Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Knightshade]

My FSD subscription questions:

- If someone purchases today, do they lock in at that subscription price until they cancel? Elon has been transparent at the price of FSD rising as they introduce more features

No wording suggesting anything like a locked price is listed- so I'd expect it'd potentially go up over time.

- Are FSD subscription members eligible for the Early Access Program? Or is that for full purchasers only?

The very earliest FSD purchasers are still waiting for the EAP invites they were promised by Tesla years ago.

Instead all they got was the same "update preference" button everyone else got, that doesn't seem to actually do anything.




So that's pretty much a no.

Though if you've got a big enough youtube channel I suppose you might get an FSDBeta invite

- Now that subscriptions are out, will Tesla begin to offer EAP again? Still plenty of buyers who would purchase EAP outright (since it covers the bulk of their needs), and would occasionally pay the $99 for FSD

I think they DO offer it in the other markets where FSD take rate was super low... if anything they might remove that option now that you've got this one.

In the US I don't really see it coming back... it was 6k I think last I saw it? That's 2.5 years of FSD subscription.

 

[dww12]

I think 50% take rate on entire fleet is.... very very very optimistic right now.

Esp. given FSD is pretty crippled outside of the US.

China take rate Elon cited at 1-2%..... EU was also single digits IIRC.

Those might jump 5-10x with a subscription, but that's still WAY WAY WAY under 50%.

Maybe if they get overseas regulators to allow more features that'll change.


US take rate could maybe be that high (or maybe even a bit higher- I think it's rumored to be in the 20-30% range now?) but not enough to get you to 50% worldwide.


On top of that you have to LOSE the 10k up front from whomever in the 20-30% (in the US, lower elsewhere) WAS gonna pay it and now goes subscription.

I think Master of Coin mentioned that exact thing on last earnings call- pointing out it'll be an upfront drop in income in exchange for the recurring over time.


And on top of that... well, actually I'm curious about this part... how does revenue recognition work? Right now they don't recognize part of that 10k, because they haven't delivered FSD entirely yet, so they can't recognize that money until they fully deliver the product... same for the monthly money? Or is that "we're only selling you what we have THIS month so we recognize all of it?"





Seems objectively good news, so if the past is any guide we'll be red Monday.

No refunds at all on subscriptions, so 100% recognized.

 

[goinfraftw]

A couple of thoughts on the subscription being available:

1. This is pretty bullish on confidence on FSD v9 being a final beta IMO...
2. The pricing mix and take rate between FSD paid in-full as opposed to monthly is going to be seriously interesting

Questions:
- What's FSD take rate right now? I'm reading it was 27% at the end of ...2019
- How much more adoption is Tesla going to see with subscription on top of the current FSD userbase?
- What's the adoption curve of fully paid FSD after a what length of months on FSD subscription?
- How large is the Tesla fleet currently?

 

[Knightshade]

A couple of thoughts on the subscription being available:

1. This is pretty bullish on confidence on FSD v9 being a final beta IMO...

Elon has already mentioned V10 and V11 of the beta, so not so much.

2. The pricing mix and take rate between FSD paid in-full as opposed to monthly is going to be seriously interesting

Questions:
- What's FSD take rate right now? I'm reading it was 27% at the end of ...2019

Nobody but Tesla knows for sure.

There's semi-educated guesses in the 20-30% range in the US.

Elon cited 1-2% for china.

EU is thought to be low to mid single digits since it's relatively crippled by regulators there.

No refunds at all on subscriptions, so 100% recognized.

I mean, after 48 hours there's no refund on buying FSD either.

But they don't recognize all that revenue, because they still owe the customer part of what they bought that Tesla, presently, is not able to deliver.

You can't fully recognize revenue when you still owe something for it.

Right now if you purchase FSD it mentions autosteer on city streets coming later this year... (though to be fair, it's promised that since 2019)... so they can't recognize the full revenue for purchases till they deliver that, they have to defer some of it.


For the monthly, if they're only offering the existing features in the subscription, then they CAN recognize all of it.

 

[Nolimits]

Next long road trip. I’ll have to subscribe and check it out.

 

[mickle]

As a single data point, I am not a taker on the FSD subscription. I'd have to pay the $1500 to upgrade my early 2019 M3, then I'd probably only use FSD once or twice a year, so not worth it. Maybe someone can do one of those polls so we can get an idea of a take rate?

 

[3'sterly]

My genius plan:

1. Buy one of those weird tiny real estate lots for road easement in a rich neighborhood of Palo Alto.

2. Waste all of my Tesla gainz on a few megapacks and install them on said lot and hookup to PG&E

3. Begin to control local grid power supply

4. ???

