Why is FSD not transferable to your next Tesla?

[phantasms]

I happily drink the kool-aid and I'm here every day. I just want to have a discussion so I can better understand why they don't offer transferring FSD to a new car.

I have a 2018 Model 3 AWD+ with ~36k miles on it. I plan on selling it for the Plaid S or Roadster [if it comes out in 2021]. As a TSLA investor I'd love to get my hands on FSD even though I work from home and wouldn't use it a ton. Dropping $8k on it to get some small amount back come trade-in time doesn't make sense to me. [Yes I reserved the Plaid S with FSD but that's besides the point]

If FSD continues to get more expensive, as it should, it will eventually be priced out of range for the vast majority of people. Additionally the cars that have it will eventually be taken off the road. Essentially ownership of FSD will become smaller and smaller over time.

If one could transfer FSD it would promote more current Tesla owners to upgrade to a new car without taking a bit of a bath on a previous FSD purchase. Additionally, it would allow people like myself to make the purchase. People who eventually want FSD but are unsure about putting $8-$10k into a car that's getting past it's prime and, while it'll work, won't work as well as AP4 computer and updated sensors which are coming soonish.

The only negative for Tesla is they can't continue to milk Tesla owners out of FSD again and again. Some of us hold cars for a decade, some for a few years, and some flip/upgrade as often as I do running shoes.

So what's the deal? It seems like it's the right move to do for the customers and would be a cash influx for Tesla in the here and now. Might it impact profits way down the road as more people will own FSD instead of subscribing, sure? Telsa will be swimming in money come that time.

So what's the deal? Why do you think they don't offer the transfer?

Thanks!

Best,
Gene

 

[jeremymc7]

FSD being software has less depreciation vs the car. Since the price goes up it's resale value goes up. Even though it goes with the car instead of the owner so loose little buying it again on the next car. If you bought now for $8k it would say be work $9k when you go to sell it in what 4 years. So then you buy it again for $10k at that time and your out of pocket $1k. Much less then selling the car itself and buying a new one.

Buying it again on the second car shows another sale and shows more revenue on their books.

Likewise what if FSD stayed with the owner? What if in 4 years you no longer wanted a Tesla but something else. Then you have that $8k purchase just sitting in your Tesla account and would be like damm I lost that $8k, which I could have included it on the sale of my old car.

You're also paying for FSD based on a current level of hardware. The cost of the software subsidizes the hardware cost. Down the road if FSD becomes far more complex hardware wise the second purchase (at higher price?) covers that hardware cost. And as above the additional revenue also helps support future development of the software. If everyone just transferred their ownership from car to car Tesla would have far less revenue to support continued development.

 

[MC3OZ]

Allowing transfer or at least providing a discount on FSD for the new car, would be a demand lever.
It seems at present they don't need that demand lever..

The also don't distinguish between private use of FSD at Robo-taxi use. (Granted there is no Robo-taxi use at present)
So I would like to see a 2-tiered price eventually, depending on use.

I would also prefer a "lease to buy" option, rather than a straight rental.

My best guess at this point in time is Tesla has spent a lot of money developing FSD and want to recoup that expenditure ASAP..

Things can always get more relaxed and customer friendly in future, but it is hard to go the other way.

Past experience has shown that if customers keep raising the issue Tesla eventually listens.. but it can literally take years...

Any discount can only apply trading an existing Tesla in on a new Tesla...
If Tesla can put your old car in the Robo-taxi fleet, that may give them one additional reason to do the deal.

 

[jjrandorin]

How many times should it transfer (rhetorical question)? I normally avoid these type of discussions because of the vitriol that normally ensues, but am willing to engage with you as I believe you might be able to have a discussion about it without that.

What other business would sell someone something once and let them transfer it for life, without some other hook in making money on it? Its more likely that tesla eventually settles on some sort of permanent subscription for it than them allowing people to transfer it to other cars, even though they "could" do that.

Right now, its "easy money". They can remove it from cars when people trade them in, re sell it back to people who want it, etc, and it doesnt cost them any "more" money than the money they already have sunk into the car as they include all the sensors, etc.

If tesla was like almost every other manufacturer, they would force a person to choose at order time, and if you didnt buy then you could never have it (a-la every other major feature for a car manufacturer). The argument is normally "it would be better for the customer" but tesla (like every company) is (and should be) focused on making money.

