On Friday, Tesla (TSLA) announced that they were reducing the price of Supervised Full Self-Driving (FSD) from $199 to $99 a month. This news caused Tesla stock to rise slightly after the market closed.
The lower price of FSD should encourage more subscriptions, potentially doubling the tax rate to generate additional revenue. This reduced rate may entice more people to subscribe to FSD rather than paying $12,000 for a lifetime service. Based on the $99 monthly fee, it would take just over 10 years to reach the $12,000 price point for FSD subscription fees.
In addition to the lowered subscription rate, Tesla has started offering free transfers of FSD to a new Tesla vehicle. If FSD continues to improve significantly and attract more demand, Tesla may consider raising prices substantially in the future. Despite the name, FSD is a Level 2 system that still requires a human driver to be attentive and ready to take control at any moment.
Rumors began circulating during Friday’s trading session about the potential halving of the FSD subscription rate to $99. CEO Elon Musk showed his approval for this reduced monthly rate by interacting with posts on his social media platform.
Following the announcement, Tesla stock saw an increase of 0.7% in late trading. The stock had fallen 2% earlier in Friday’s market session but had gained 3.7% for the week due to Musk’s promise of a robotaxi unveiling on Aug. 8. For more stock market updates, you can follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson
