Rather than increasing in price over time as predicted, the cost of Tesla’s Full Self-Driving (FSD) software package is decreasing. The $12,000 option, which was only a Level 2 driver-assist system but was advertised as subsequently enabling completely autonomous capabilities, has been reduced by Tesla to $8,000. The price reduction occurs before Tesla’s April 23 earnings report, when Elon Musk Tesla CEO is expected to be pressed concerning the change. Musk has maintained for years that the software bundle will only increase in value, potentially reaching a price point of more than $100,000.
FSD reached its highest value in 2022 when it was increased to $15,000 and then dropped to $12,000. Additionally, Tesla dropped the cost of the FSD subscription version from $199 to $99 a month earlier this month. To achieve the current pay-in-full price under the new pricing, a subscription would need to last for nearly six years and nine months.
Furthermore, the car company is getting rid of the $6,000 advanced driver-assist technology offered by the firm, called Enhanced Autopilot. Customers who now have Enhanced Autopilot can upgrade to FSD for just $2,000, according to Teslarati.
Following his recent statement that the company will unveil a long-teased robotaxi vehicle on August 8, Musk’s push to make autonomous vehicles vital to Tesla’s business will become more evident later this year. He decided to focus entirely on robotaxis and abandoned ambitions to build a more accessible $25,000 “Model 2” car. Additionally, Musk is encouraging Full Self-Driving demos to prospective clients so they may test out the now-available “supervised” version of Full Self-Driving, which is no longer in bet.
Elon Musk stated over the weekend on his social media platform X that pricing modifications are a necessary component of conducting business in the auto industry. “Tesla prices must change frequently to match production with demand,” Musk stated. However, that hasn’t been sufficient to calm investors, as evidenced by the Monday morning drop-in in Tesla shares below $140, one day ahead of the company’s scheduled Q1 2024 earnings call. Perfect timing was made worse by Tesla’s previous week.
Several factors that have contributed to Tesla being in a delicate situation began on Monday of last week with the announcement that, as a result of lower deliveries, Tesla was going to fire 10% of its staff. Shortly afterwards, the business requested shareholders to restore Musk’s $56 billion compensation plan, which had just been declared void by a Delaware court. This came at a horrible time, considering Tesla’s recent performance.
Then, due to the accelerator pedals’ propensity to become jammed against the vehicle’s interior and cause unintentional acceleration, all 3,878 Cybertrucks that were still in service were recalled on Friday. The remedy? A single rivet to keep the piece in place.
Over the weekend, not only lowered pricing, Elon Musk also cancelled a planned trip to India, where he was expected to announce Tesla’s entry into the market. Musk explained that he had to postpone the trip due to “very heavy Tesla obligations.”
Some of the largest manufacturers in the world, including Tesla and Li, are in a difficult position as a result of the recent general decrease in EV sales. Chinese electric car manufacturer Li Auto, whose stock has also just dropped, is following Tesla’s declining share count. Li has cut car costs, much like Tesla, and has seen lower-than-expected sales figures from analysts.