Tesla FSD Licensing and Pricing for Maximum Adoption

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Tesla FSD pricing and licensing strategies for maximum adoption.

1. Allow OEM to integrate it into any car for free or at cost. Car owner pays for FSD license

2. Active safety & basics comes free

3. Leverage Supercharger deals. Offer same pricing as Tesla cars for EVs that integrate FSD hardware & share data

The hardware needed to run fsd. Will Tesla sell that the oem

The goal is to leverage the NACS standard as a trojan horse to dominate the entire auto industry.

Once they have an FSD computer in their car you can start selling them Tesla Insurance, premium connectivity etc.

FSD Pricing – Temporary Price Discounts

Existing US fleet:
– ~2.5M vehicles, currently at a 15% FSD attach rate.
– Assuming a 10% increase in attach rate from the free trial, with a mix of $199 monthly subs and one-time $12k purchases
– The implied EPS uplift is $0.30/share, equating to 10% of the consensus FY24 earnings per share of $3.

New vehicles:
– Assuming 2M unit sales and US FSD attach rate increase to 25%
– The implied EPS uplift is $0.20/share, or 6% of the FY24 EPS.

Attach rate >>> pricing/ near-term profits:

For $TSLA, prioritizing the adoption rate over pricing is essential. Unlike most other technologies (ChatGPT included), FSD has no current or foreseeable competition. It has a ton of pricing power in the mid to long-term, but customers need to be locked in.

Without discounts (on the above math), US will have 0.8M FSD subscribers (out of 3M+ units) by the end of this year.

At an assumed 50% discount (with the same bottom-line impact), FSD subscribers could hit 1.5M.

Nextbigfuture’s 2024 Catalysts for 2024 Are Mainly FSD Focused