstarter.) Or else, offer a rent-to-own subscription during the beta period. I think either of these options would massively increase their take rate.

Tesla won't lock in the price, because the whole purpose of selling a feature that does not yet exist is to get the money NOW. If you can wait to buy it until it actually exists, far fewer people will buy it.

The "spirit" of taxes is to get money to operate government. The idea of sales taxes and property taxes is that if you can afford to buy and own something, you can afford to give the government some money. If you can afford a $40,000 car, you can afford to pay more tax than someone who can only afford a $10,000 car. And if you can afford to pay $10,000 for a feature that doesn't even exist, you can afford to pay a bit more in tax.

And it seems the OP might have been mistaken in saying that VA will charge $300/month in property tax for the basic car.

Nobody likes paying taxes, but everybody wants trash collection and sewer maintenance and road maintenance and firefighters and good schools, etc., etc., etc.

 

[Ben W]

Level 3 by definition means that you can stop paying attention while the car drives itself; you must be in the driver's seat and ready to take over, but the car is responsible to alerting you when you must take over. "Solid" L3 is meaningless. The real distinction is when and where Level 3 can be engaged and how often it requires you to take over.

I stand corrected. I've seen various descriptions of L3 over the years, but they seem to have coalesced around your definition.

That might be enough for you to consider it worth ten or twelve thousand dollars. But for me, it's not worth it until the car allows me to stop watching the road, and the CAR becomes responsible for alerting me, with reasonable advance warning, when I need to take over. And that, by definition, is Level 3. My own guess is that this is at least ten years away.

By this definition, I'd guess 3-5 years highway, 8-10 years city. (For reaching as-safe-as-human levels. Government approval might take longer, or might require e.g. 10x safer than human.) The usefulness threshold to me is when it requires less cognitive load than not using it, which is already the case for L2 NoA on highway, and hopefully will become the case with FSD L2 in the city substantially before it technically reaches L3. Difficult to predict. Right now it's a massively higher cognitive load, of course.

Tesla won't lock in the price, because the whole purpose of selling a feature that does not yet exist is to get the money NOW. If you can wait to buy it until it actually exists, far fewer people will buy it.

With rent-to-own they could at least get some of the money now. (Versus none of the money, for the 90% of buyers who skip FSD altogether.) I think the take rate at $12k is going to be very very low, both for buy-upfront and for subscription. Subscribe-to-own would increase this a lot I think.

The "spirit" of taxes is to get money to operate government. The idea of sales taxes and property taxes is that if you can afford to buy and own something, you can afford to give the government some money. If you can afford a $40,000 car, you can afford to pay more tax than someone who can only afford a $10,000 car. And if you can afford to pay $10,000 for a feature that doesn't even exist, you can afford to pay a bit more in tax.

Pre-paying for something that doesn't yet exist is really more akin to a loan than a purchase, and loans are almost never taxed. (On the contrary; you typically earn interest by giving a loan.) I'm all for consumption taxes, but giving (or receiving) a loan is not consumption. Similar argument for taxing unrealized gains. By all means increase taxes on the rich, but fairly!

 

[daniel]

Once real FSD is safer than human drivers, even just, say, 10% safer, the insurance industry will push hard for it to be permitted. In the U.S., the states regulate this, so some states might be slow to adopt, but most will bow to the lobbying pressure of the insurance industry and grant permission. I don't think that Tesla will even apply for permission until it's at least twice as safe as a human driver.

Maybe a few people who want Level 2 City (misleadingly sold as "FSD" for now) but cannot afford it would pay for rent-to-own. I don't think many would. I'll still wait until real FSD actually exists (or at least Level 3) before I pay for it. Note also that in the real world, rent-to-own is notoriously expensive. It's little more than a side-run around usurious interest rates. Furniture stores cannot charge you 100% per year on a credit purchase, but if they call it "rent-to-own" they can effectively charge as much interest as they like. A subscription model would make more sense. But most people, experiencing what "FSD" actually is today would drop the subscription. By selling it for $10K or $12K Tesla gets a big chunk of money now.

