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Tesla to increase cost of FSD beta software beyond its $12,000 price tag

diplomat33

Average guy who loves autonomous vehicles
Aug 3, 2017
10,356
14,822
Terre Haute, IN USA

I think Elon is making a mistake to keep raising the price of FSD, especially since FSD still requires driver supervision. It would be one thing to offer true driverless L5 for $12k but to charge $12k for L2 is ridiculous. I get that Elon thinks that $12k is cheap if Tesla "solves FSD" but Tesla has not "solved FSD" yet. So, I think it is premature to raise the price. And I think Tesla "solving FSD" this year, which would presumably mean FSD is safer than humans and works everywhere with no driver supervision, is extremely unlikely. So, I think Elon is getting way ahead of himself.

And I think Elon is assuming he can charge that much because there will be no competition. But the competition is coming. Mobileye is saying that they plan to sell L4 on consumer cars for less than $6,000 by 2025. Thanks to Mobileye's crowdsourced maps, it will work almost everywhere and will not require any driver supervision at all. If Mobileye is able to do that, they will completely undercut Tesla. Nobody will pay $12k or more for Tesla's FSD when they can get true L4 for less than $6,000.

Of course, we don't know how good Tesla's FSD will be by 2025. But let's pretend for argument sake that by 2025, Tesla does "solve FSD" and FSD is safer than humans and works everywhere with no driver supervision. So your choice is FSD that works everywhere with no driver supervision for $12k+ or Mobileye's true L4 that works almost everywhere and with no driver supervision for less than $6,000. IMO, in that scenario, Mobileye is still the better deal. And if Tesla somehow does not "solve FSD" by 2025, then Mobileye is an even better deal because nobody will pay $12k for L2 in 2025 when they can get L4 from Mobileye and others for far less.

Basically, Elon can raise the price of FSD now because there is little competition. But by 2025, there will be lots of FSD competition. And with competition, prices will come down. When there is FSD competition, Tesla will have to lower their price on FSD to stay competitive.
 

diplomat33

Average guy who loves autonomous vehicles
Aug 3, 2017
10,356
14,822
Terre Haute, IN USA
I suspect he is using it as a demand lever.

Yep. And it is not the first time. Elon has teased before that FSD will be "solved" or that some big FSD feature will be released and the price will increase soon to create fear or missing out to get Tesla owners to buy FSD.
 

srs5694

Active Member
Jan 15, 2019
1,540
2,061
Woonsocket, RI
I paid $5,000 for FSD in March of 2019, knowing that Tesla might never deliver what they'd promised; but I figured I'd get something for my money. In fact, I have gotten some value from FSD, simply because the Advanced Autopilot features, which at that time were available only in the FSD package, are worth something. The main FSD-on-city-streets feature, though, is currently worth negative money -- Tesla should be paying me to use it, not vice-versa, because it does not make it easier to drive. If anything, it takes more effort, and I believe it is less safe, than my driving the car myself. Therefore, although I do have the FSD beta, I seldom activate it; I do so only in light traffic when I'm feeling particularly alert and generous. I don't think I'd go back in time and undo my FSD purchase, since it might eventually be worth the $5,000 I paid for it; but the longer I own my car (and therefore the less time I will own it in the future), the less likely that becomes.

Even if Tesla were to deliver true Level 4 or Level 5 autonomy, I'm not sure that'd be worth $12,000 on a new vehicle. $12,000 will pay for a lot of Uber/Lyft/taxi rides. If I needed to replace my Model 3 with a new one, I'd skip the FSD package. I'm not even sure that I'd spring for the new incarnation of Advanced Autopilot; the $6,000 that Tesla is asking for that feature is excessive, IMO. That's more than I paid for the FSD package three years ago, and the current Advanced Autopilot features aren't that much better than they were in 2019. (Smart Summon is a nice parlor trick, but I've never used it for real.)

