Hey this is tom, and i'm a little bit shocked today, because either my grandpa stopped drinking or hell froze over or even maybe both or even maybe gordon johnson is now a tesla employee. The world has gone crazy, because what we're looking at right now is something i'd, never thought. I'd ever see an auto manufacturer deriving revenue from sas software as a service. That is the sort of thing you read in narnia or lord of the rings, but you don't expect to see it in real life and now it's happening now.

We've all been accustomed to tesla being innovative and genius in engineering, but now we see the genius of tesla in the financial world as well, because they're going to be the first auto manufacturer to derive cash on a passive income basis from every single tesla. They will sell or they already sold, that are out there in the world driving around on electric power. So what the hell am i rambling about? I'm sure some of you have heard by this point that tesla just announced that the full self-driving will be available for all customers on the subscription based model 200 bucks, a pop - and i know there are other alternatives - i'm going to cover it in a second i'm. Just saying the base presumption here - 200 bucks per month - 2 400 per year for a full self-driving subscription now again you're going to hear a lot of mainstream media talk about why full self-driving is not really full.

It's only half full half heavy. I won't have and they're going to talk about the fact that it's still a driver, assist system and not the kind of system where you go to sleep and the car literally drives for you, of course, not numb nuts i mean, but who has a better advanced System out there i mean name, one manufacturer, that offers a better system than full self-driving buy tesla, not even close for the most part. What you get is lane assist and auto brake with some modifications to make it look more like a driver, assist autopilot, but it's not even close to what tesla has okay. So now that we got that out of the way - and i'm assuming you all by this time, already are trained to ignore the fud coming out from mainstream media.

Let's talk about the pricing of this thing: it ain't cheap, 200 bucks per month. This is what you get, but if you already had this super duper autopilot you get it for 99 bucks per month. You get a discount. Also, you probably will need to upgrade to a newer version of your computer.

If you have an older model, that's another 1500 bucks which you have to spend in a lump sum. So that's non-negotiable! The other option is that if you don't want to pay the 2400 dollars per year, you can purchase the whole thing for an outright 10 000 and get it in a lump sum payment. But for me it seems that most people will be more comfortable with the subscription based model. Now here's the thing.

Of course it's not cheap, but you have to understand that people who buy teslas usually spend between forty thousand and eighty eighty five thousand dollars on their car, sometimes even more so they're kind of already getting a premium product for a premium price and they're, not really Driving a pinto or a ladder, i mean these are people who bought a tesla, they expect the best and they pay for it. They actually spent money on the value so for this audience to sell the fsd for 200 per month, it's not out of the realm of possibility. Now again, i'm not saying the penetration is going to be insane. That's what she said.

I'm saying that this is going to take a long time, but even at 10 of cars right now on the road, and it will be on the road by the end of 2021, so think about this way by the end of 2021. There's gon na be two million teslas on the road. That's just a given! Now imagine 10 percent 200 000 actually get the fsd subscription. Just ten percent we're talking about half a billion half eddie half a billion dollars of revenue just in 2021.

By doing nothing, no client acquisition cost no capex. It's a software. It's a digital product, it's literally as good as selling an online course. Not that i'm saying that elon is selling online courses.

I'm saying that every single fsd subscription they sell doesn't cost them anything. It's a digital product and the best thing is the more cars they sell, the more fsd subscriptions they sell and it only will grow in the future. So the more tesla ramps up their productions and their deliveries. This number is going to grow and it's going to become massive they've hit the jackpot.

That's the holy grail of auto manufacturers. You can't find anything like this anywhere and here's the thing, while the other auto manufacturers are chasing that sort of a recurring revenue model from the cars by charging. You insane amounts for repairs for maintenance for parts they gouge you from there to basically get some recurring revenue from all their cars on the road. Tesla will get this money by spending literally zero dollars by not annoying and antagonizing any of their clients by providing real value for their clients for about 200 bucks per month per car, which is not that bad.

So, in a sense, this is the closest you'll ever get to a win-win. When you're talking about the deal between an auto manufacturer and a customer, it's not a complete win-win, but this is pretty close. Now, i'm not saying tesla isn't gouging people for repairs and parts. They definitely play the same game like all the other auto manufacturers i'll actually stipulate to that, but they've actually found a better way to take people's money, give them value and actually create a passive business model sas software as a service as an auto producer.

This is insane to me now: we've all been accustomed to how genius they are in generically. I don't know if engineering is a word, but i mean i'm guessing, it is otherwise. I don't care, but this is financial. Maneuverness is just insane.

I mean this is acrobatics. This is gymnastics, this is beautiful. Now, if you don't like tesla and you find that sort of thing annoying well go to hell, i don't care, i honestly don't give a. I think this is brilliant and, of course, jokes aside.

I just think that this is a real good proof that they don't only have great engineering. They have great financial folks that actually know what the hell they're doing, because tesla is about to kill with this thing, and you have no idea how insane this is going to be a passive income stream for an auto manufacturer is like the wet dream of every Ceo trust me, they all want one, but they can't get it. You got ta, be a tesla to get it done and again. Thank you for spending these few minutes with me.

I appreciate you. Thank you for the channel members. Thank you for the patreons. You guys are amazing, i love you so much i'll see you guys in the next video.