Just How Much Is FSD Worth?

How Much Is FSD Worth?


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#21
Gene Munster, who was a very well regarded Apple analyst for many years, recently estimated that Model 3 owners who put a self driving Tesla on the Tesla Network would earn an average of $7659/year in income after electricity, insurance, maintenance, depreciation, etc. He assumes Tesla keeps 10% of that, so the owner would earn about $6900/year.

That would basically cover the lease payment so you would essentially get a free car (assuming FSD at current price of $3K plus $5K for EAP). Not too shabby.

But this assumes the car is only on the network 6 hours a day less than half the days of the year (170 days). Munster also does a calculation for a car on the network basically full time -- 12 hours per day, 320 days per year -- and estimates it would generate $32,032 per year in income. He does this calculation for a hypothetical Tesla corporate fleet so for a private car you would have to subtract whatever portion is shared with Tesla -- if that's roughly 20% call it $25,000/year in income to the owner.

So how much is FSD worth? When operated in a network, easily tens of thousands of dollars. For an individual driver who does not want to share his car with the network, much harder to value.

(This is value -- I think Tesla will want to build its network as fast as possible so it will likely continue to offer FSD relatively cheap so that as many people as possible buy and use it.)

Munster's analysis is here -- http://loupventures.com/teslas-multiple-billion-dollar-ride-sharing-opportunity/ --
his calculations are at the link toward the bottom of the page.
One problem with this is it assumes no competition from other autonomous ridesharing. This is about current UberX pricing. Its not sustainable with a human driver but with competition prices will go down. I think Tesla will take a much bigger cut and will spend a lot providing necessary support and infrastructure for the network. Uber takes like 25% and doesn't make money. Tesla will have to provide similar infrastructure or maybe more.
 
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#22
One problem with this is it assumes no competition from other autonomous ridesharing. This is about current UberX pricing. Its not sustainable with a human driver but with competition prices will go down. I think Tesla will take a much bigger cut and will spend a lot providing necessary support and infrastructure for the network. Uber takes like 25% and doesn't make money. Tesla will have to provide similar infrastructure or maybe more.
The exact pricing and Tesla's cut obviously involve some guesswork but even if the estimates are off by a significant amount the car could still generate thousands to tens of thousands of dollars per year for the owner depending on how often it is in the network. In terms of pricing, with Munster's numbers Tesla would be offering something like an uber Select experience for less than the price of an uberX experience, which is about $1/mile for the mileage charge but also includes other added charges (initial fee, service charge, per minute charge) that make the actual average fee per mile higher. http://uberestimate.com/

 
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#23
The exact pricing and Tesla's cut obviously involve some guesswork but even if the estimates are off by a significant amount the car could still generate thousands to tens of thousands of dollars per year for the owner depending on how often it is in the network. In terms of pricing, with Munster's numbers Tesla would be offering something like an uber Select experience for less than the price of an uberX experience, which is about $1/mile for the mileage charge but also includes other added charges (initial fee, service charge, per minute charge) that make the actual average fee per mile higher. http://uberestimate.com/
I'm not trying to throw a wet blanket on this because I'm really excited for this. But economics won't allow people to buy a car for $35k and passively make $20k a year. Otherwise we'd all buy a bunch of Model 3's and retire.
 

Dan Detweiler

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#24
So am I reading these comments correctly? Seems like most people are seeing the biggest benefit as being the possibility for ride-share type applications. Anybody see other value?

Dan
 
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#25
I'm not trying to throw a wet blanket on this because I'm really excited for this. But economics won't allow people to buy a car for $35k and passively make $20k a year. Otherwise we'd all buy a bunch of Model 3's and retire.
In the long run I agree prices would come down. In the short run when there are not enough FSD vehicles on the road and there is a demand/supply mismatch that's another story. (For sake of clarity Munster assumes a $60K vehicle, which is equivalent to a Model 3 with LR/PUP/EAP/FSD etc., but I think your comment still applies).
 

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#26
Anybody see other value?
Personally I can't see myself putting any of my cars in a ride sharing network but will likely be a user. Despite that I will very likely get FSD at some point for a number of reasons. To be one of the first with revolutionary technology. It should be safer, less stressful, and more relaxing. To use when I shouldn't be driving after drinking or while tired. To eliminate the need for a second car. May also take more road trips instead of flying but that one hinges more on @John getting that self driving RV out there.

In the short run when there are not enough FSD vehicles on the road and there is a demand/supply mismatch that's another story.
Good point. I suppose they could decide to try to make it so appealing that the majority of Tesla owner do it to try to gain all of the marketshare while everyone else is scaling up and to drive demand for their cars. Timing would have to be right though.
 

Soda Popinski

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#27
The promise of FSD is the driving reason I'm getting a Model 3. So, I guess I'm willing to pay $35,000 + $8,000 for it. But, while I'm at it, might as well get the LR and PUP...

How much is 2 extra hours a day of life I'll sort of get back?
 

ng0

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#28
So am I reading these comments correctly? Seems like most people are seeing the biggest benefit as being the possibility for ride-share type applications. Anybody see other value?

Dan
I'm so so so excited about the idea of FSD. Like others, I can't imagine putting my new model 3 on a ride sharing network (though maybe I'll change my tune when it gets older). I drive at least a half hour each way to work and back when there's no traffic and sometimes as much as an hour and a half total. To get to sit back and relax/sleep/play games/chat with people/etc for that amount of time each day with no loss of productivity or concerns is priceless!