Fremont, CA – Tesla, the electric vehicle giant, made waves late Friday by slashing the price of its Supervised Full Self-Driving (FSD) subscription from $199 to $99 a month. This move, which had been widely discussed online, caused Tesla’s stock to inch up slightly after markets closed.
The reduced price for FSD is expected to attract more subscribers, potentially doubling the tax rate in order to generate more revenue for the company. This price cut may entice more customers to opt for the monthly subscription instead of paying the $12,000 lifetime fee. At $99 a month, it would take just over 10 years to accumulate $12,000 in subscription fees.
Moreover, Tesla has started offering free FSD transfers to new Tesla vehicles, and if demand for FSD increases significantly due to improved performance, the company is likely to raise prices substantially. Despite its name, FSD is only a Level 2 system, requiring human drivers to remain attentive and ready to take control at any moment.
In late March, Tesla activated a complimentary month of FSD for all eligible vehicles, signaling its commitment to advancing autonomous driving technology. During Friday’s trading session, there was speculation that the FSD subscription rate would be halved to $99, a move that garnered support from Tesla CEO Elon Musk on his social platform X.
As a result, the official announcement did not come as a major surprise to market observers. Tesla’s stock saw a modest increase of 0.3% in after-hours trading, following a 2% dip to $171.05 during regular trading hours on Friday. The stock posted a weekly gain of 3.7%, buoyed by Musk’s announcement of a robotaxi unveiling scheduled for August 8.
In conclusion, Tesla’s decision to slash the price of its FSD subscription is expected to create ripples in the market, potentially driving up demand for this advanced driving feature. As the company navigates the complex landscape of autonomous technology, investors are watching closely to see how Tesla will position itself for long-term success in this rapidly evolving industry.