A few weeks ago, there was a thread with a poll entitled What would you pay for FSD, if anything? The modal response was $4,000, with 17.1% of responses. A significant number (9.8%) responded "Tesla pays me." Only 7.3% responded that they'd pay $12,000, and that was the highest value in the poll. There are a boatload of caveats about this forum poll -- self-selection bias, ambiguity about what's being asked (FSD as it exists now vs. what Tesla is promising), etc. Still, this may be a warning sign that Tesla is already charging too much for FSD. Another such warning sign is that the take rate on the feature has been dropping for years. IIRC, it peaked around the time I bought my car and has plummeted since then, as Tesla has increased the price of this mostly-vaporware feature.
 
The only way I see the price making sense is if they expect to retrofit existing cars with new hardware to achieve the goal. At that point, paying for “FSD” is really a prepayment for an upgrade to the sensor suite.

If they don’t upgrade the hardware, then (as one who has sat behind my fsd robot driver for 9 months) I don’t think they will ever achieve it.


For the MobileEye comment: with more storage, a more powerful processor to take the added inputs and an added module of crowdsourced maps, I see Tesla able to implement a similar strategy. But again, this relies on a new processor. One with at least as many transistors as a high end laptop, like the M1 Max, which has more than 10x the transistors found in the fsd computer.
 
A few weeks ago, there was a thread with a poll entitled What would you pay for FSD, if anything? The modal response was $4,000, with 17.1% of responses.
Have you seen a poll for any high end product where people didn't say that wanted to pay less for it? Tesla probably is happy to sell less units of FSD at a higher price. Limiting the number of buyers also cuts down on the amount of complaints.
 

Twiglett

Single pedal driver
Oct 3, 2014
3,813
4,361
Austin
Lots of things have increased 50%+ since 2016-7.
right but the difference now is that current cars already have basic AP.
So the $6k for "new" EAP just adds NoA, Summon, Parking etc on top of the free AP that all cars have, which is much more than 50%

On balance for me and I'm guessing many others, charging such a silly amount of money for FSD just means we don't bother paying it so they lose the revenue.
I've got FSD beta on my Model 3, but I'm not going to bother paying $6k just to get lane change and summon and certainly not paying $12k or more for FSD with my Model Y order.
 
I think this is a chicken and the egg situation. To this day, I don't think there is another car brand with EAP equivalent capabilities. Some close but not quite. You can scream all you want about how worthless and over priced FSD was, is or to be. Tesla is setting the price point now for whatever capabilities it will introduce. Other car manufacturer will most likely follow closely on that price point if they have the capabilities. Why give away pure profit?
 

ElectricIAC

Good-Natured Rascal
Dec 31, 2019
4,898
4,155
Tejas
right but the difference now is that current cars already have basic AP.
So the $6k for "new" EAP just adds NoA, Summon, Parking etc on top of the free AP that all cars have, which is much more than 50%

On balance for me and I'm guessing many others, charging such a silly amount of money for FSD just means we don't bother paying it so they lose the revenue.
I've got FSD beta on my Model 3, but I'm not going to bother paying $6k just to get lane change and summon and certainly not paying $12k or more for FSD with my Model Y order.
Yeah. When we got our cars FSD was between $6-7K. Didn’t think it was worth it then but our discount was so steep that I left it in there to see if it ever amounted to anything.

Should have taken the money and put it in $TSLA instead.
 
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Twiglett

Single pedal driver
Oct 3, 2014
3,813
4,361
Austin
I think this is a chicken and the egg situation. To this day, I don't think there is another car brand with EAP equivalent capabilities. Some close but not quite. You can scream all you want about how worthless and over priced FSD was, is or to be. Tesla is setting the price point now for whatever capabilities it will introduce. Other car manufacturer will most likely follow closely on that price point if they have the capabilities. Why give away pure profit?
There will always be someone willing to pay it. But what's happening now is that it seems there are fewer and fewer folks willing to pay it, so they end up with less money not more.
Should have taken the money and put it in $TSLA instead.
Amen to that!!
Then our $TSLA would have got us a pair of Model X Plaid today :D
 
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Reactions: ElectricIAC
Tesla's huge mistake here is to be charging a price based on theoretical "you can have your car go rent itself out as an autonomous taxi" value proposition when in fact they simply do not have anything near that level of functionality right now.

I get the dream. I also know what the thing can do right now, and selling a potential future dream in today's dollars is kind of a crappy deal. Get it working, and charge a price based on what it can actually DO.
 

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