Tesla's Full Self-Driving Package Gets Huge Price Cut In The US

Tesla has slashed the asking price of its Full Self-Driving bundle (FSD) by a third, following a steep deduction in the monthly package a few weeks ago. The suite of driver assistance features, which currently stands at Level 2 autonomy, is currently listed at $8,000 on the Tesla website. Earlier, it used to cost $12,000. The subscription model for eligible Tesla cars in the U.S. and Canada is priced at $99 per month, down from its $199 monthly ask just over a week ago.

Until the second half of 2023, Tesla sold the FSD kit for $15,000 but subsequently dropped it to $12,000 as a one-time enhancement. When it was launched in 2016, Tesla set the sticker price at $8,000. By late 2020, the cost had swelled to $10,000 and then reached $15,000 two years later. Meanwhile, a subscription model was introduced in 2021 that set enthusiasts back by $199 each month.

The repeated price hike for the FSD bundle wasn't well-received by Tesla shoppers. The FSD purchase rate reached a peak in 2019's second quarter when 46% of Tesla EV buyers splurged extra cash on the FSD system. Following price hikes, the uptake had dropped to a mere 11% by 2020's second quarter. It's unclear how the latest FSD price deprecation will last. As the rates kept fluctuating, multiple crash incidents and technical woes also played a role in waning driver trust in the safety of Tesla's solution.

Tesla is just a day away from its latest quarterly call, which comes hot on the heels of Musk confirming release plans (once again) for Tesla's highly anticipated robotaxi platform and the rumored cancellation of its $25,000 Model 2 mass-market electric car. Then we have the recent Cybertruck recall affecting every single electric truck that Tesla has shipped so far, which isn't too many at just over 3,800 units.

However, the latest FSD price cut is seen as a sign of desperation. The opening quarter of 2024 marked the first time Tesla deliveries experienced a year-on-year drop since 2020. Towards the end of March this year, Tesla introduced a new rule that required all new car sales to offer a demo of the FSD system. The carmaker has often made it clear that Tesla is as much a hardware brand as it is a software company and that its success ultimately hinges on innovative products like FSD and Autopilot.

"Going forward, it is mandatory in North America to install and activate FSD V12.3.1 and take customers on a short test ride before handing over the car," Tesla CEO Musk wrote in an email reported by CNBC. Musk reportedly argued that even though it would slow the delivery chain, it would serve as an opportunity for customers to test the refined state of Tesla's driver assistance system.