So, Tesla just dropped their Q3 earnings report, and while most of the buzz has been about gross margins and Cybertruck hype, there’s a little nugget buried in the numbers that I haven’t seen many people talking about—FSD (Full Self-Driving) take rate. Higher take rates mean Tesla FSD revenue growth is driving stronger margins, and that’s critical for the company's future financial performance. If you blinked, you might’ve missed it, but it’s actually pretty important for Tesla’s future margins. Let’s dive in.
Why Tesla FSD Revenue Growth Matters
Tesla reported $326 million in FSD revenue for the quarter, and that’s interesting because, usually, they don’t break out FSD revenue like this. This time, though, they specifically pointed out FSD for the Cybertruck. Let me put that into context—every Cybertruck sold up to now (about 28,000 units) had FSD attached, meaning a chunk of that revenue comes from Cybertruck owners paying for FSD functionality.
A rough estimate? About $179 million of that $326 million came from Cybertruck FSD sales. The remaining $147 million? That’s from all the other Teslas out there—your Model 3s, Ys, Ss, and Xs—that have FSD. They also rolled out Smart Summon to vehicles in North America, contributing to this pile of cash.
What Does This Tell Us About FSD Take Rate?
This is where it gets fun (if you’re into numbers). Tesla's deferred revenue balance—basically money they’ve been paid but haven’t yet delivered services for—gives us a clue about the take rate, which is how many people are actually buying FSD. They recognized $326 million in FSD revenue this quarter, and the current deferred revenue balance sits at $821 million. That’s down from $940 million last quarter, which means Tesla pulled in roughly $207 million in new deferred revenue. So, what’s the take rate here?
If we assume that FSD makes up the majority of these new additions to the deferred revenue balance, then we’re looking at some interesting possibilities. A take rate of around 8% seems low, especially when we know FSD subscriptions are super cheap right now. I’d bet it’s closer to 12% or even higher, which would be wild news for Tesla. Higher take rates would mean Tesla's banking more from FSD than anyone expected.
Why Should You Care?
Here’s why this matters: higher FSD take rates mean more upfront cash for Tesla and higher margins. Tesla’s gross margins this quarter were surprisingly strong, and that wasn’t just because of regulatory credits. FSD sales are likely playing a big role in beefing up those margins.
If Tesla continues to deliver on FSD features—things like City Streets driving and improved Smart Summon—people are going to keep buying in. And with a higher take rate, it’s not just good news for Tesla’s bottom line; it’s a sign that their vision for an autonomous future is starting to resonate with more buyers.
Looking Ahead
We’re still flying blind on some of the details—like how much of this is new FSD sales versus people upgrading their existing cars. But one thing is clear: the FSD take rate is climbing, and that’s great news for Tesla’s margins. If this trend continues, we could see Tesla becoming even more of a margin machine than they already are.
So, what do you think? Is Tesla’s FSD take rate the real MVP of this earnings call, or is it just a footnote? Personally, I think we’re only scratching the surface here. As Tesla keeps rolling out more FSD functionality, I wouldn’t be surprised to see those numbers climb even higher.
Let’s just hope they keep spilling the beans on FSD revenue in future earnings calls because this is one area where Tesla has a real shot at blowing past expectations.
Thanks for reading, and as always, stay tuned for more deep dives on the future of Tesla and the world of autonomous driving.
And hey, if you’re curious about how these kinds of financial trends can impact your own investments, hit up Rebellionaire. We’re all about managing wealth with smart, focused strategies. You in?
Comments