5. Profit

4. could be “install supercharger, cybercharger and EV chargers”

 

[Ohmster]

The Infotainment upgrade has always included the FSD computer, even though they didn't specifically state that. (Which is why it costs $500 more if your car has AP2.0 or AP2.5.)

I don’t believe it was ‘always’, having upgraded 3 Tesla’s to MCU2 with ‘complementary’ updates to HW3 solely due to purchase of FSD.

However, Tesla did start doing as you stated later in the program. My upgrades were done prior to that distinction.

MCU1 to MCU2 – TeslaTap

teslatap.com

 

[MXWing]

You can get the hardware upgrade for free if you pay $10k for FSD. And you have 48-hours to cancel that purchase.

Any chance you could purchase FSD, get the upgrade installed, and then cancel it in a 48-hour period?

The upgrade part should be non refundable so 8500 back. Not quoting any official policy but I can’t see it not being this for edge cases.

It immediately makes all 2017, 2018 cars worth $1500 less than those that came with hw3 even though they did not order eap or fsd. It also adds a $1500 barrier to the $199/mo subscription. Just eat it and get all cars able to subscribe. It looks unfair and thats a bad look that Elon always end up caving to anyway.

This is weird take. If you want to be “made whole” just do what everyone else would have 6 hours ago, buy FSD for 10k. That’s still an option to you right now.

The 1500 fee is important because it
1.) Carries a real cost to Tesla for time, labor, opportunity cost of tech and service.
2.) It discourages adverse selection. Why NOT pay $200 to have the newest hw3 installed just to have it or try to improve resale with it? The first thing I did was to check on my wife’s sr if it would be free to get hw3 when doing a sub.

 

[twtestw]

A couple of thoughts on the subscription being available:

1. This is pretty bullish on confidence on FSD v9 being a final beta IMO...
2. The pricing mix and take rate between FSD paid in-full as opposed to monthly is going to be seriously interesting

Questions:
- What's FSD take rate right now? I'm reading it was 27% at the end of ...2019
- How much more adoption is Tesla going to see with subscription on top of the current FSD userbase?
- What's the adoption curve of fully paid FSD after a what length of months on FSD subscription?
- How large is the Tesla fleet currently?

I get the pricing but I don’t. Let’s assume a 6-year timeline (Using 6 years because that’s how Tesla shows fuel/potential savings to prospects)

Scenario #1: Buy FSD in full
- $10,000 upfront
- Recoup ~$3,500 when selling car
- Total cost: ~$6,500

Scenario #2: FSD Subscription
- $199/month
- Total cost: $14,328 after 6 years

So I don’t really get what Tesla is going for here. My assumption would be that they would want as many cars as possible to have FSD. This doesn’t really do that. How I’m left feeling here is that I’ll make a 1-month purchase of FSD when I know I’ll be going on a road trip or something, and I’ll cancel after that. Still profit for them, but nowhere near what they could get from me.

$129/m feels like a much better price point, but… I’m far from an expert so I’ll let the experts do what they do.

 

[Knightshade]

I get the pricing but I don’t. Let’s assume a 6-year timeline (Using 6 years because that’s how Tesla shows fuel/potential savings to prospects)

Scenario #1: Buy FSD in full
- $10,000 upfront
- Recoup ~$3,500 when selling car
- Total cost: ~$6,500

Scenario #2: FSD Subscription
- $199/month
- Total cost: $14,328 after 6 years

So I don’t really get what Tesla is going for here. My assumption would be that they would want as many cars as possible to have FSD. This doesn’t really do that. How I’m left feeling here is that I’ll make a 1-month purchase of FSD when I know I’ll be going on a road trip or something, and I’ll cancel after that. Still profit for them, but nowhere near what they could get from me.

$129/m feels like a much better price point.

Elon repeatedly said subscription will cost more over life of car than buying outright.

Once again Elon tells us in advance how something will go and then nobody believes him.

It's weird.

 

[goinfraftw]

I get the pricing but I don’t. Let’s assume a 6-year timeline (Using 6 years because that’s how Tesla shows fuel/potential savings to prospects)

Scenario #1: Buy FSD in full
- $10,000 upfront
- Recoup ~$3,500 when selling car
- Total cost: ~$6,500

Scenario #2: FSD Subscription
- $199/month
- Total cost: $14,328 after 6 years

So I don’t really get what Tesla is going for here. My assumption would be that they would want as many cars as possible to have FSD. This doesn’t really do that. How I’m left feeling here is that I’ll make a 1-month purchase of FSD when I know I’ll be going on a road trip or something, and I’ll cancel after that. Still profit for them, but nowhere near what they could get from me.