An argument could be made that paying for FSD now is "like a loan." But it is in fact a purchase: It's a purchase of certain driver-assist features that Tesla misleadingly chooses to call "FSD" but which are actual driver-assist features. So it's a purchase. And pre-paying for something IS a taxable transaction. [Edit:] I have bought furniture with a promise that they would deliver it in several days. They charged me for the furniture AND the tax at the time of purchase, not at the time of delivery.[End edit]

For some people Level 2 City may be worth $10K. For me it's not because the time available for me to react in city driving is much less than the time available for me to react in the city. That's why I long ago quit using autosteer in the city. And it's why I'm happy I paid for L2 Highway but won't pay for anything less than L3 for the city.

 

[Daniel in SD]

Once real FSD is safer than human drivers, even just, say, 10% safer, the insurance industry will push hard for it to be permitted. In the U.S., the states regulate this, so some states might be slow to adopt, but most will bow to the lobbying pressure of the insurance industry and grant permission. I don't think that Tesla will even apply for permission until it's at least twice as safe as a human driver.

Maybe a few people who want Level 2 City (misleadingly sold as "FSD" for now) but cannot afford it would pay for rent-to-own. I don't think many would. I'll still wait until real FSD actually exists (or at least Level 3) before I pay for it. Note also that in the real world, rent-to-own is notoriously expensive. It's little more than a side-run around usurious interest rates. Furniture stores cannot charge you 100% per year on a credit purchase, but if they call it "rent-to-own" they can effectively charge as much interest as they like. A subscription model would make more sense. But most people, experiencing what "FSD" actually is today would drop the subscription. By selling it for $10K or $12K Tesla gets a big chunk of money now.

An argument could be made that paying for FSD now is "like a loan." But it is in fact a purchase: It's a purchase of certain driver-assist features that Tesla misleadingly chooses to call "FSD" but which are actual driver-assist features. So it's a purchase. And pre-paying for something IS a taxable transaction. [Edit:] I have bought furniture with a promise that they would deliver it in several days. They charged me for the furniture AND the tax at the time of purchase, not at the time of delivery.[End edit]

For some people Level 2 City may be worth $10K. For me it's not because the time available for me to react in city driving is much less than the time available for me to react in the city. That's why I long ago quit using autosteer in the city. And it's why I'm happy I paid for L2 Highway but won't pay for anything less than L3 for the city.

Wouldn't FSD eliminate personal insurance? It seems like all claims would be against the company that designed the system driving the car. It's not clear to me that insurance companies would make more money selling insurance to corporations instead of consumers.

 

[roblab]

We've had full self driving for years. It's called the "bus". You can get on, got lean back in a comfortable chair, go to sleep, and wake up at your destination.
The nice man will even wake you at your destination, and even open the door for you! What a deal!

I don't like traveling by bus, and neither do I like to let the car drive while I sleep. All this concern about being able to sleep while the car drives simply tells me that you're not getting enough sleep at night. You might want to turn off the TV a little earlier and get a good night's sleep. My wifey and I get a good 9-10 hours, and it feels great, leaving us alert and ready for anything. Like this morning: We woke up and found an email that said SpaceX was launching in fifteen minutes. LOVE watching those rockets take off!!

 

[RTPEV]

All this concern about being able to sleep while the car drives simply tells me that you're not getting enough sleep at night.

Unless the "sleep" in question is on an overnight trip.

On one trip to my in-laws several years ago, we started out late after work, planning on stopping at 11pm or so for an overnight, and then continuing on the next day. The route is relatively simple, effectively we are on I-81 for about 600+ miles. It was then that I realized how great it would be if we could just have full self driving and go to sleep, waking up the next morning as we exited the highway, saving the expense of a hotel room and a "wasted" day of our vacation.

Granted, I think we are a long way from that becoming reality, even on a simple single highway journey. Plus the car might have to be able to plug itself in and charge when needed en route. But I do look forward to that future some day.

 

[daniel]

Wouldn't FSD eliminate personal insurance? It seems like all claims would be against the company that designed the system driving the car. It's not clear to me that insurance companies would make more money selling insurance to corporations instead of consumers.

The insurance companies would still get their money. Exactly how would be hashed out by the lawyers and legislators. (Don't assume the solution would be rational.) The real bottom line is that the cost would be passed on to the car owners one way or another, and fewer accidents would mean fewer pay-outs and more profit for the insurance companies.

