Tesla just made its Full Self-Driving (FSD) software a lot more affordable. The price tag has dropped from a hefty $12,000 to a more manageable $8,000. This price cut applies to the US market, with similar reductions in Canada.
This price drop comes on the heels of a series of other Tesla price cuts. Just a day earlier, Tesla reduced the price of most of their cars by $2,000. They also recently cut the price of their FSD subscription service in half, making it just $99 per month.
With the subscription service costing so much less, it would have taken someone over ten years to pay off the full $12,000 price tag for FSD – and that’s not even considering the time value of money (basically, the idea that a dollar today is worth more than a dollar tomorrow). Tesla likely saw this and decided to make FSD a more attractive option by lowering the upfront cost.
So, how does the new price stack up? At $8,000, it’s still a significant investment. But it’s much closer to what someone would pay for a subscription over a similar timeframe (a little over 6 years’ worth of monthly payments). Even with the price cut, it’s important to remember that most people don’t keep their cars for that long. Tesla may also want to consider the time value of money when people make purchasing decisions.
And why the sudden price drop? There are a couple of possible reasons. First, the subscription service was so much cheaper that it would have taken over ten years to pay off the old FSD price tag. Second, Tesla may be facing financial difficulties and needs a cash boost. The lower price might convince more people to buy FSD, bringing in more money for Tesla.
Here’s another interesting wrinkle: Tesla CEO Elon Musk has previously said that FSD would get more expensive as it gets better. He even suggested Tesla cars with FSD could be worth much more in the future due to their self-driving capabilities. However, Tesla doesn’t seem to be following this logic with this price cut.
There is some good news, though. Tesla seems to be more confident in their new FSD v12 software, which uses more advanced technology. They even offered a free one-month trial of FSD to all Tesla owners in the US for April. They’ve also changed the name to “Supervised Full Self-Driving,” which is more accurate since the system still requires a driver.
It’s important to note that this price cut isn’t happening everywhere. For example, the price remains the same in the UK and Norway. In fact, after considering exchange rates, FSD is now actually more expensive in some European countries than in the US, even though it has fewer features there.
The technology is definitely improving, but FSD is still a Level 2 system, which means it doesn’t actually drive the car by itself. You’ll still need to be in control and pay attention at all times. Ultimately, the decision of whether or not to buy FSD is up to you, but hopefully this information helps you weigh the pros and cons.
