Tesla Cuts Full Self Driving Subscription to $99 Amid Financial Challenges
In an effort to make its electric vehicles (EVs) more appealing to consumers, Tesla has announced a significant price reduction for its Full Self Driving (Supervised) subscription. The monthly fee has been cut from $199 to just $99, offering drivers a more affordable option to access the semi-autonomous driving feature.
Tesla's New Subscription Rates
The Full Self Driving (Supervised) system, which is not fully autonomous, can be added to a Tesla vehicle for a one-time payment of $12,000. However, with the new $99 monthly subscription plan, drivers can now enjoy the benefits of the self-driving software without the steep upfront cost. With the reduced subscription fee, it will take 10 years for the total cost to match the outright purchase price, making it a more attractive option for many.
Financial Challenges Lead to New Strategies
Tesla's decision to lower its subscription fee comes on the heels of a challenging financial quarter. The company saw a significant decrease in EV deliveries, with an 8% drop year-over-year and a 20% decrease compared to the previous quarter. This marks the first time since 2020 that Tesla has experienced a year-over-year decline in shipments. Such setbacks have prompted Tesla to explore new ways to boost sales and entice customers.
Tesla's Promotional Efforts
In an attempt to attract more buyers and enhance its financial performance, Tesla offered a free trial of the Full Self Driving (Supervised) software at the end of 2023. Additionally, Tesla has implemented a policy requiring North American salespeople to demonstrate the feature to potential buyers. The company also increased the prices of all Model Y vehicles by $1,000 at the start of April.
While Tesla has not disclosed shipment figures for its Cybertruck, which began distribution in late 2023, the automaker is gearing up to launch a new "next-generation low-cost" EV in 2025. This move is part of Tesla's broader strategy to remain competitive in the EV market and appeal to a wider range of consumers.
With the latest price cut to its Full Self Driving (Supervised) subscription, Tesla aims to make semi-autonomous driving technology more accessible, thereby enhancing the overall value proposition of its electric vehicles. This strategic move could potentially drive increased adoption and customer loyalty as Tesla navigates through a challenging economic landscape.
