To The Moon

Tesla’s Full Self-Driving option has long been a promise to buyers of an autonomous future: years after being introduced, what’s become of the value of Full Self-Driving? We could start extrapolating value by looking at the functionality of Tesla’s Full Self-Driving Capability option, which has evolved but not at the anticipated pace where 2019 or 2020 would have been the year of ‘robotaxis’. Every Tesla today comes with base Autopilot, which is the bread-and-butter semi-autonomous feature that Tesla is known for offering: Autopilot enables active cruise control, keeping distance from the car ahead, as well as Autosteer which keeps the car automatically centered in its lane. While magical when combined together, that’s the full capability of Autopilot on its own. Tesla buyers have to upgrade to Enhanced Autopilot, which is available as a $6,000 option either at time of delivery or after delivery via an owner’s Tesla account to add the rest of Tesla’s current semi-autonomous feature suite. Enhanced Autopilot adds Navigate on Autopilot, which navigates highways by strategically taking exits, Auto Lane Change to change lanes when prompted, Autopark for parallel and perpendicular parking, Summon for moving a car out of a parking spot, and Smart Summon to optimistically meet a Tesla owner at an entrance. These are all building blocks to Full Self-Driving that don’t yet form a cohesive whole on the path to autonomy. The promise of Full Self-Driving comes with Tesla’s Full Self-Driving Capability, a $15,000 option which includes all of the features and functionality of Autopilot and Enhanced Autopilot — the rest is limited. The only production feature added with Full Self-Driving Capability is Traffic Light and Stop Sign Control, which recognizes traffic lights and stop signs with potential for the vehicle to alert owners and brake as a backup safety feature. There had been one major addition to Full Self-Driving Capability in November of last year: every Tesla equipped with the feature can choose to participate in the Full Self-Driving Beta, which is essentially a big deal. Remarkably, a wide Beta release of Full Self-Driving enables the premise of Full Self-Driving where an owner can input an address and have the vehicle travel to it by following the navigation partially autonomously. Caveats remain that it’s a Beta, therefore it’s not finalized with the potential for mishaps, and thus requires owners to supervise the system at all times. Realistically, the Full Self-Driving Beta is still level 2 autonomy with the goal of approaching level 4 optimistically as soon as this year. Nonetheless, it could be a while before we see level 4/5 Full Self-Driving. Tesla will add next-generation hardware to cars this year, including possibly a new radar module and a more powerful computer, which could enable higher-quality Full Self-Driving. Per Tesla’s promise to owners, current cars will benefit from a similar level of Full Self-Driving whether a hardware retrofit is required or not. That’s perhaps one additional benefit of having Full Self-Driving today: any hardware necessary to make it happen is included in the cost of the option. Otherwise, Full Self-Driving has one pressing issue: it carries a value of $0 with many of the most-commonly-used automotive valuation services. This correlates directly to the wholesale auctions that dealers use to acquire inventory: the value of Full Self-Driving has become negligible. That may just be due to the amount of confusion surrounding it. While there are features that exist in Enhanced Autopilot as well as an open Beta, Full Self-Driving in itself is not available. Tesla’s latest price cuts of up to $13,000 on Model 3/Model Y and $21,000 on Model S/Model X may just lead cadence towards a more convenient option: Full Self-Driving as a subscription. A Full Self-Driving subscription is currently-available at a price point of $199/month for vehicles only equipped with base Autopilot, or $99/month for vehicles that are already configured with Enhanced Autopilot. Tesla buyers have to stay within MSRP limits to qualify for the renewed decade-long tax credit, making a subscription even more attractive. Like the price of Full Self-Driving as an option, subscription pricing is expected to increase as more functionality becomes available. As any owner can add the functionality, it devalues it as an option: owners can’t expect to recoup the full cost of Full Self-Driving at resale time. Frankly, depreciation within Tesla’s own inventory lends itself to half or less of the initial option cost. All factors are pointing towards a preference for a subscription potentially being the future of Full Self-Driving. Therefore, the value of Full Self-Driving as an option is comparatively minimal today — and that won’t change until subsequent levels of autonomy are achieved. __________________