Tesla Slashes Price of Full Self-Driving Software Subscription
Tesla has made a significant move to boost adoption of its advanced driver assistance system by slashing the price of its Full Self-Driving (FSD) software subscription. The subscription price has been reduced from $199 per month to $99 per month, making it more affordable for Tesla owners. This price cut comes as Tesla aims to increase the number of drivers using its FSD system ahead of its first-quarter earnings.
The reduction in price follows Tesla’s recent launch of a free one-month trial of the FSD software for all customers in the U.S. who own a compatible Tesla. This trial is currently ongoing and provides an opportunity for drivers to experience the capabilities of the FSD system. It’s worth noting that Tesla has renamed the software from FSD Beta to “Supervised FSD” to clarify that it does not transform Teslas into fully autonomous vehicles. Human drivers still need to supervise the software.
Under the Supervised FSD system, Tesla vehicles can perform advanced driving tasks such as changing lanes, navigating around obstacles, following a designated route, and more. As Tesla continues to enhance its software, it released further updates to its latest V12 version, improving the FSD’s city-streets driving capability by relying entirely on neural networks.
While the price reduction is beneficial for Tesla owners, it also has strategic advantages for the company. More drivers using FSD means more video data that Tesla can utilize to train its neural networks and enhance the product. Additionally, Tesla may leverage this data to fulfill CEO Elon Musk’s promise of unveiling a Tesla robotaxi by August.
Elon Musk has encouraged Tesla owners to increase the value of their vehicles by purchasing the FSD software. He emphasized the importance of developing self-driving technology, stating that if Tesla fails to do so, the company would essentially be worth nothing. Despite being valued like a tech giant, Tesla’s profit margins serve as a reminder that it is ultimately an automaker.
However, making FSD more accessible could potentially lead to drivers subscribing to the software without fully understanding their responsibility to supervise it. This could pose a problem if they are unable to take over control in case of any issues.
It is worth noting that Tesla has not altered the cost of a one-time purchase of FSD, which remains at $12,000 in the U.S. This price has fluctuated over the years, with Tesla increasing it to $15,000 in North America in 2022 before reducing it back to its current price.
The recent price cut for the FSD subscription contradicts Musk’s statement from four years ago when he claimed that as FSD approached full self-driving capability, its value would increase. At that time, Musk predicted that the software could be valued at “probably somewhere in excess of $100,000.”
However, Musk has also asserted that the price of FSD will continue to rise as the software progresses towards full self-driving capability and gains regulatory approval. He believes that at that point, the value of FSD could exceed $100,000.