Whatever a companies "mission" is, they need to make enough money to execute on that mission. I work for a company that makes medicine for various illnesses that are usually fatal (that helps extend life, and improve quality of life etc). The company mission is to put as much as they can back into research, and many of the medicines we have are for diseases that have "small populations". Even if we want to put as much as possible back into research, to help as many people as we can, we still need to make money to do so.

Anyway, How is allowing a person to "take FSD with them" a money making thing for tesla? I am sure they have accountants do "lots of maths" to see if doing that would result in more sales, or does it work better taking it off of traded in vehicles so they can re sell it again (and again)?

I cant see a situation where its better for TESLA to allow customers to "keep it forever". I CAN see them eventually saying its a subscription (which they said they are going to do), thats really expensive if you extended it.. like $100 for a week or something, and let people enable it while on vacation.

Even though customers want it, I am interested how anyone thinks this is better for tesla's bottom line, and I am not really interested in reasons that are "about the mission of advancing energy" or some such.

 

[MC3OZ]

Once the Tesla network is approved there is one additional option.

Keep the old car and send it out to work.. if fact it may not even need to park at your place.
If Tesla handles cleaning, charging and maintenance, you may rarely see it.

 

[jjrandorin]

Once the Tesla network is approved there is one additional option.

Keep the old car and send it out to work.. if fact it may not even need to park at your place.
If Tesla handles cleaning, charging and maintenance, you may rarely see it.

I dont think I will live long enough to see any sort of robo taxi with level 5 self driving anywhere around me, and I am 53 and hope to be alive at least another 20-25 years.

 

[Big Dog]

one thing to remember is that FSD raises the resale value of your car (at least per Elon), so you might get some of it back.

But yeah, your point about trade-in is a good one. Folks might trade up to a Performance model or from a 3 to a Y, but if it costs $10k more......yikes.

 

[Sudre]

I think most of this has been covered and thanks for starting another thread on this, you saved the Mods time.

I do not see the advantage of you keeping the software. It will definitely reduce the resale value of the car. I don't know why anyone would think it does not reduce resale value. That means technically you really are not saving much money. I could see a potential to get a discount for a software "upgrade" into the new vehicle if you previously had FSD on your trade in. Say FSD cost $10K. It could be reduced to $8K on the new purchase.

If you transfer your old FSD to the new 2025 Roadster with 5D rendering and 12 cameras, does Tesla get to shut off the extra cameras, radar, sonar (for amphibious mode), cold gas thrusters, and other new features since you are transferring the old software? I don't know about you but I would like to have the 007 "take the wheel" package. You never know when someone might be shooting at you and the car needs to dodge bullets while you hang out the sunroof shooting back. (sorry, had to add the humor but you get the idea)

 

[MC3OZ]

I dont think I will live long enough to see any sort of robo taxi with level 5 self driving anywhere around me, and I am 53 and hope to be alive at least another 20-25 years.

Regulatory approval is the hard to predict part.

Personally I'm 60 and I hope to use my car to drive me around when I'm too old to drive.

I expect that would work, but I think my daughter will steal the car and have it drive her around. In fact I think it is 50/50 whether my daughter would both getting a drivers license. Sooner or later a majority of people will not bother..

So basically working in 3-5 years, regulatory approval 5-10 years is my guess, and all guesses are equal at this stage.

 

[EinSV]

We bought FSD for both of our Model 3s in 2018 for $3,000.

Next week FSD will cost $10,000*, next year probably $15,000 and eventually much more as FSD capabilities improve. There will also be subscription plans with monthly fees that increase over time.

Everyone loves a free lunch. I would love to get $10,000+ software for free for the rest of my life. But it would be insane for Tesla to do that, so they won't.

The good news is that when I decide to trade-in our Model 3s, FSD will almost certainly be worth more than I paid for it. Does that ever happen with any other car option? No. The value of other options drop like a rock as soon as you buy them.

And no Tesla doesn't need to give away FSD to customers to sell cars. Tesla is doing just fine without giving away software. FSD is a key part of their business, they offer a fantastic product, and they deserve to get paid for it.

*$10,000 FSD under the current system would probably be equivalent to about $8,000 under the EAP/FSD system that was in place when we bought our cars but the basic point is the same.

