Part 7/12:
The immediate consequence of this price drop is a boost in software subscription revenues, projected to add hundreds of millions in annual recurring income. A rough estimate suggests that at a 25% take rate, this could contribute $0.23 per share in EPS, reinforcing Tesla’s position as not just an automaker but a profitable software services company.
Long-term, these recurring revenues could be worth trillions in market cap—far exceeding the value derived solely from hardware sales. Tesla’s ability to generate income from a fleet of existing vehicles through software licensing, subscriptions, and autonomous ride-hailing will fundamentally reshape the industry.