Tesla is committing automotive suicide

800k paid subs in q4/2024, about the same in q1/2025, 900k in q2/2025, 1 million in q3/25, and 1.1 million in q4/2025.

Let's call that 100k growth per quarter in 2025, and currently at 1.1 million subs. They'll have to significantly increase their growth rate. The interesting modeling point is tesla car sales are dropping, down 9% to 1.6 million last year. All their new vehicles are capable of fsd with subscription, but thats only about 1.5 million a year (and likely to keep shrinking).

I think the only way they get good uptake is to make the price cheap, like $1 a month, with 12 free months but you have to give your credit card (ie fees that people don't notice scam like every streaming company). Even if every new buyer gets it, it would take many years at 1.5 million sales a year. Need 8.9 million more subscribers, 8.9/1.5 sales = ~6 years at 100% uptake. There are about 9 million current owners, but I'd guess at least 50% can't run current FSD code - they are on version 4.5 of their hardware (they recently released 4.5 in some new cars, and they have a major upgrade to v5 coming in a year or two).

There's no harm if they don't get to 10 million, because Musk shouldn't have that really large stock payoff as he's killing the company.

Step 1: > discontinu[e] the basic lane keep + adaptive speed cruise control

Step 2: Redefine "Full Self-Driving" to be those things. Charge 50 cents per month subscription or whatever.

Step 3: Get 10 million subscribers.

Step 4: 100 billion dollar payout! (Number pulled out of my butt)

I'll let you find the video, it's brutal. Allegedly caused by lane assist activating out of the blue when overtaking other cars.

[Citation needed] Cars had adaptive cruise control and lane keeping well before Tesla showed up.

As for the feature itself, we have a camper van on a 2024 Ram chassis. It’s a work truck at its core, with fancy RV bits added on. And it has ACC/lane keeping. It claims it will even park itself, though I’ve not tried.

So Tesla is now charging for features that your roofer got for free with her work van. Such luxury.

LKA existed well before Tesla HW1 released. Honda had cars on the road in 2003 with LKA systems. That's 11 years before Tesla HW1 was available.

It's paywalled unfortunately, but [1] is an illustrative Financial Times article discussing car manufacturer behavior in relation to Covid shutdowns and strikes. Many firms found the manufacturing shutdowns to be a boon: the winning strategy to accept it as a cost cut and just raise prices on existing inventory for above average financial performance.

My sense is that Tesla is now just taking that a step further by getting rid of their Fordist aspirations and applying the unarguably successful Apple model to the automotive industry. They don't want to mass produce cars and hope for X% conversion rate to software and services over time: they literally don't want customers who are not able or not going to pay for recurring software services. Software is where free cash flow comes from and free cash flow is where dividends/buybacks come from, which determines the value of an equity. That, of course, is why we get paid well.

I end with the disclaimer that obviously I don't believe the world should be meticulously and exclusively organized for the production of free cash flow, but I do think it's important to understand the logic.

[1] https://www.ft.com/content/4da6406a-c888-49c1-b07f-daa6b9797...

What? Basic lane keep and adaptive cruise control have been around a lot longer than Tesla.

Mercedes introduced ACC in 1999 (though Mitsubishi had an accelerator-only - could apply or ease off accelerator but not actively brake - in 1995).

Lane keeping was introduced again by Mitsubishi in the early 90s, though it was more 'lane departure warning'. But by 2000 Mercedes was offering it in some trucks and by 2003 Honda had it widely available in the Inspire with active lane keeping.

Wow that is diabolical and such a scam. I didn’t realize he was gaming the incentives this way. Is that what happened with that previous $54 billion package too?

(+) Except for the battery, but that's a very long term battle with very tiny steps.

Ford invested heavily in an in-house, highly optimized production pathway for the Model T. Other manufacturers sourced a lot of their parts from vendors.

This gave the Model T a great advantage at first, but they had a lot more trouble than competitors in coming up with new models. Ford ended up converging with the rest of the industry in sourcing more of their parts externally.

The lack of new Tesla models makes me feel like a similar pivot is what Tesla needs. My suspicion is that they probably need a less terminally distracted Musk to pull it off.

Well he knows more about manufacturing than anyone else alive on Earth, so he can't be replaced /s

(yes, he actually did say that)

"In the dormitories of the Jinjiang Group, the company hired by BYD to carry out the work, there were no mattresses on the beds, and the few toilets served hundreds of workers in extremely unhygienic conditions. The workers also had food stored without refrigeration.

The Brazilian Labor Prosecutor's Office (MTP) also accused the companies of withholding the workers' passports and keeping 60% of their wages; the remaining 40% would be paid in Chinese currency."

https://en.wikipedia.org/wiki/BYD_Brazil_working_conditions_...

It's hard for any company to compete with that (I hope they don't).

Their valuation was never justified by that. They always sold a fraction of what other companies do.

BYD is slapping every automaker around like a gorilla, and none can compete in a meaningful way.

Tarries mean they don’t have to. For now.

But competing with BYD would mean becoming "just a car company". And that's what Tesla can't do. Too many promises have been made, the stock's been pumped too high, and there is no way a just-a-car company can justify that market cap. Their only way is to go for the moonshot now. Maybe once the moonshot fails, stock goes down to "normal", and Tesla can compete with BYD.

