On Wednesday night, Tesla Motors (NASDAQ:TSLA) finally came out with the announcement we had been waiting for. After delaying the news for a few days, the company announced that all new vehicles will be loaded with self-driving hardware. While the news seemed to get mostly a yawn online, there is more to this story than the headline.
If you take a look at the Model S website, you'll notice that enhanced autopilot goes for $5,000, or an extra grand if you enable after delivery. On top of this, full self-driving capability is another option, going for $3,000 or $4k after delivery. Should these prices remain for the Model 3, it is likely that the average selling price could be well north of $40,000, which could help a bit with margins. This pricing is even more important on the Model X, where the cheapest 60 kWh version was recently eliminated. If you want a Model X with these features, you're pretty close to $100,000 before adding anything else.
Beyond the technology and the financials, there was something not found in the press release that I found interesting, an item that some thought Tesla could announce this week. Take a look at the final piece of the description for the "full self-driving capability" option on the Model S and X site, shown below:
So it does look like Tesla will be detailing some sort of Uber-like service next year. Fellow SA contributor Anton Wahlman discussed this in a recent article, and it looks like it will be coming soon. As Anton notes, we don't know if this service will make Tesla any profits, and there are many details that will need to be hammered out. However, the bull crowd will be in favor of added revenues, and Tesla can use this service for more Elon Musk announcement tweets and product reveals down the road.
While there seemed to be a bit of a yawn regarding Tesla's self-driving announcement on Wednesday, perhaps the biggest news involved what wasn't said. The company will be looking to launch a car-sharing service on the Tesla Network, with details coming next year. While I don't think any of this announced news is a real game changer just yet, remember that Uber's (Private:UBER) valuation in the private market is roughly double what Tesla currently goes for.
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