I don't get your math.
If the take rate is 10% on $15,000 FSD price that's worth $1,500 per sold car.
If it goes up to 12% on a $12,000 FSD then it's worth $1,440 per sold car.
My math tracks with yours.
Going from 10% to 12.5% take rate for FSD with a price drop from $15k to $12k gives you the same revenue per car, and since FSD is a software feature, does not affect COGS and therefore would give equivalent margins.
So the question of whether it helps the bottom line is where we are on the demand curve.
A price drop from $15k to $12k is a 20% price drop. Does a 20% price drop yield more than a 2.5% increase in take rate?
Factors in favor:
1. Purchasing software features like FSD do not affect eligibility for the US Inflation reduction act tax breaks.
2. We have seen FSD Beta get approved in a few additional countries this quarter.
3. FSD v12 demo and HW4 release shows more promise for future FSD capabilities. Many countries have seen FSD testers get hired.
4. FSD now available for HW4 cars.
5. City streets no longer listed as “coming soon” on the website.
6. Highest cost cars, where sales of FSD are most likely, saw a big price drop. These buyers likely have more discretionary money to spend on “nice-to-haves” like FSD (though this is a smaller percentage of sold cars).
Factors against:
1. FSD transfer is in effect this quarter, so existing customers with FSD will be transferring it to their new cars without any additional revenue to Tesla.
2. High interest rates, so luxury features like FSD less likely to be sold.
Given these in totality, I could see take rate for FSD increasing by more than 2.5% this quarter. Maybe increasing by 5%, which would mean revenue per car going from $1500 to $1800 and therefore increasing margins.
So I think it is quite possible that margins get a positive overall contribution in Q3 due to the FSD price drop, but I think the impact won’t be too significant.
It is likely Tesla will recognize city streets deferred revenue this quarter, though this will be a one-time positive impact so will be backed out by analysts.
I think Tesla needs to start reporting FSD take rate and demonstrating a positive trend before analysts start pricing these near 100% margin revenues into their models.
IMO Tesla’s numbers would see a huge improvement if Elon stopped treating FSD like some massive investment buyers are making on an autonomous future and instead just treated it as a normal feature add-on. After all, it’s a high-margin software feature.
$15k is a lot to swallow for a private buyer for a feature whose benefit as a robotaxi revenue stream is yet to be proven and not on the short-term horizon.
