Tesla made a bold move by cutting the price of its Supervised Full Self-Driving (FSD) subscription from $199 to $99 a month. This unexpected decision led to a slight increase in the company’s stock after the announcement. The lower price is expected to attract more customers to subscribe to FSD, potentially doubling the revenue if the tax rate is adjusted accordingly.
The reduced rate could entice more individuals to opt for the monthly subscription instead of the $12,000 lifetime service. With the $99 monthly fee, it would take around 10 years to reach the cost of the one-time payment for FSD. Despite being a Level 2 system that requires human intervention, Tesla’s FSD has been gaining traction, with the company even offering one free month of FSD for all capable vehicles in late March. Additionally, Elon Musk hinted at the lower subscription rate by liking posts suggesting a $99 monthly fee on his social media platform, X.
The buzz surrounding the FSD price reduction was justified, as Tesla’s stock saw a 0.3% increase in late trading following the announcement. Despite a 2% drop in Friday’s trading session, Tesla shares had gained 3.7% for the week, driven by Musk’s promise of a robotaxi unveiling in August. This strategic move by Tesla could lead to a surge in FSD subscriptions and potentially pave the way for substantial price increases if demand grows exponentially due to improved FSD capabilities.