Why are people willing to pay $15,000 for Tesla’s FSD?
I have no idea. Some of it is Tesla enthusiasm, no doubt. Some of it is just some really weird, strange, inexplicable market weirdness - because people aren’t willing to pay anything close to that when buying FSD on the used car market, but some people are still willing to pay $12K to have TSLA turn it on for a used car:
Analysis of used party Tesla sales shows results are all over the map. Some buyers will pay more for FSD cars, and it is reported that they sell for an amount that’s about 25% of the price to add FSD to either a new or used car — under $3,000. It is not unusual to see Teslas on the used market selling for a very similar price with or without FSD. This has led the various companies which provide estimated values for used cars to add modest value for the option. A query of the Kelly Blue Book on a 2020 Tesla Model 3 SR+ with 20K miles shows a difference of $4,300 for the $12,000 option. This is striking when some people are buying used Teslas without the package and then paying Tesla the full $12,000 (soon $15,000) to enable it, yet others are getting lucky and finding a car which already has it for a very modest premium.
https://www.forbes.com/sites/bradtempleton/2022/08/31/tesla-…
But FSD isn’t Level 5 autonomy. It’s Level 2. It’s not clear that they’re getting any closer to even being able to offer Level 3 autonomy using their FSD framework, even as other brands are rolling out Level 3 (and pilot-testing Level 4) systems:
But with this price hike, is it any closer to Level 3 systems currently being rolled out by other automakers? A few days ago Tesla CEO Elon Musk said it was his goal to see FSD in wide release by the end of 2022, once again promising Tesla vehicles would be capable of "self-driving."
But the system, still considered to be Level 2 by industry experts (as is Tesla's Autopilot), does not appear to be on its way to becoming Level 3 or Level 4 with its current suite of hardware and software, which permit users to completely divert their attention from the road for minutes or hours at a time, while the earliest cars with FSD that buyers bought years ago are getting older.
https://www.autoweek.com/news/technology/a41091584/tesla-ful…
Tesla (and Musk) have stopped making promises about what FSD will be able to do, or any assertions that FSD will get beyond Level 2 in any specific time frame. There will be several commercially available Level 3 systems on the market from other automakers in the next two years, apparently at closer to a $5K price for the option:
https://www.autoweek.com/news/technology/a39485558/mercedes-…
…which may concentrate Tesla’s position on this a little bit. As the Forbes article points out, FSD is a nice option play for Tesla - they’ve “pre-sold” a super-expensive software package that doesn’t exist yet, and if they can build (or buy) a product that actually does what they previously claimed, they can get a lot of money. And if they don’t manage to deliver it, they can just refund the money that people paid. They’ve been able to do that for the last 5-6 years or so, but as Level 3 systems come to market, they might have to change that strategy.
In any event, FSD isn’t close to Level 3 yet - let alone Level 5 autonomy. I have no idea why people are paying so much for it, other than some combination of brand enthusiasm and FOMO.
Albaby