$129/m feels like a much better price point, but… I’m far from an expert so I’ll let the experts do what they do.

More people on FSD with subscription. Leads to more data for Tesla and the product/service as well as pure software margin profit. You're also forgetting about the Scenario of people going on and off...and on again with subscription (e.g. long trips).

 

[CLK350]

It totally used to set all the EV companies back, now, not so much. Tesla has very much surpassed that narrative, just doesn't hold water anymore. The last fire with the Plaid feels like a nothing burger as it seems staged.

I do wish that GM, Ford and others do the right thing, but I'm so skeptical that it behooves me to not hold my breath.

Not sure if it'll help you breathe any better, but GM, Ford have been doing the 'not right' things these others have told them to do, since forever.

As I posted a while back, it is not really the auto companies, but these others aka the oil & gas, coal & utilities companies that are doing the 'not right' thing behind the scenes. For them it is profitable to slow Tesla as much as possible, fund FUDsters, and even lose $Billions shorting TSLA. Each day renewables can be delayed is worth a couple $B for the oil companies. Texaco bought the entire NiMH subsidiary of GM, with their patents, and allowed NiMH battery use for cameras, laptops etc. BUT not for car batteries, actively blocking battery tech progress. Exxon knew about climate change already back in the 1970's but chose to bury their findings and fund climate change deniers; GM was essentially forced by these others to bury their popular EV1.

 

[Drumheller]

Not everyone keeps a car for 6 years. I had my model S for 4 years and 9 months. Put 100,000 miles on it during that time. My Model Y I bought in Oct 2020. I intend to only keep it until my Cybertruck is ready, so probably 2 years total or less. Subscription makes more sense for me, with the Model Y, since Tesla links FSD license to the vehicle, not the driver.

 

[Knightshade]

More people on FSD with subscription. Leads to more data for Tesla

Not really though.

They can collect the same data regardless of if you have FSD or not.


Look up greentheonly on twitter explaining how shadow mode works sometime.

Not everyone keeps a car for 6 years. I had my model S for 4 years and 9 months. Put 100,000 miles on it during that time. My Model Y I bought in Oct 2020. I intend to only keep it until my Cybertruck is ready, so probably 2 years total or less. Subscription makes more sense for me, with the Model Y, since Tesla links FSD license to the vehicle, not the driver.

6 years is average length of new car ownership in the US... (well, 71.4 months anyway, as of last year.... and has been getting longer, I suspect 2021 will be longer still)

Heck, as the EV transition happens, but supply remains low for a while on good EVs, it'll likely keep getting longer.

 

[BornToFly]

I like the subscription. I bought what ever they were calling FSD in 2015, sold the car in 2019 and never got it. Bought FSD again in 2019, and two years later, still nothing. We are getting a Model Y for our vacation home, and we will only use the car 6 months a year. Would rather pay for the subscription on the months we are using the car, when FSD with auto steer on city streets actually becomes a reality. Until then, I'm not considering spending 10K. Fool me once, and twice, but not three times!

 

[twtestw]

More people on FSD with subscription. Leads to more data for Tesla and the product/service as well as pure software margin profit. You're also forgetting about the Scenario of people going on and off...and on again with subscription (e.g. long trips).

But these are the exact reasons why I am a little confused

If the goal is to have more people with FSD, then why price the product at a price point that leads to consumers subscribing on and off? Shouldn’t the goal be to find a price point where consumers buy it and don’t cancel?

- Option 1: $129/month for 12 months = $1,548
- Option 2: $199/month on and off (6 months) = $1,194

I even call out in my original post that at this price point, I would fall into Option 2 (and 6 months is generous. I’d probably end up at 3 months).

 

[Drumheller]

6 years is average length of new car ownership in the US... (well, 71.4 months anyway, as of last year.... and has been getting longer, I suspect 2021 will be longer still)

Heck, as the EV transition happens, but supply remains low for a while on good EVs, it'll likely keep getting longer.

If I were planning to keep a vehicle that long, I'd likely try a month of the subscription as a trial before purchasing the full license. There is still some risk that the car is totalled and insurance doesn't want to pay out for the cost of FSD. While I agree that the full license makes more sense for long term owners, I do think there are some factors to consider.

Interested in seeing how Tesla does with the subscriptions.

 

[twtestw]

Elon repeatedly said subscription will cost more over life of car than buying outright.

Once again Elon tells us in advance how something will go and then nobody believes him.

It's weird.

Why are you implying that we didn’t believe what Elon said? I even put in my post “I get it but I don’t”.

We know what he said. Just like we know that FSD will eventually go to the price he said. Doesn’t mean we can’t disagree/have another opinion.

 

[Prunesquallor]

Care Bears out of hibernation.