Motorists charge their Teslas in Fountain Valley, California, Wednesday, March 20, 2024.
Jeff Gritchen | Medianews Group | Getty Images
Tesla said Friday that it will cut the subscription price of its premium driver assistance system for customers in the United States
Marketed as a Full Self-Driving, or FSD, package, Tesla customers will pay now $99 per month, down from $199 previously.
The price cut runs counter to previous promises from CEO Elon Musk, who has repeatedly said that the cost of the FSD will only increase if Tesla adds features and functionality to the system.
“The price of FSD will continue to rise as the software approaches full self-driving capability with regulatory approval,” Musk he wrote on Twitter, now known as
Despite the brand name, the company’s FSD option today does not make Tesla vehicles autonomous or function as robotaxis.
Musk has been promising shareholders and customers a robotaxi for years and has said their existing vehicles will soon become self-driving after an over-the-air software update.
During a call in 2019, he told investors that autonomous driving would transform Tesla into a company with a market capitalization of $500 billion, up from about $42 billion at the time. (Today the company is worth over $500 billion even without having developed an autonomous car.) Tesla raised over $2 billion through debt and equity following the call.
In a warning now being shown to some drivers through their cars’ touchscreen displays, Tesla says:
“Full autonomous driving (supervised) can drive your Tesla almost anywhere. It will make lane changes, select forks to follow the navigation path, navigate around other vehicles and objects, and make left and right turns. It must be used with particular caution and an attentive driver. It does not make your vehicle autonomous. Don’t settle.”
The company uses sensors in the steering wheel and cameras in the cabin, positioned above the rearview mirror, to determine whether or not a driver is paying attention and audibly warns drivers to keep their eyes on the road or hands on the wheel.
In 2022, the California Department of Motor Vehicles formally accused Tesla of engaging in deceptive practices in the marketing of its driver assistance systems, including the Autopilot and FSD standard package in the United States, according to documents filed with an administrative agency state.
In the meantime, AlphabetWaymo, owned by Waymo, now operates commercial robotaxi services in several U.S. cities. The company also recently partnered with Uber Eats for driverless food delivery. In China, Didi’s standalone unit operates commercially in markets including Guangzhou. Companies including Bill Gates-backed Wayve in the UK and From Amazon Zoox in the US is also testing robotaxis.
Last month, in an effort to boost end-of-quarter sales, Musk required all sales and support staff to install and demonstrate FSD for customers before handing over the keys. He wrote in an email to employees: “Almost no one realizes how well FSD (supervised) actually works. I know this will slow down the delivery process, but it is still a difficult requirement.”
Subsequently, Tesla also announced that it will give away a free one-month FSD trial to all North American customers. Owner responses to the latest version of FSD have been mixed: some fans were impressed, and many safety-conscious drivers have turned off FSD’s free trial, considering it inconsistent and dangerous.
Musk also recently promised to “unveil” a new dedicated robotaxi on August 8. Tesla’s presentations are marketing events and do not indicate a date for the start of production and deliveries. For example, Tesla introduced a new version of the Roadster and an all-electric heavy-duty truck called the Semi in 2017 and didn’t begin deliveries of the Semi until December 2022. It hasn’t produced the new version of the Roadster yet.
Tesla did not respond to a request for further information, including whether the price cut announced Friday is permanent or temporary.
CLOCK: Musk is trying to highlight the value that robotaxis could bring
