Drivers charge their Teslas in Fountain Valley, CA, on Wednesday, March 20, 2024.
Jeff Gretchen | Media News Group | Getty Images
Tesla It said on Friday it would lower the price of a subscription to its premium driver assistance system for customers in the United States
Marketed as a Full Self-Driving, or FSD, package, Tesla customers will now pay $99 per month, down from $199 previously.
The price cut goes against previous promises made by CEO Elon Musk, who has repeatedly said the cost of FSD will only rise as Tesla adds features and functionality to the system.
“The price of FSD will continue to rise as the program approaches full self-driving capability with regulatory approval,” Musk, now known as X, tweeted on May 18, 2020. “The value of the FSD would likely be in excess of $100,000 per car,” he said at that point.
Despite its brand name, the company's FSD option today does not make Tesla vehicles autonomous or operate as robotaxis.
Musk has promised shareholders and customers a robotaxi for years, and said their existing cars will soon become self-driving after an over-the-air software update.
He told investors on a call in 2019 that autonomous driving would turn Tesla into a company with a market value of $500 billion, up from about $42 billion at the time. (The company today is worth more than $500 billion even without developing a self-driving car.) Tesla raised more than $2 billion through debt and equity after the call.
In a notification that now appears to some drivers through the touch screens in their cars, Tesla says:
“Full Self-Driving (supervised) can drive your Tesla almost anywhere. It will make lane changes, set forks to follow your navigation path, navigate around other vehicles and objects, and turn left and right. It should be used with extra caution.” And Driver springy. This does not make your car autonomous. Don't get complacent.”
The company uses sensors in the steering wheel and cabin cameras, placed above the rearview mirror, to determine whether a driver is paying attention or not, and will loudly alert drivers to keep their eyes on the road or their hands on the wheel.
In 2022, the California Department of Motor Vehicles formally charged Tesla with engaging in deceptive practices around the marketing of driver assistance systems, including its standard Autopilot and FSD package in the United States, according to filings with the state administrative agency.
while, the alphabetIts Waymo-owned company operates commercial robotaxi services in several US cities. The company also recently partnered with Uber Eats for driverless food delivery. In China, Didi's standalone unit operates commercially in markets including Guangzhou. Companies including the UK's Bill Gates-backed Wayve and Amazon Zoox in the US is also testing robots.
In an effort to achieve end-of-quarter sales last month, Musk tasked all sales and service employees with installing and demonstrating the FSD to customers before handing over the keys. He wrote in an email to employees, “Almost no one actually realizes how well (supervised) FSD works. I know this will slow down the delivery process, but it is a difficult requirement nonetheless.”
Following this, Tesla also announced that it will be giving a free one-month trial of FSD to all customers in North America. Owner reactions to the latest version of FSD have been mixed with some fans liking it, and many safety-conscious drivers have turned off the free FSD trial, deeming it inconsistent and unsafe.
Musk also recently promised to “unveil” a new, customized robotaxi on August 8. Tesla's unveilings are marketing events, and do not indicate a date for the start of production and delivery. For example, Tesla unveiled a new version of the Roadster, an all-electric heavy-duty truck called the Semi in 2017 and didn't start semi deliveries until December 2022. It has yet to produce the new version of the Roadster.
Tesla did not respond to a request for more information, including whether the price cuts announced on Friday were permanent or temporary.
Watch: Musk tries to highlight the value an automated robot can bring
