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Tesla Network

Tesla Network

It appears the cars returned after leasing will be used in the ride sharing network. We plan to use our M3 in the Network; extra money is nice.

https://www.teslarati.com/tesla-autopilot-on-every-car-full-self-driving...

Iwantmy3 | 12/04/2019

For that to work, they would have to have level 5 fully autonomous self-driving proven out and approved for use by state governments within 3 years. I am sorry, I don't see that happening.

Mike83 | 12/04/2019

Many don't' want it to happen but Tesla has proved the many wrong. They will never make a profit but the last two quarters they did. They will never have Nav on EAP and it works perfectly now. There are already 29 States where self driving is legal.

bpaul | 12/04/2019

Count me among the people who scoffed when they said you couldn't keep your lease because of the ride-sharing network.

Elon has been quite clear about his judgment that more, faster decisions are better than fewer, slower decisions. Given that, counting on any of their specific plans to come to fruition more than a few months out seems like a bad bet.

kevin_rf | 12/04/2019

I wouldn't go far as to say NoAP is perfect, I still find myself switching off on the highway in areas I don't want to playing hopscotch in the lanes.

andy.connor.e | 12/04/2019

I would probably be willing to let it be a part of the network during the hours of 9am-3pm. we will see what kind of return value that has, because if significant enough, could make the vehicle affordable for those like me who cant afford it today.

Mike83 | 12/04/2019

I know what your saying andy. The inside camera will keep an eye on travelers and I understand Tesla will take care of the billing and such like they do for Supercharging. There is supposed to be ratings for people who are allowed to use Tesla Network and the owner can decide who gets to use it.
People going to airports, hospitals, doctors, shopping, etc. would find it very convenient and cheaper than owning a vehicle.

beaver | 12/04/2019

Tesla network won’t happen for years, Musk will change his mind and allow people to keep their lease cars at the end for a price. I am glad they won’t lease my LR RWD, leases ALWAYS reduce resale value.

Mike83 | 12/04/2019

Forgot to add I am in no hurry but believe this will happen within a year or so. If I can make $50-100/day for 20 days a month I would be very happy.

CCIE | 12/04/2019

@Mike83: You think Model 3s will be driving autonomously (level-5) in about a year? Tesla even close to technically making that happen, and it's debatable if the sensor suite on the existing cars is sufficient to ever let it happen? That ignores the regulation changes that would be needed.

andy.connor.e | 12/04/2019

At $50/day, the Tesla could pay for itself for that month in only 17 days.

kcheng | 12/04/2019

"bpaul | April 12, 2019
...
Given that, counting on any of their specific plans to come to fruition more than a few months out seems like a bad bet."
It's a Silicon Valley philosophy, "go fast and break things", or "move fast and break things". Which is fine if you're a software startup, but a little more concerning when you're talking about self-driving.

bpaul | 12/04/2019

@kcheng, yes.

I sense that Tesla's commitment to safety is genuine and aligned with self-interest. That's why we're not going to see the L5 autonomy any time soon.

Perhaps what Tesla really intends is for the "Tesla Network" to be a Turo-like or GetAround-esque competitor. Users would require driver's licenses and be responsible for the vehicle.

Bighorn | 12/04/2019

Maybe they'll just lay them around the city like electric scooters. Viable business model with no need for autonomy.

Carl Thompson | 12/04/2019

@Mike83:
"If I can make $50-100/day for 20 days a month I would be very happy."

You won't. For that price Tesla could buy 5 or 10 of their own cars. (Assuming they can buy one of their own cars for average cost of $300 / month == $10 / day over its usable life in the Tesla Network.)

Why would Tesla pay you 10 times more than they would need to pay themselves and in addition incur the huge logistics and paperwork overhead cost of dealing with you?

That is a serious question. Answer it if you can.

Mike83 | 12/04/2019

@andy.connor.e

Another thing is when one drives to work the car could be used for 8 hours and returned to owner. People scoff but they did with Tesla some time ago and were disproven but they will never admit it. They just double down on scepticism.

This will be needed. It has been in development for some time.

https://www.iflscience.com/technology/watch-elon-musks-moving-solid-meta...

