""You get what you measure" is one of my favorite concepts in modern business. It means people and organizations tend to focus their behavior on whatever metrics get tracked and rewarded. This even applies to tech billionaires. This week, CEO Elon Musk said Tesla will make its FSD service subscription-only and remove the option to buy it outright. On social media, Elon stans theorized and argued with Elon-haters over the reason for this change."
"According to Tesla's proxy filing, there are four product goals. Number 2 on the list is this: "10 Million Active FSD Subscriptions." One way Tesla can reach this milestone more quickly is to remove the option to buy FSD outright. By mid-February, anyone considering this option will need to subscribe instead. Why would Tesla's board make this a goal for Musk? Subscriptions are a steadier business. Investors prefer continuous income generated by subscription businesses, versus lumpier operations that rely on large, one-time purchases."
Tesla will end outright purchases of Full Self-Driving (FSD) in mid-February and require subscription access. An executive compensation package includes a product goal of 10 million active FSD subscriptions. Making FSD subscription-only accelerates progress toward that target by converting one-time buyers into recurring subscribers. Subscriptions provide steadier, continuous revenue preferred by investors and give pricing flexibility. Measurement and financial incentives influence organizational behavior and strategic decisions. Removing the purchase option aims to rapidly build the active subscriber base and align company actions with tracked performance metrics. The change also increases company control over future FSD pricing and revenue models.
Read at Business Insider
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