We've had full self driving for years. It's called the "bus". You can get on, got lean back in a comfortable chair, go to sleep, and wake up at your destination.
The nice man will even wake you at your destination, and even open the door for you! What a deal!

I don't like traveling by bus, and neither do I like to let the car drive while I sleep. All this concern about being able to sleep while the car drives simply tells me that you're not getting enough sleep at night. You might want to turn off the TV a little earlier and get a good night's sleep. My wifey and I get a good 9-10 hours, and it feels great, leaving us alert and ready for anything. Like this morning: We woke up and found an email that said SpaceX was launching in fifteen minutes. LOVE watching those rockets take off!!

The bus doesn't pass by my house or go to where I want to go or run when I need it. A better comparison would be a professional chauffeur. If I could afford it, I could hire a chauffeur, buy the house next door for them to live in, and be driven where I want to go. Sadly, that's out of my price range.

"Sleep in the back" is my way of getting around all the mental gymnastics of people who say that Level 2 is "full self driving" because it's "doing the driving." "Sleep in the back" is my way of describing a car that needs nothing from me but a destination, as a chauffeur would need nothing from me but a destination. At 73 years old I recognize that I'm approaching the age where it will become unsafe for me to drive. I want a car that is like having a chauffeur.

Uber would be a big step down in convenience because I often don't know when I'll be ready to return home and I'd rather not have to wait 20 minutes for a ride. And an Uber driver might not like me getting in his car dripping salt water from the ocean.

"Sleep in the back" is my way of saying, "No, it's NOT 'full self driving' if I have to be in the driver's seat ready to take over on little or no notice!"

 

[GOATDatty]

Tesla Suggestion. Allow rear camera to be automatically turned on based on location. Similar to garage door button and mirror fold.

I use the rear camera to make sure I am all the way in but not too far in my gararge. But now I have put my car in reverse to make an adjustment before parking. If the camera was already on I could just stop exactly where I need to be.

 

[RTPEV]

Tesla Suggestion. Allow rear camera to be automatically turned on based on location. Similar to garage door button and mirror fold.

I use the rear camera to make sure I am all the way in but not too far in my gararge. But now I have put my car in reverse to make an adjustment before parking. If the camera was already on I could just stop exactly where I need to be.

I have the camera button as one of my "favorites" on the icon row. I don't use it in my garage, but rather in pull through parking spots to know when I am forward enough.

For your garage though, most people use the tennis ball hanging from the ceiling, or what I do is pick out a reference point on the wall that my mirror lines up with.

 

[GOATDatty]

I have the camera button as one of my "favorites" on the icon row. I don't use it in my garage, but rather in pull through parking spots to know when I am forward enough.

For your garage though, most people use the tennis ball hanging from the ceiling, or what I do is pick out a reference point on the wall that my mirror lines up with.

Yeah I use the reference point on the wall to get me close and but want to keep as much room as possible in the front so I cut it very close. I dont want to accidentally close the door on my rear bumper (which I’ve done in the past). I like the button idea. But it just seems like a simple code string in the software to just make them flip on at a predetermined point.

 

[RTPEV]

Yeah I use the reference point on the wall to get me close and but want to keep as much room as possible in the front so I cut it very close. I dont want to accidentally close the door on my rear bumper (which I’ve done in the past). I like the button idea. But it just seems like a simple code string in the software to just make them flip on at a predetermined point.

Sure, I can think of 100 "simple" things I would like them to implement, but I suspect that this is a very unique use case that they are not going to want to devote time and another UI setting to. I think things that they are going to work on would have to be usable by a large majority of owners, and frankly, your use case seems very unique (not that it's not a good idea for you).

 

[father_of_6]

Hehe. You said "Virgina".

 

[father_of_6]

Wait, are you saying Virgina charges you $3600 a year to own a Model Y? In perpetuity?!?

 

[daniel]

Tesla Suggestion. Allow rear camera to be automatically turned on based on location. Similar to garage door button and mirror fold.

I use the rear camera to make sure I am all the way in but not too far in my gararge. But now I have put my car in reverse to make an adjustment before parking. If the camera was already on I could just stop exactly where I need to be.

There's a button on the screen that turns on the rear camera. And there's a setting that lets you choose whether the side-rear cameras come on with it automatically. At least this is the case with my Model 3.