Tesla is giving away a month of free, fully autonomous driving.Carlos Osorio
- Tesla offers a free one-month trial of its Full Self-Driving software.
- Driver assistance software is a $12,000 add-on, or $199 per month.
- FSD adoption could significantly increase Tesla’s profit margins and improve software.
Last week, Tesla launched a series of initiatives designed to promote its fully self-driving software — an effort that could help increase adoption and improve the software in the long term.
Tesla CEO Elon Musk announced Monday that the electric car maker will offer its U.S. customers a free trial of driver assistance software starting this week.
“All US cars that have FSD will be enabled for a month-long trial this week,” Musk wrote on X.
The billionaire also sent a company-wide email Monday morning telling staff to take customers for a “short test drive” using the automaker’s latest models FSD software during delivery and after service visits, according to two emails reviewed by Business Insider.
“Almost nobody really understands how well (supervised) FSD actually works,” Musk wrote in an email.
All current Tesla models come with the automaker Autopilot driver assistance program. But Tesla owners can also purchase the company’s FSD beta feature as an add-on either for a flat rate of $12,000 or as a monthly subscription of $199.
The FSD beta feature allows the vehicle to automatically change lanes, self-park, enter and exit the highway, and can also recognize stop signs and traffic lights. A licensed driver is still required to monitor the system at all times.
Increasing subscriptions to FSD — a feature that can be installed via an over-the-air update at almost no cost to Tesla — could significantly increase the company’s profit margins. The software also learns in real time by collecting driver data, so the more people Tesla can get using FSD on the road, the faster the system will learn. Musk initially had a goal of getting one million FSD users. As of February 2023, the automaker said it had about 400,000 FSD users.
“There is a financial incentive in mandating a post-delivery FSD demonstration. (Tesla’s average selling price is $45K; manufacturing cost is $36K; incremental software add-on sales of $12K greatly increase gross margin) But strategic considerations are probably most important. A happy FSD user will encourage friends and family to buy a Tesla,” Brett Winton, director of research at ARK Invest, wrote in post on X to which Musk replied “Absolutely.” (Ark Invest CEO Cathie Wood has invested hundreds of millions of dollars in Tesla.)
A Tesla spokesman did not immediately respond to a request for comment.
Tesla has worked in the past to make FSD more attractive to Tesla owners, including lowering the price by $3,000 last fall and allowing owners to transfer the software between cars for a short time.
In the past, Musk has emphasized the importance of Tesla’s plans for autonomous driving. During last year’s earnings call, Musk said Tesla could theoretically sell its cars for “zero profit” because of the technology.
“We’re the only ones making cars that we can technically sell at zero profit for now and then make huge savings through autonomy in the future,” Musk said on April 19, 2023. “I’m not sure how many of you will appreciate the depth of what I just said, but it is extremely significant.”
Musk characterized Tesla’s latest version of the FSD, which began rolling out this month, as “Shocking.” But the billionaire has been promising self-driving cars for years, and Tesla’s beta software is still only Level 2, meaning it requires a licensed driver to accompany it.
Software has also come under increased scrutiny from regulators in recent years. Last year, Tesla announced the recall via an over-the-air update to address concerns from the National Highway Traffic Safety Administration about the software’s tendency to “behave unsafely around intersections.”
Do you own a Tesla or work for a company? Contact the reporter via email and a non-official device at [email protected]