GalacticHero
M3-AWD+
This is also my fear. They'll wait for the number of cars with purchased FSD to get low enough to absorb the costs of canceling, whether those costs are buyouts or lawsuit settlements.
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No. It's not available for investment as it's not realized on the balance sheet. Think of it like money placed into an escrow account that's only realized when the product or service is released to the customer.
Weird hypothesis that Tesla would raise the FSD price so there will be very few buyers. If Tesla did not want people to buy the product, they could very simply just stop selling it. They are not committed to continue sales and could stop them at a moment's notice. If they still want revenue with no further commitment, they could permit subscription sales only. Easy, with no need to play silly price games to 'discourage' sales.
I expect Tesla will ultimately discontinue FSD outright purchases in favor of subscription-only model. Not because they are giving up, but to ensure the continuous revenue stream that is needed to pay for FSD ongoing development and support. Many products use this model.
In the current state, I would NOT pay for it again, not even if it was only $1k. I would beta test it for free. Would only deal with maybe a month, tops, of the safety score game.
Now if it came out and proved itself to be legitimate, making decent decisions, not require me to jerk off the steering wheel, and not watch me watching it drive. I would consider spending $10k max on it.
Edit: after all, it’s just a piece of software, it’s not revolutionary or a game changer by any means, especially with other manufacturers slowly catching up. It’s hype has worn off, at least for me.
Now if it came out and proved itself to be legitimate, making decent decisions, not require me to jerk off the steering wheel, and not watch me watching it drive. I would consider spending $10k max on it.
Edit: after all, it’s just a piece of software, it’s not revolutionary or a game changer by any means, especially with other manufacturers slowly catching up. It’s hype has worn off, at least for me.
Tesla like every other manufacturer will nickel and dime consumers to death. And subscription sales for FSD would take over 6 years to get the same revenue purchased FSD at $15,000 would get them. So of course they would drag it out and keep raising the price because there are people that will still pay it. Then when it reaches a point of no income from sales of FSD subscription only will dominate, costing customers even more in the long run especially if they have to pay for hardware upgrades. It's always about the money and Tesla is no different.
Tesla knows that, without FSD, they are ultimately just another car manufacturer. Once Ford, GM, Toyota, etc. get their act together (and they will), then non-FSD Teslas will be competing with a lot of lower priced cars offering high power motors and extended ranges. Giving up on FSD is giving up on the auto business.
Not quite accurate. Deferred revenues can be used in the same way any other funds the company has access to. They are not just reported as revenues yet.
In practice, collecting (say for the sake of discussion) $2B of deferred revenues from FSD sales, Tesla would need to loan $2B less from other sources to fund it's operations. It is great, due to 0 interest for the capital. It is also risky: If it turns out one could never realize those revenues and would need to refund the customers, Tesla would need to finance refunds somehow.
So no, FSD sales are not sitting on an escrow account.
Not really. Just being an electric vehicle is in itself appealing because of less maintenance, quicker acceleration, zero pollution and it could still have Autopilot and all it's safety features, just not FSD. Tesla has been doing fine without ever releasing a feature complete FSD.
I would not discount their clever go-to-market strategy and channel, brand, or manufacturing expertise. Elon has been simply a genius in capital efficiency and how quickly they have built all of these. FSD is not the only competitive edge they have.
Other manufacturers are developing battery technologies, scalable EV platforms and self-driving tech. Some could even argue that Tesla has lost their leadership in each of these areas. I believe that Tesla is still unique leader in end-to-end in-house ownership of the car business when looking the full holistic picture.
Also, Tesla is clueless in at least one aspects of the business: customer service. This can deeply harm the brand and limit sales then the market demand cools down.
Everyone is getting into the EV game. Today they have an advantage, but tomorrow there will be a lot of competition.
I doubt other companies would put that much effort into Tesla FSD like promised features if Tesla gave up on FSD. Driver assist features are good enough. The competition will be with the battery technology for faster charging and increased range.
I wasn't giving an accounting lesson - I was describing it to laymen, which is why I said "think of it like..." since most people know what an escrow account is.
There are plenty of companies working on AV technologies. If Tesla were to go away, they would continue. You may think that driver assist is good enough, but as one example, the US has an aging population that would benefit greatly from L4/L5 vehicles.
Obviously older folks would benefit greatly from autonomous vehicles and so would everyone with a cancer cure. But no large company is truly about helping people, it's about making money. And if what they are doing costs too much to continue, then they will end it.
L4 self-driving is one of the greatest business opportunities available right now: Companies shipping L4 in scale will capture the value left by millions of professional human drivers who will be left without a job. Gloomy or a goldmine - depends on the perspective.
So yes, regardless if Tesla pursues or succeeds in delivering FSD, there is an ongoing gold-rush.
I never wanted a robotaxi. I just wanted a really good driver assist system. I don't feel like I want to be an early adopter of renting out my car. A really good L2 system that can drive local streets and highway would be worth $5k to me. IMO people on the fence about paying $15k for FSD should just put that money toward solar panels, or converting their home HVAC from fossil fuel to heat pump.
I got EAP with my first production Model 3. I added FSD later for $2k. I'm in the FSDb program. All this was worth it to me. If I get a new Tesla, I will subscribe to FSD once FSDb code branch is officially part of FSD.
I got EAP with my first production Model 3. I added FSD later for $2k. I'm in the FSDb program. All this was worth it to me. If I get a new Tesla, I will subscribe to FSD once FSDb code branch is officially part of FSD.
TigerNinety
Member
I know I've mentioned this elsewhere, but seemingly not here: when you think about shelling out $12K for this software, better make sure your insurer will cover its replacement, if your car is totaled. Ours was, and we got no value for the software. So, you could easily buy a Tesla with FSD installed, get totaled coming out the parking lot, and be out $12K. (FWIW, we got FSD on a CPO Tesla on a car that was at a price I'd have been happy to buy without it; it was a bonus.)
On an only tangentially related note, I'm still not clear about how many people who spend $72K on their car (with FSD) are actually going to rent it out as a robotaxi. Personally, I'm not sure I'd EVER do it, but I'm pretty sure I wouldn't do it until I knew it could do things like avoid pot holes and other things like that. Even then, how many hours per day does this thing need to be abused by random people to make it worthwhile?
I wouldn't be surprised if Tesla's approach is the best way to get to this future, but I'm pretty sure that most FSD beta testers are paving the way for a future in which Tesla is the disproportionate beneficiary of the two.
On an only tangentially related note, I'm still not clear about how many people who spend $72K on their car (with FSD) are actually going to rent it out as a robotaxi. Personally, I'm not sure I'd EVER do it, but I'm pretty sure I wouldn't do it until I knew it could do things like avoid pot holes and other things like that. Even then, how many hours per day does this thing need to be abused by random people to make it worthwhile?
I wouldn't be surprised if Tesla's approach is the best way to get to this future, but I'm pretty sure that most FSD beta testers are paving the way for a future in which Tesla is the disproportionate beneficiary of the two.
Also not interested in robotaxi to make money, but a robotaxi to cart me around is a different story.
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