 

[UCF3]

If EM really thinks FSD is worth $100,000 then why would he sell it to you now for $8,000 and let you transfer it for life? Tesla is planning for a future where FSD is so expensive they will no longer sell cars but run the robotaxi network with Tesla owned vehicles

 

[Ludalicious]

For this very reason I am keeping my P100D for life. FSD is literally worth 15% of what the vehicle is actually worth now. If I just Put it in the garage one day it might be able to drive me somewhere.

 

[Tiger]

For this very reason I am keeping my P100D for life. FSD is literally worth 15% of what the vehicle is actually worth now. If I just Put it in the garage one day it might be able to drive me somewhere.

You have yourself and expensive taxi there, sir

 

[petit_bateau]

I too think FSD ought in principle to be capable of transferring (see my Long-Term Fundamentals of Tesla Motors (TSLA)) . It motivates early adoption of FSD, and it motivates Tesla-lock-in, both of which are to Tesla's benefit. However there should be two caveats: Firstly a transfer fee as there will be both a cost to Tesla of managing the version complexity, and a value to the owner of moving that SW from HW version n to n+1 which may (or may not) give access to additional functionality. Secondly an allowed transfer matrix that in essence will only allow forwards technology transfers, never backwards.

 

[goRt]

I happily drink the kool-aid and I'm here every day. I just want to have a discussion so I can better understand why they don't offer transferring FSD to a new car.

I have a 2018 Model 3 AWD+ with ~36k miles on it. I plan on selling it for the Plaid S or Roadster [if it comes out in 2021]. As a TSLA investor I'd love to get my hands on FSD even though I work from home and wouldn't use it a ton. Dropping $8k on it to get some small amount back come trade-in time doesn't make sense to me. [Yes I reserved the Plaid S with FSD but that's besides the point]

If FSD continues to get more expensive, as it should, it will eventually be priced out of range for the vast majority of people. Additionally the cars that have it will eventually be taken off the road. Essentially ownership of FSD will become smaller and smaller over time.

If one could transfer FSD it would promote more current Tesla owners to upgrade to a new car without taking a bit of a bath on a previous FSD purchase. Additionally, it would allow people like myself to make the purchase. People who eventually want FSD but are unsure about putting $8-$10k into a car that's getting past it's prime and, while it'll work, won't work as well as AP4 computer and updated sensors which are coming soonish.

The only negative for Tesla is they can't continue to milk Tesla owners out of FSD again and again. Some of us hold cars for a decade, some for a few years, and some flip/upgrade as often as I do running shoes.

So what's the deal? It seems like it's the right move to do for the customers and would be a cash influx for Tesla in the here and now. Might it impact profits way down the road as more people will own FSD instead of subscribing, sure? Telsa will be swimming in money come that time.

So what's the deal? Why do you think they don't offer the transfer?

Thanks!

Best,
Gene

Those are the terms you signed up to at point of purchase, no gun held to your head

 

[75Shappyt]

Tesla did it right, just discount the cars like they did on the MS, so to sell more FSD, and sell it over and over again, makes more money

 

[Let's Drive]

I think they're avoiding making it transferable, because there isn't competition in the specific space and they want to get away from lifetime options. Subscriptions will bear more fruit in the long run, while they receive an infusion of cash during the development phases.

That said, I'm not fully onboard. Cars depreciate, even Tesla, and relying on FSD to appreciate the vehicle is a tough sell, at this point. I'm genuinely positive the system will eventually be capable, but in order for the vehicle to make money, I have to essentially start or partner with Tesla to run a taxi service, with my personal property. I've seen how the general public treats things which aren't theirs-- I'm not interested in spending 10s of thousands to ferry people around, in the hopes of recouping costs or making money. If I wanted to do that, I'd go into charted territory and rent property, instead.

While the software may improve, the hardware (physical car) is going to age. For example, I wouldn't spend extra on an old laptop computer, just because I can update Windows. It will be a question of how much improving software will compensate for aging hardware, but I find it hard to believe that my physical 2018 3 (with EAP) will appreciate much, against a future Model 3 with improved 4680 cell tech, 500+ mile range, with improved hardware and features, that also has FSD, unless they're going to jack up the price of FSD to equalize the gap (which makes little sense, as it would run counter to Musk trying to make Tesla's more affordable). And that's assuming Tesla (or some 3rd party) won't roll out their own legion of dedicated robotaxis as a service, which would have a ton of leverage over my part-time taxi, as it's also my personal car.

