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Tesla (NASDAQ:TSLA) has dramatically lowered the monthly subscription price of its Full Self-Driving package to $99 per month from the previous rate of $199 per month, in what appears to be a shift in strategy by the electric vehicle giant.
The electric vehicle manufacturer recently required that all Tesla (TSLA) buyers taking delivery of a new vehicle take an FSD demo drive and offer the existing Tesla (TSLA) owners of a free month of the driver assistance system. The company also recently rolled out FSD v12, which is AI-powered and comes with new features. The FSD update is still far from full autonomy and uses sensors in the steering wheel and cameras in the cabin to determine whether the driver is attentive or not. Tesla (TSLA) now calls the package “FSD (supervised)”.
At one time, Elon Musk promised that the FSD package would be a welcome asset. “The price of FSD will continue to rise as the software approaches full self-driving capability with regulatory approval,” Elon Musk tweeted in 2020.
Tesla (TSLA) now appears to be focusing on a high FSD acquisition rate and building a large subscription business. Earlier in the week, Piper Sandler analyst Alexander Potter called FSD the crux of the bull thesis on Tesla (TSLA). “Even when Tesla’s vehicle portfolio was exploding, we believe it was still impossible to own TSLA without assigning significant value to the FSD software,” he noted.