Will you buy FSD before the $1,000 increase on July 1st?

[Dan203]

Because you, not understanding the EA Sports situation and how much software industry in general differs from Teslas position in terms of marketing, decided it was an example that supported your argument.

So yeah, now that you've managed to hoist yourself on your own petard of supposing I don't have any relevant professional, industry experience, this indeed would be a good time for you to drop it as only serves to further sabotage your flailing argument.

Yeah because you sound like the real expert on the video game industry coming from a software development background from pre-windows 3.1.

You think you know more than you do, and I'll be happy to quote your post when I turn out to be right. Software as a service is the future. You don't see it because you're stuck in the past.

 

[Stickboy46]

The person at Tesla who is smarter than you has already made the decision: the price goes up to $8k in July and the subscription based model will cost more than buying it upfront.

Yes, just because someone works at X company makes them smarter than everyone else. Also I've never seen a company make a decision that ended up being the wrong financial decision .... Every company is always right in every decision they make.

 

[tmwell12]

if you have money to spend, why not!

 

[qdeathstar]

i wasn’t but now i guess i am. It’s not really worth it but there is something appealing about it none the less.

 

[SammichLover]

Yeah because you sound like the real expert on the video game industry coming from a software development background from pre-windows 3.1. .

-Started- then. Before you supposed I hadn’t done any software developermrnt, now I’m blinded by too much experience?

You think you know more than you do, and I'll be happy to quote your post when I turn out to be right. Software as a service is the future. You don't see it because you're stuck in the past.

BWHAHA

You think you’re arguing with me here but you’re still stuck down that rabbit hole now arguing with ghosts and your imaginings.

 

[Dan203]

Wow, lots of words, but no numbers to support anything you said.

Ummm... I don't see any numbers in your post either.

Again, people who buy the base model 3 are NOT the target audience for FSD. The targeted demographic spends much more thank $8k on upgrades, without having 50 pages of discussion about it. There’s a whole luxury ICE market they can poach customers from. There’s simply no need to cater to bargain buyers.

If that were true they never would have given the Model 3 the most advanced FSD computer they've ever developed. The hardware in the Model 3 is better then the hardware in the most expensive $100,000+ Model X you can buy today. And FSD is specifically being developed for the cheapest cars in their lineup, which seems silly if their goal is to only sell it to luxury buyers.

In reality their goal isn't to sell FSD to consumers at all. It's to start a robotaxi network that makes it unnecessary to own a personal vehicle at all. The reason they keep selling to consumers is to fund the development of that goal. And I think they've come to the realization that they can make more money for that purpose, with less risk, by selling as a service to more of their owners then as some future promise to a small minority of their owners.

I was genuinely having difficulty understanding why this is hard for some of you to understand. But I think the disconnect is that because it’s “just” a software update people are undervaluing the feature and think it should be given to them because the hardware is already installed. I doubt if Tesla would’ve made the sensors/cameras/software/etc. a separate install package we would be having such an extensive conversation about the price of FSD.

No it's because people who pay monthly aren't doing it for the same reasons as people who pay up front. You guys are looking at this like it's some sort of loan intended to spread the upfront cost over a few years of monthly payments. But if that's all you wanted to do then you would have just bought it upfront and rolled it into the car loan. I guess there might be a small subset of buyers who didn't get FSD when they purchased and would like to get it now but don't want to lay out $8k in cash, but I can't imagine that's a very large percentage.

I interpreted this announcement to mean it was going to be a monthly service that people could subscribe to, and unsubscribe from, at will like Netflix, or Office 360, or EA Access. And people are only going to be willing to pay an amount for a service like that that's reflective of the features being offered right now. The current upfront price is all based on speculation of what FSD will provide in the future, not what it offers right now. If they actually tried to charge people $8k for just what it offers right now, with no promise of future enhancement, I can't imagine many people take them up on it. Most of the value derived from FSD today is based on the promise of what it'll do in the future, and a little bit of speculation about future resale value. But for someone who's paying monthly all the matters is what it can do right now, and IMHO that's not worth more then about $30/mo. That's not to say they can't increase the price as time goes on and they add more features, but they can't expect monthly subscribers to pay for future features like upfront buyers do. At least not if they actually expect to get a significant portion of that other 70% to sign up.