Carl Thompson | 12/04/2019

The Tesla Network is a scam which has the sole purpose of convincing foolish people that are on the fence to buy a car thinking Tesla will kindly help them make the payment.

The only way it would make financial sense for Tesla is if using _your_ car costs them _less_ than it would to buy a car from themselves. That likely means less than $10 for a solid 24 hours. No thanks.

Mike83 | 12/04/2019

Carl. Sorry but don't have time for your hypotheticals and don't wish to converse with you.

Carl Thompson | 12/04/2019

The mention of the Tesla Network also could have the secondary purpose of spurring more FSD sales by attempting to create this thought process: "If Tesla is planning to implement the Tesla Network in just a few years that means that FSD will be a real thing in a few years. Therefore I should go ahead and buy it now."

I'm so certain this is BS I'll make this promise. If

1. the Tesla Network exists in 3 years (2022), and

2. The average owner can actually make Mike83's $100 on it by lending out their one car to the Tesla Network on the average day of the year, and

3. The owner can do other things an doesn't need to be there to drive (or provide someone else to drive)

If those things come to pass I will pay @Magic 8 Ball $1,000 and publicly serenade him with the "I'm a Little Teapot" song and dance in the Bay Area spot of his choosing.

M3BlueGeorgia | 12/04/2019

@beaver
Tesla are offering 3 year leases, so the implication is they expect to have a Tesla self-rental network in 3 years.

It seems possible in most driving conditions in most of USA by then
For example: By then California might be possible all year round, but Chicago in winter probably not.

ebiggs | 12/04/2019

@Carl Thompson

"That is a serious question. Answer it if you can."

I'll give it a shot.

1. With you they already made a margin of profit selling it to you (buying it from themselves at cost does not give them any profit)

2. You provided financing, buying it from themselves at cost would require raising capital.

3. You provide maintenance, garage, charging, cleaning, that's all costs and logistics they'd otherwise have to cover.

4. Instant scaling out of the Tesla Network to anywhere their customers are. It otherwise would be a much slower rollout while they figure out (3) on a regional basis.

5. Business model. If you can sell a helluva lot more cars than your competition at a bigger margin because revenue from the Tesla Network is an attractive feature, then this could result in tons more car sales at great margins... which may or may not be the smarter business plan. They are now a car manufacturer, they are not yet a Transportation as a Service company. They now compete with GM, Ford, Toyota, etc... all of which need profits to survive... if they were a Taas company they'd be. competing with uber, lift, etc... all which do not yet need profits to survive.

Mike83 | 12/04/2019

It is intriguing that Tesla is offering no buy back leases with longest least at 3 years so they get the cars back for the Tesla Network. In the beginning it might work like Uber with a driver present and common routes used.
I checked on Waymo which doesn't have FSD and it is valued at $175 Billion and doesn't make cars or batteries while Tesla is valued at under $47 billion. The AI genius working for Tesla with the new chip is in production already; his name begins with a K.
This move by Tesla is probably misunderstood as the BS articles concerning Panasonic and batteries. I read also that Fiat/Chrysler could pay around $1billion to Tesla for EU carbon requirements.

Carl Thompson | 12/04/2019

@ebiggs

You list some slight potential (and some questionable) benefits of using owners' cars for the Tesla Network.

But you fail to address why in the world Tesla would pay roughly 10 times more than they need to just to get those benefits. Especially when you factor in the greatly increased logistics costs!

beaver | 12/04/2019

@M3BlueGeorgia yes Tesla has 3 years but I don’t think the cars will be driverless in 3 years.

A bigger issue for Tesla I think is dealing with carrying the cost of the leases, i.e. finance hit. Will Tesla find a 3rd party or bank to fund the leases?

andy.connor.e | 12/04/2019

Cars are supposedly going to be driverless at the end of the year. If this is actually possible, this will be an unbelievable achievement.

ebiggs | 12/04/2019

@Carl Thompson

I'm not saying the average Tesla owner will be able to gross $50-$100 / day as that's just some number pulled out of the air... I was more responding to the skepticism you levied a against owners being able to partake in the Tesla Network fleet at all. How lucrative that is remains to be seen.... but Tesla would at least have to make it worth their while.

crmedved | 12/04/2019

@andy not sure where you heard that from.... all I heard is FSD features will start rolling out by the end of the year. For example, traffic light detection. That does not mean the car will be able to drive itself any time soon.

billlake2000 | 12/04/2019

If you don't believe @CarlT is right, you should make him an alternative promise. Step up, brother.

billlake2000 | 12/04/2019

You know, just to keep this forum as fun as it usually is.

