Tesla is on the verge of phasing out the outright purchase option for its Full Self-Driving (FSD) software, with the change expected to take effect on February 14th. This means Saturday will be the final opportunity for customers to buy the FSD capability as a one-time purchase.
Transition to Subscription Platform
The electric vehicle manufacturer aims to transition its FSD suite to a subscription-based service. This shift will allow customers to access the semi-autonomous driving technology through a monthly payment plan. The decision follows remarks made by CEO Elon Musk in January, indicating Tesla’s intention to move away from offering FSD as a permanent purchase.
Pricing and Future Outlook
Currently, the one-time purchase option for Full Self-Driving is priced at $8,000, a reduction from its previous $15,000 price point. The monthly subscription is available for $99 per month. However, this subscription price is anticipated to increase as the FSD technology advances.
While Tesla has not provided definitive details on future pricing, speculation suggests a tiered subscription system might be implemented. Such a model could allow owners to select specific feature sets, potentially offering a more affordable entry point for FSD. This approach could be driven by the need to maintain a high adoption rate, especially as the current estimated take rate stands at around 12 percent. Notably, Elon Musk’s compensation package is tied to achieving 10 million active FSD subscriptions.
Community Reactions and Potential Impact
The move to a subscription-only model has elicited mixed reactions from Tesla owners. The company has outlined potential benefits and drawbacks:
Potential Positives:
- Lower barrier to entry and increased potential adoption.
- Financial advantages for a wider range of users.
- Simplified transferability and enhanced brand loyalty.
- Creation of predictable recurring revenue for Tesla.
- Continuous access to the latest FSD features.
Potential Negatives:
- Higher long-term costs for dedicated, long-term owners.
- Absence of true ownership and permanence of the software.
- Risk of future price increases or potential deactivation of the service.
- Perception of diminished value compared to a one-time purchase.
- Impact on the resale value and the used car market.
The Tesla community appears divided on the best approach for FSD’s sales model. Tesla is expected to release more comprehensive details regarding its subscription plans, including finalized pricing, in the upcoming weeks.