 

[DrtyJrze]

Ummm... I don't see any numbers in your post either.

In my first post to you I added the link to the discussion that has all the math in it, lol. You should probably spend less time writing empty walls of text and take some of that time to research. Most of your talking points have already been discussed and dismissed.

Nobody cares about your theories. Show the numbers that support your position.

 

[DrtyJrze]

Yes, just because someone works at X company makes them smarter than everyone else. Also I've never seen a company make a decision that ended up being the wrong financial decision .... Every company is always right in every decision they make.

Dan was the one that said the person at Tesla was smarter than him. I just agreed.

Next time read the entire exchange and understand the context before you decide to comment. Since you missed it the first time, see below:

Someone inside the company who is much smarter than me, and with much better numbers, will ultimately decide the price they're going to charge. But I'm willing to bet right now that it's going to be much lower then a lot of you expect. Low enough that it's likely to upset a lot of people who paid for the full package.

 

[Xambler]

This might have been mentioned before but given that Tesla cost on a low end model 3 is likely under 30k...probably under 25k as battery prices drop so quickly, if fsd is ever fully achieved, the value of our cars with fsd isn’t going to be over 100k like Tesla implies...since they would just churn out enough robotaxies to cover the market themselves to rake in that secondary profit...why wouldn’t they?
in any case, I have FSD...that 7k was a stretch being retired, but I’m a retired geek so just had to take the chance. Don’t regret it as it is entertaining getting new features and experimenting with it...and the ability to let the car change lanes safely I’ve found invaluable while driving on busy 8 lanes of traffic at night and in the rain. I’ve wasted more money than that over the years on cable tv before I wised up 4 years ago and cut the cord.

 

[Dan203]

In my first post to you I added the link to the discussion that has all the math in it, lol. You should probably spend less time writing empty walls of text and take some of that time to research. Most of your talking points have already been discussed and dismissed.

Nobody cares about your theories. Show the numbers that support your position.

Seriously people on the internet think they know everything! When in reality you don't actually KNOW anything! You have your link to a thread with hundreds of posts, some claiming to refute my opinion, some that support it, and that's your "proof" that I'm wrong?

I never claimed to KNOW anything. I gave my opinion/prediction based on my personal experience in the software industry and how the software as a service model has progressed over the last few years. I admitted that I could be wrong, and even invited you to mock me if I was. But at this point, unless you work for Tesla and are ready to break some news, you're not able to prove anything.

In fact if you look at this with a little common sense, and even a mild understanding of human psychology, you'll realize that they can’t just take the current upfront cost, break it up into essentially 60 monthly payments (tacking on a little extra to make it "more expensive") and expect any significant number of the people who passed the first time around to suddenly subscribe. The vast majority of the people will have already done that math and those willing to pay it will have already rolled the upfront cost into their loan/lease. The only way to get a large percentage of everyone else is to make it cheaper and increase the value proposition. That’s how every other company that's successfully done software as a service has done it. The subscription is cheaper but they make it up in sheer volume and long term perpetual payments.

Now if Tesla does this they will undoubtedly upset some of the people who have already paid upfront, and will likely have to do something to placate those people. But in the scheme of things charging a larger number of people a smaller amount on a perpetual basis will net them higher profits then the model they're using now.

As for Elon's thing about increasing the price because eventually it'll be an appreciating asset... simple fix there... don't allow monthly subscribers to put their cars onto the robotaxi network or charge them a much higher % of the fare if you do allow it. That way buying upfront will still be the better option if you plan to turn your car into a business. (which I'm betting the vast majority of owners wont actually do anyway because who wants a bunch of random strangers in your personal car unsupervised?)

 

[DrtyJrze]

But in the scheme of things charging a larger number of people a smaller amount on a perpetual basis will net them higher profits then the model they're using now.