Carl Thompson | 12/04/2019

@ebiggs:
"I was more responding to the skepticism you levied a against owners being able to partake in the Tesla Network fleet at all. ... Tesla would at least have to make it worth their while."

Exactly. Tesla would have to make joining the network worth the owner's while. But why would Tesla make it worth the owner's while if it costs them 10 times more than not involving the owner at all?

They wouldn't and they won't. If they _do_ involve owners in their autonomous it will need to be at a pay rate so low no rational owner would even consider it.

Let me put it a different way.

Would you agree that there is a certain minimum cost it takes to buy, own and use a Tesla?

Would you also agree that a car's lifetime is finite and therefore any use of the car outside of the owner's requirements would need to at least cover the cost of wear and tear on the car for the owner to even think about it? For example, let's say the car costs $50,000 and the car will last 300,000 miles. That means each usable mile in the car costs $0.167 (about 17 cents) just on the initial purchase price alone. So a rational owner won't think about renting it out for less than 17 cents per mile because they'd lose money just from the decrease in the usable life of the car.

Would you also agree that Tesla can very likely buy its own car from itself for less money than you can buy one? So let's say Tesla can buy a car for its Tesla network from itself for $30,000. Right off the bat Tesla's cost per mile for it's self-owned car is much better than yours at $0.10 (10 cents).

So right off the bat using their own car would cost Tesla 10 cents per mile but just paying an owner for the wear on the owners car would cost 17 cents per mile. (And we don't even need to talk about the fact that Tesla's general maintenance and component replacement costs are going to be much lower than the owner's so they could probably stretch the usable life of the car far beyond 300,000 miles. But let's skip that to make it simpler.)

Would you also agree that most owners won't rent their cars out simply for the wear and tear cost. They're going to want to make more money to cover the loss of warranty miles, cover the potential hassle of not having their car when they need it or cleaning someone's vomit or poop out of their car, etc. Plus the owner will want even more money beyond that to make it generally worth their while (owner profit).

Even if the owner were willing to do it for only $0.25 cents per mile total that's still more than double what Tesla would pay just using its own car. Plus they wouldn't have to deal with the logistics of dealing with flaky humans.

So why would Tesla pay so much extra to make it worth the owner's while? I suspect they wouldn't.

Mike83 | 12/04/2019

This is in direct competition with Uber and Lyft
Tesla Master Plan II

https://cleantechnica.com/2019/04/12/tesla-will-use-model-3-lease-return...

ebiggs | 12/04/2019

@CarlT - well for all the reasons I already stated.

Let's say they can build a car for $42,500 and sell it for $50,000, that's a $7500 profit that they can continue to make a profit on by splitting TaaS revenue.

Compare to corporate ownership where they would either need to raise capital, at say 6% interest rate.

After a year they've paid $2500 in interest in financing, and lost probably 20% on the $50,000 MSRP so that's another $2500 off of their bottom line. So starting point of -$5000 vs a starting point of +$7500, for a total difference of $12,500. That's a lot of ride hailing.

ebiggs | 12/04/2019

Not to mention the elasticity of padding your ride hailing service with owner vehicles during peak usage (rush hour)... those vehicles that can elastically join your fleet during peak hours reduces the number of idle corporate owned vehicles during off-peak hours.

Carl Thompson | 12/04/2019

@ebiggs

You make some good points. I guess we'll see how it plays out (if the Tesla Network happens at all).