FSD is cool, but if what Musk says is true, I might as well avoid buying a car altogether, and just pay a fare to be driven in someone else's Tesla when I want to go somewhere, lol. I don't have to bear the risk of insurance liability, maintenance, depreciation, inevitable future regulations (looking at Uber and Lyft), customer service, etc.

At the end of the day, I'll buy it when I see a better case for it. If it's truly worth what Musk says (100k), then there isn't an issue with waiting. If I'm even making thousands a year on an eventual FSD system, any savings from buying RIGHT NOW becomes unnecessary, as it's a drop in the bucket, relative to potential earnings. I'd literally be making money hand over fist, at any stage I eventually decide to go in.

 

[Siromnom]

Has anyone found it difficult to sell their car with FSD - especially on an SR+? I would love to recoup cost or even "make" some money on the sale but I struggle to envision a situation where I sell a car where FSD accounts for 20-30% (or more as time and miles goes on) of its value.

Part of the reason I got an SR+ was the range and price were perfect for our needs. I intend to keep the car for a substantial amount of time. At the time, FSD wasn't (an isn't) something that's a worthwhile expense (for us and how we will likely use the car). An option to transfer it to a future Tesla would be a HUGE perk and would be a big reason I would want to invest in it but I get the reasons why Tesla wouldn't do that...I won't repeat the cases already made.

My personal struggle thinking about it now is that FSD would make up roughly 20% or more of the value of my car. As range continues to improve on EVs, my lovely SR+ is probably going to be harder to sell...and tacking on hefty FSD would likely make that more difficult unless I find the perfect buyer. For me, and I presume others, I'll probably just wait to get FSD on our next Tesla and just eat the added cost...unless it get's to Elon's $100k fantasy.

Eagerly awaiting details on a subscription but am sure it's going to be pricey...

 

[kubel]

What other business would sell someone something once and let them transfer it for life, without some other hook in making money on it?

It's known as a perpetual license model and it's the way the majority of retail software has been licensed for decades. If you went to Best Buy a decade ago and grabbed a retail copy of Office 2010, you were buying an expensive perpetual license that could be transferred an unlimited number of times. Microsoft had no hook in making money on the transfer because you just paid the maximum price for a retail copy.

When OEMs started bundling software with their hardware, they negotiated more restrictive but less expensive non-transferable device or anchored licenses. So while the retail copy of Office 2010 Professional may have cost $350, that same software from an OEM only cost $100. You would get a discount for having a more restricted license since it was basically disposable after your hardware was retired.

$10000 for a non-transferable device license means the transferable license would be significantly more expensive- probably prohibitively expensive. More likely than selling a perpetual license, they will just sell a SaaS solution, and either pay-per-trip or pay-per-month, to make it as within reach to as many people as possible.

 

[bdub85]

It's known as a perpetual license model and it's the way the majority of retail software has been licensed for decades. If you went to Best Buy a decade ago and grabbed a retail copy of Office 2010, you were buying an expensive perpetual license that could be transferred an unlimited number of times. Microsoft had no hook in making money on the transfer because you just paid the maximum price for a retail copy.

When OEMs started bundling software with their hardware, they negotiated more restrictive but less expensive non-transferable device or anchored licenses. So while the retail copy of Office 2010 Professional may have cost $350, that same software from an OEM only cost $100. You would get a discount for having a more restricted license since it was basically disposable after your hardware was retired.

$10000 for a non-transferable device license means the transferable license would be significantly more expensive- probably prohibitively expensive. More likely than selling a perpetual license, they will just sell a SaaS solution, and either pay-per-trip or pay-per-month, to make it as within reach to as many people as possible.

I have a ton of experience in the software industry, and I'm part owner of a company that sells licensed software to end users. In my experience, the market loves the SaaS model that is priced off usage and commitment. It significantly lowers the barrier of entry and expands your potential market. A lot of people will see the 8-10k price tag and just immediately say no thanks. I think a lot more people will jump at the subscription option if it's reasonably priced.