You're one of those people that sticks to their idea, even when it’s clearly demonstrated it makes no sense, lol. Please provide NUMBERS to show that model will work. I will give you a hint: Your monthly subscription price (or total subscription costs) will need to offset the $7k Tesla ALREADY receives at the current FSD take rate. I’ll wait...

For the 10th time:

Tesla.
Makes.
More.
Money.
Selling.
FSD.
At.
A.
Premium.
There.
Are.
Not.
Enough.
$30.
Subscribers.
To.
Cover.
The.
Difference.

I can’t say it any simpler than that. Unless the FSD take rate significantly drops this is the mathematical reality.

No need to write a wall of text with no numbers, again. Just show us the math.

 

[Dan203]

You're one of those people that sticks to their idea, even when it’s clearly demonstrated it makes no sense, lol. Please provide NUMBERS to show that model will work. I will give you a hint: Your monthly subscription price (or total subscription costs) will need to offset the $7k Tesla ALREADY receives at the current FSD take rate. I’ll wait...

For the 10th time:

Tesla.
Makes.
More.
Money.
Selling.
FSD.
At.
A.
Premium.
There.
Are.
Not.
Enough.
$30.
Subscribers.
To.
Cover.
The.
Difference.

I can’t say it any simpler than that. Unless the FSD take rate significantly drops this is the mathematical reality.

No need to write a wall of text with no numbers, again. Just show us the math.

Lets's assume Tesla has 100 customers.

In your scenario they make $7K/ea from 30 customers. (30%) So a one time payment of $210,000 regardless of how long those cars are on the road.

In my scenario lets assume 85% of customers subscribe to the service at $30/mo. So 85 cars paying $30/mo breaks even with your scenario at ~83 months, or a little under 7 years. After that...

they
make
more
money
for
the
remainder
of
their
lives
which
could
be
25+
years

I can't state it any simpler than that for you.

Oh and I forgot to mention no individual customer paying $30/mo will hit that same $7k in payments until a little after 19 years. So both more money for Tesla and less money for the individual customer.

Now they could accomplish the same thing by simply lowering the cost of the FSD package up front, but that would lower the perceived value of the feature, which Elon doesn’t want. (he actually wants the perceived value to be higher than it is now)

 

[Christmas Tree]

This is why TMC is crap; everyone has to prove that they are right.

 

[Dan44]

Nope, don't need it

 

[SammichLover]

Lets's assume Tesla has 100 customers.

In your scenario they make $7K/ea from 30 customers. (30%) So a one time payment of $210,000 regardless of how long those cars are on the road.

In my scenario lets assume 85% of customers subscribe to the service at $30/mo. So 85 cars paying $30/mo breaks even with your scenario at ~83 months, or a little under 7 years. After that...

they
make
more
money
for
the
remainder
of
their
lives
which
could
be
25+
years

I can't state it any simpler than that for you.

Oh and I forgot to mention no individual customer paying $30/mo will hit that same $7k in payments until a little after 19 years. So both more money for Tesla and less money for the individual customer.

First off, a sure sign that you're a babe not operating in the realm of reality is a lack of opportunity cost in your calculations.

An arguably bigger issue is, that you're getting so close to yet seems to elude you, probably because of being a babe...

Now they could accomplish the same thing by simply lowering the cost of the FSD package up front, but that would lower the perceived value of the feature, which Elon doesn’t want. (he actually wants the perceived value to be higher than it is now)

So why don't they just bundle FSD in and tack on $2400 ($8000 * 0.30) to every new vehicle sale? And as the value increases, they just keep jacking that price at $300 every couple quarters, or whatever?

Because in the real world that hurts sales of the base vehicle.

Even when you can get buyers to the point where it has to be included they start mentally (for good reason) bundling it in even when they pay per month.

The problem here being the large gradient in the subjective value of these particular features. They just aren't [judged to be] worth the same amount by everyone. For reasons solid, and less so.

Otherwise, hey, why not sell game consoles with a bundle of all video game titles you could ever buy on it? Why don't you see that out there? Outside of those "console in a a controller" products that have ROM dumps of ancient arcade games (AKA selling the really, really long tail on that software)?

