Drivers charge their Teslas in Fountain Valley, CA, on Wednesday, March 20, 2024.
Jeff Gretchen | Medianews Group | Getty Images
Tesla said on Friday that it is reducing the subscription price of its premium driver assistance system for customers in the US
It is marketed to Tesla customers as the Full Self-Driving or FSD package now pay $99 per month, down from $199 previously.
The price cut contradicts previous promises by CEO Elon Musk, who has repeatedly said the cost of FSD will only increase as Tesla adds features and functionality to the system.
“The price of FSD will continue to increase as the software approaches full autonomous driving with regulatory approval,” Musk said. He wrote on Twitter, now known as X, on May 18, 2020. He said at the time “FSD’s value is probably somewhere over $100,000” per car.
Despite its branding, the company’s FSD option today doesn’t make Tesla vehicles autonomous or functional as robotaxis.
Musk has promised 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.
He told investors on a call in 2019 that self-driving would turn Tesla into a $500 billion company, up from about $42 billion at the time. (The company is worth more than $500 billion today even without developing a self-driving car.) Tesla raised more than $2 billion in debt and equity after the call.
In a notification now appearing to some drivers via the touchscreens in their cars, Tesla says:
“Full Self-Driving (Supervised) can drive your Tesla almost anywhere. It will make lane changes, choose forks to follow your navigation path, navigate other vehicles and objects, and make left and right turns the right.It should be used with extra care and an attentive driver does not make your vehicle autonomous.
The company uses sensors on the steering wheel and cabin cameras, mounted above the mirror, to determine whether the driver is paying attention or not, and will audibly alert drivers to keep their eyes on the road or hands on the steering wheel.
In 2022, the California Department of Motor Vehicles formally accused Tesla of engaging in deceptive practices regarding the marketing of driver assistance systems, including the standard Autopilot and FSD package in the US, according to state administrative agency filings.
In the meantime, Alphabet-Waymo is now owned operating commercial robotaxi services in many US cities. The company also recently partnered with Uber Eats for driverless food delivery. In China, Didi’s stand-alone unit is commercially active in markets including Guangzhou. Companies like Bill Gates-backed Wayve in the UK and of Amazon Zoox in the US is also testing robotics.
In a late-quarter sales push last month, Musk instructed all sales and service personnel to install and demonstrate the FSD for customers before handing over the keys. He wrote in an email to employees, “Almost no one realizes how well (supervised) FSD really works. I know this will slow down the delivery process, but it’s still a difficult requirement.”
After that, Tesla also announced that it will give a free one-month trial of FSD to all customers in North America. Owner responses to the latest version of FSD have been mixed with some fans impressed and many safety-conscious drivers turning off the free FSD trial, seeing it as inconsistent and insecure.
Musk also recently promised to “unveil” a new dedicated robotaxi on August 8. Tesla’s unveilings are marketing events and do not indicate a date for the start of production and deliveries. For example, Tesla revealed a new version of the Roadster and an all-electric heavy-duty truck called the Semi in 2017 and didn’t start Semi deliveries until December 2022. It still hasn’t produced the new version of the Roadster.
Tesla did not respond to a request for more information, including whether the price cut announced Friday is permanent or temporary.
I’M WATCHING: Musk is trying to highlight the value robotaxis could bring