The rumors proved true once again! Tesla recently surprised people in the US and Canada by reducing the price of “Full Self-Driving” (FSD) software by $4,000. However, this is a controversial act – is it either an expression of deep confidence in one’s numbers or a strategic plan to maintain good standing during difficult periods?
It is interesting to know that earlier the FSD was being sold at a maximum price of $12,000, now it is available in the United States at a much lower price of $8,000. The price cut eliminates the former $6000 “Advanced Autopilot” package, which can henceforth be treated as a de facto feature required to run the program called FSD. The high pricing strategy led to the final reduction in the monthly FSD subscription fee which the price was reduced from $199 to a much more budgetary sum of $99. Elon Musk’s EV company, Tesla, also uses declining vehicle costs to increase its determination to lower prices.
There can be any number of reasons behind the plan. Possible reasons for Tesla seeking to increase cash flow after poor sales and workforce stagnation could include the need for a financial boost in times of adversity. Furthermore, the lower cost of membership is more attractive to drivers who eventually want to purchase an FSD somewhat upfront.
One wonders whether the entire price justification is imaginary. Tesla recently launched its latest version 12.3, which adds new machine-learning techniques that improve the self-driving capabilities of their vehicles. Just a few months ago we launched our latest software update that came with a one-month free test drive for every US customer. Despite these major achievements, Tesla’s main focus is now on “Supervised Full Self Driving”, which reflects the stage of development of the given technology.
The most fascinating thing is that prices do not affect the entire world. The North American case, where the new price for driving establishes Premier as the customer market, leads to a situation where Europe, despite being a market with more limited capacity for FSD, demands a higher price. Such uncertainty leads to speculation that FSD was not properly evaluated.
The Tesla CEO additionally repeatedly underlined the promising future of FSD in the sense that Tesla vehicles would potentially gain in market value as they could become robotaxis. Tesla’s trade-in policy, on the other hand, looks to be in the opposite direction, conflicting with the high value per vehicle value.
The only answer to the question: whether this will be a sign of self-assurance or a risky attempt to save the enterprise – is time. Nevertheless, it is an axiomatic truth – the autonomous car technology domain is a fascinating and dynamic frontier waiting to be explored.