RES IPSA | 12/04/2019

This may be a good for some owners, but not for me. I would never allow my property to be used in such a way by strangers. I hopefully will never need my car to make money so that I can afford my car. I would just buy a cheaper used car if I could not afford a particular car

TexasBob | 12/04/2019

Here is the thing. At the end of year 3 Tesla begins to have a bunch of second-hand vehicles in its portfolio. It can:
1) Sell them to fleets (taxis, rental car fleets, whatever) on a ratable basis (ie they have a known guaranteed flow of vehicles at a guaranteed price with guaranteed milage)
2) Create their own fleet of self-driving taxis if the technology works or upgrade the technology of the returning fleet if necessary
3) Build a huge online CPO business that competes with the carmax's of the world (the most profitable segment of the auto market)
No matter what happens a Tesla network is born. The shape it takes will depend on the technology evolution.

It is a very savvy business model. A predictable and guaranteed volume of homogeneous and modestly used vehicles is a valuable asset especially when you make all the parts, control the software, and have mile-by-mile insider knowledge on everything about how the car was charged, driven, serviced, etc..

casun | 12/04/2019

well, looks like carl has this all figured out folks. there will be no tesla network.

Mike83 | 12/04/2019

An Uber trolling?

Carl Thompson | 12/04/2019

@casun:
"well, looks like carl has this all figured out folks. there will be no tesla network."

I did not say that. Read my posts again so you can figure out what I said.

casun | 13/04/2019

you certainly implied it. “the tesla network is a scam”. “i’m so certain this is bs”.

read your posts again? i’d ignore you if this forum had such a feature.

Bighorn | 13/04/2019

Since the "There will never be a $35K Tesla" folks have scattered like cockroaches, perhaps we should start archiving the folks who say "There will NEVER be a Tesla network," so we can look back in a few years. Looks like Carl is trying to be slippery about getting labeled for his words.

rdavis | 13/04/2019

Iwantmy3 | April 12, 2019
For that to work, they would have to have level 5 fully autonomous self-driving proven out and approved for use by state governments within 3 years. I am sorry, I don't see that happening.
________________

Waymo is already doing it currently... what makes you think Tesla would not be able to do this in 2 -3 years? It may not be national program, but they wouldn’t have the fleet to support a national role out either.

rdavis | 13/04/2019

RES IPSA | April 12, 2019
This may be a good for some owners, but not for me. I would never allow my property to be used in such a way by strangers. I hopefully will never need my car to make money so that I can afford my car. I would just buy a cheaper used car if I could not afford a particular car
_________________

The idea of “owning” a car will go away... it’ll be a subcritical service at some point. Just look at the younger generation that don’t even care to get a drivers license. It may not be “our” future depending on your age.... but it’s going to move that way with autonomy.

Mike83 | 13/04/2019

I am happy that some people don't think a higher level of self driving useful for a Tesla Network will be forthcoming.
This gives us a jump on competition.

M3BlueGeorgia | 13/04/2019

@beaver ... who is proving the leases?

Answer: Tesla Leasing LLC

Presumption #1: Someone setup a private company to fund the leases, which keeps them off Tesla, Inc's books. Probably Private Equity with investors who can use the tax credit.
Presumption #2: When you lease, the Tesla Inc sells the car to the Tesla Leasing LLC, so they book it as a sale.
Presumption #3: Tesla, Inc is not guaranteeing the residual value to Tesla Leasing LLC

Its interesting how people missed this.

Mike83 | 13/04/2019

MIT Elon interviewed on AI self driving.

https://youtu.be/dEv99vxKjVI

Carl Thompson | 13/04/2019

@casun , @Bighorn

I don't think it's impossible that Tesla might have an autonomous ride sharing network and call it the "Tesla Network."

What I thought I was very clear about, but apparently not clear enough for the two of you, is that this Tesla Network (if they allow owners to be a part at all) won't pay Tesla owners anywhere near the amount of money as many owners seem to think. My argument is that it does not make financial sense for Tesla to pay owners what they'd think their car's time is worth when Tesla could save a lot of money and hassle by just using their own cars.

Nowhere did I say the Tesla Network won't exist at all (though I do think it's improbable).

Mike83 | 13/04/2019

flagging this arrogant snob.

rdavis | 13/04/2019

@carl... maybe I missed something in the thread... but isn’t the idea of the Tesla network to use the cars returned off lease in the network and not “private owner” cars?

rxlawdude | 13/04/2019

@CT, you seem to be all over the place, depending on what side of the bed you got up on. "SCAM?" Really?

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