Smart move by Tesla. I just purchased my 3rd Tesla (arriving next month) and I too saw that the free period was reduced to 30days.
Does anyone have a good guess on what Tesla profits on this?
If they charge $100 a year, what is their cost?
The Tesla US price is $9.99 per month or $99 per year. AT&T is their vendor, which has a very extensive list of vehicle access options. The Tesla plan excludes software updates, which still require a wifi connection. AT&T wholesale pricing is not posted, and in any event has a huge variety of options.
I consulted with a roughly comparable source to try to get an idea about both cost to Tesla and other factors.
First, the assumption is that the vehicle navigation system caches everything recently used including routes, and that the bulk of all data is achieved during the regular wifi updates.
Second, the actual Premium Connectivity functions are minimized to include vehicle traffic data changes and other rapidly changing data.
Third, given both fleet size and usage patterns, the Tesla/At&T arrangements certainly constitute high value to both. It there for is safe to assume that the trip connectivity is a cost shared between AT&T and Tesla.
Fourth, The AT&T pricing undoubtedly contains many performance metrics on both parts.
Fifth, AT&T has benefited enormously by the fleet arrangements with Tesla which provided much of the mobile technology support needed by AT&T.
Given all that, my best estimate is that cost to Tesla for subscription support is around $2 per month per connected vehicle after free connectivity. The initial free connectivity incurs no incremental cost to Tesla, except for special offers extending the one month that probably are at the standard $2 per month.
That estimate is probably not exactly correct, but certainly reflects the accurate range. So, why so cheap?
Really, that one is not complex.
1. Roughly half the total telecom service cost for data services is in initial installation, billing, collecting, customer service and credit losses. That data was roughly accurate for telecomm provided data services three years ago in the US for one large provider, not AT&T.
2. One of the remaining largest costs is serving routine customer issues with connectivity issues of many sources, as well as consumer education.
In the Tesla case, as in nearly all wholesale cases, all that servicing is done by the customer owners, i.e. Tesla, in this case.
If these assumptions are accurate, even roughly, the Tesla margins on Premium Connectivity must exceed 80%.