So I wouldn't call robotaxi service unproven. But I would call the idea that you can claim to be running a robo taxi service without depots, cleaners, CSRs, and remote monitoring that can handle difficult situations in a more sophisticated way than each car having a human monitor it, naïve.

Moving to new, unproven markets is fruitful ground for someone like Elon to drum up expectation and hopefully keep distracting people from the fact that he's had very few recent successes to show for all the hype he receives.

Take FSD but multiply the number of actuators and degrees of freedom by at least 10, more like 100. Add a third dimension. Add direct physical interaction with complex objects. Add pets and children. Add toys on the floor. Add random furniture with non-standard dimensions. Add exposure to dust, dirt, water, grease, and who knows what else? Puke? Bleach? Dog pee?

Oh, and remove designated roads and standardized rules about how you're supposed to drive on those roads. There are no standards. Every home is arranged differently. People behave differently. Kids are nuts. The cat will climb on it. The dog may attack it. The pet rabbit will chew on any exposed cords.

We've all seen those Boston Dynamics robots. They're awesome but how durable would they be in those conditions? Would they last for years with day to day constant abuse in an environment like that?

From a pure engineering point of view (neglecting the human factor or cost) a home helper robot is almost definitely harder than building and operating a Mars base. We pretty much have all the core tech for that figured out: recycling atmosphere, splitting and making water, refining minerals, greenhouses, airlocks, and so on. As soon as we have Starship or another super heavy rocket that's reliable we could do it as long as someone was willing to write some huge checks.

And of course it's a totally untested market. We don't know how big it really is. Will people really be willing to pay thousands to tens of thousands for a home robot with significant limitations? Only about 25% of the market probably has the disposable income to afford these.

You'd have to go way up market first, but people up market can afford to just pay humans to do it.

- PDA sales are 0.01% of PC sales in 2006

I think musk knows you gotta take risks and skate to where the puck is going, not where it is now.

If he’s wrong, it’s all over of course.

Nothing about this stock has ever been rational

See 'reusable rockets' and 'having paralysed people control things with their minds' for other examples.

HN often seem to think there's Elon fans downmodding things but it seems more like a case of irrational hatred.

Musk seems to have successfully decoupled investors from results. The stock price seems to move far more based on what he says and does than what the company says and does. It's completely irrational. Tesla is a huge bubble.

In this space, Tesla does have competition (e.g. Rivian and Lucid), but nowhere near as much as they should.

I don't see this in Tesla.

Let's forget orbital mechanics for a while to make this answer more fun. It would follow me around and provide a dedicated, private lifeline of communication anywhere I go, real-time aerial surveillance of my surroundings, and eventually lasers to zap anyone who pisses me off.

Ummm that information seems terribly out of date or is just uninformed- Starlink alone is estimated around $8 billion for 2024 and projected around $12 billion for 2025, with continued growth.

You are spot on, it makes sense to have the Model 3 (economy sedan) and Model y (upmarket crossover SUV).

My question here is why did Tesla have four 4-person cars in the first place? If you wanted to streamline engineering and supply-chain why have Cybercabs instead of using the model 3 or model y as the base? Why split the company between Optimus and making cars?

Cybertrunk does make sense, it is a technology demonstrator and test article filled with all the new ideas and tech they are going to build into the next generation. They get data on people using it by selling it to them.

What you say is a sound strategy for Telsa to peruse, but they don't seem to be perusing it.

You must be a topologist.

Its like arguing the Honda CR-V is the same kind of vehicle as the Honda Odyssey.

The real question is why continue having the Model Y and the Model 3, when those are so incredibly close in dimensions. The 3 is only 2" smaller than the Y in length. Just kill the 3 and make a cheaper trim level of the Y. $10k more to have a 7" higher roof and more features in the base model.

I think you could wake up one day, read the WSJ with the headline "All Tesla cars ever sold have just exploded at the same time, killing hundred thousands of people" - and the stock price would surge 10%.

I really would like to know what the stock price would do if Tesla had good news. But I guess we'll never find out about that one... ;)

If you said 1 year okay I would believe you. But have you seen the advances in AI recently...? And the work done in robotics by other companies like Google and Figure? 5 years is definitely doable.

Has there been a single public video of an Optimus robot that isn't an embarrassment? Has there been a single public video of an Optimus robot performing a complex or precise task? No, scooping popcorn at the Tesla diner isn't a complex or precise task...it wasn't very good at that in the videos I saw either, and it seemed they only had it doing that job for a short amount of time. If we're that close to consumer robots, why isn't Tesla (or other Musk companies) increasingly using them internally? Seems like it'd be a great way to prove the potential while working through the kinks.

It'd be exciting if there was any actual detectable signal of a product worth buying.

Instead we have...this... https://www.youtube.com/shorts/bk91DpkdPQY

- New cars are subject to sales tax

- In some states (e.g., California), there are additional fees buried in DMV registration costs. California's Vehicle License Fee (VLF) is based on the depreciated value of the car. So newer and more expensive cars pay more to use the roads than do older cars. So the VLF is effectively another tax on new cars.

Cost of Goods Sold (COGS): As of late 2024 and early 2025, Tesla’s average cost to produce a vehicle dropped to an all-time low of under $35,000.

Gross Margin: Tesla’s automotive gross margin (excluding regulatory credits) has typically hovered between 15% and 18% recently. This means they earn several thousand dollars more per car than it costs them to build.

"Profitability" is a momentary property.

You could make ICE cars unprofitable by charging less than they cost to make too.