 

[azred]

We have enhanced auto pilot now. What capabilities are we missing out on now? What in the future we will miss out on?

We had EAP on one car and AP on the other until Spring 2019. We purchased FSD when the price was briefly slashed a year ago. Currently, I would be fine having just EAP, but I wasn’t thrilled with the lack of lane change capabilities in AP.

Even though Elon said there would be no more slashed prices for FSD like last Spring, I bet that will change as FSD becomes “feature complete.” The blowback from last year’s sale was mostly from customers who paid big bucks for FSD up to 2.5 years earlier and had received no features above EAP. That was a pretty crappy situation but will no longer be an issue when FSD is feature complete (this year? this decade? this century?) If I was you I would wait, but I am happy with my decision to buy during the FSD sale last Spring mostly because I plan to keep both cars for at least ten years.

 

[DrtyJrze]

Lets's assume Tesla has 100 customers.

In your scenario they make $7K/ea from 30 customers. (30%) So a one time payment of $210,000 regardless of how long those cars are on the road.

In my scenario lets assume 85% of customers subscribe to the service at $30/mo. So 85 cars paying $30/mo breaks even with your scenario at ~83 months, or a little under 7 years. After that...

they
make
more
money
for
the
remainder
of
their
lives
which
could
be
25+
years

I can't state it any simpler than that for you.

Oh and I forgot to mention no individual customer paying $30/mo will hit that same $7k in payments until a little after 19 years. So both more money for Tesla and less money for the individual customer.

Now they could accomplish the same thing by simply lowering the cost of the FSD package up front, but that would lower the perceived value of the feature, which Elon doesn’t want. (he actually wants the perceived value to be higher than it is now)

...

That’s your response? Dan, you’re financially illiterate. Period. Thanks for posting though.

For everyone else with at least moderate critical thinking ability, this post can be used as an example of why a “low“ subscription service isn’t possible without destroying Tesla financially.

I’m done with that convo.

 

[LM-5]

There seems to be a large gap between our perceived value of FSD and Elon’s. Is it marketing and overconfidence? Or is it because he’s cruising around in his Model S with the latest and greatest, which we haven’t seen yet?

At any rate, I purchased FSD on my Model 3 and have it on my Model Y order. I wanted to future-proof the cars as much as possible and I enjoy playing with new functionality as a hobby. Everyone has their own reasons either way.

 

[Knightshade]

Lets's assume Tesla has 100 customers.

In your scenario they make $7K/ea from 30 customers. (30%) So a one time payment of $210,000 regardless of how long those cars are on the road.

In my scenario lets assume 85% of customers subscribe to the service at $30/mo. So 85 cars paying $30/mo breaks even with your scenario at ~83 months, or a little under 7 years. After that...

Unless all 85 are required to remain subscribed for significantly LONGER than the break-even ~83 months your math makes 0 sense for Tesla as a company.

Because otherwise some significant # of those customers (arguably most of em) will only pay for it 1 or 2 months a year when taking a road trip or something.

Meaning Tesla likely never even break even.

That's apart from the fact "Taking 83 months just to break even with the method you use today to get all the $ upfront" is a stupid move too. (See again opportunity cost... $7000 NOW is worth a LOT more than "$7000 after 83 months"

And you already told us that a subscription where you're forced to pay the whole price broken into monthly payments is No Good because those people would've just rolled it into the purchase of the car.


So... nothing you've presented adds up or makes much sense.

(plus the fact Tesla has explicitly stated the subscription they offer will be MORE EXPENSIVE than if you bought it outright... and it seems unlikely they meant "after 20 years of it" when they said it)

 

[JimBob 909]

I am considering purchasing a Tesla 3 and not sure why I would not buy the FSD too? Kind of is one of my points of buying a Tesla is the tech and how it improves. I think I would need FSD to do that and get the most out of what Tesla offers.

That's why we bought FSD in our MS in Sept., and am happy to have it. But...if I buy a second Tesla, I see no need for it. The MS will be the road car and long range trip mobile with free supercharging. A second Tesla will be an around town environmentally clean commuter.