Tesla has significantly reduced the price of its Full Self-Driving (FSD) software subscription from $199 to $99 per month. This strategic move is aimed at increasing the adoption of its advanced driver assistance system ahead of the first-quarter earnings.
The price cut follows a free one-month trial of FSD for every customer in the U.S. with a compatible Tesla, which is still ongoing. The software, formerly known as FSD Beta, is now referred to as “Supervised FSD” to clarify that it does not render Teslas fully autonomous and that human drivers are still required to supervise the not-so-self-driving software.
FSD can handle advanced driving tasks such as making lane changes, navigating around vehicles and objects, and following a driver’s navigation route. The recent price cut coincides with the release of more tweaks to the latest V12 version of the software to certain users. Tesla claims that the latest software upgrades FSD’s city-streets driving capability to run entirely on neural networks.
More drivers with FSD not only means more revenue for Tesla but also more video data. This data can be used to train its neural networks and improve the product. Tesla might also be planning to use this data to fulfill CEO Elon Musk’s recent promise to unveil a Tesla robotaxi in August.
Musk has encouraged drivers to increase the value of their own cars by purchasing the software. He stated in 2022 that Tesla is “basically worth zero” if it can’t develop self-driving technology. However, greater FSD accessibility might increase the likelihood of drivers signing up who aren’t doing their part to supervise the software and may find themselves unable to take over if something goes wrong.
Tesla has not changed the cost of a one-time purchase of FSD, which remains at $12,000 in the U.S. This price has fluctuated in recent years. In 2022, Tesla increased the cost of FSD to $15,000 in North America, before dropping it back down to its current price a year later.
The current price cut, which somewhat democratizes the software, contradicts Musk’s statement just four years ago that the closer FSD gets to full self-driving capability, the higher its value will increase. Musk even suggested at the time that the software could rise to “probably somewhere in excess of $100,000.”
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