Tesla lowers price of ‘Full Self-Driving’ to $8,000, down from $12,000

Tesla has once again lowered the price of its Full Self-Driving software by $4,000, now costing $8,000, down from a previous price of $12,000 in the US.

Prices were also lowered in Canada, where the system used to cost $16,000CAD, and now costs $11,000CAD.

In addition to the price drop, Tesla has eliminated “Enhanced Autopilot” as an option, which previously cost $6,000. For owners who already have enhanced autopilot, the cost to upgrade to FSD is now $2,000, down from $6,000.

Tesla has been doing a lot of price cuts lately, including dropping the price of most of its vehicles by $2,000 just a day ago.

It also cut the price of its FSD subscription service in half, to $99/mo, just a couple weeks ago.

That new subscription price suddenly made FSD’s $12k price seem quite steep, as someone would need to subscribe to FSD for ten whole years before paying $12k in total cost – and that’s not including the time value of money.

So it seemed inevitable that people would lean towards subscriptions, rather than upfront purchases, after that price drop.

Now, to make the prices a little closer, Tesla dropped the price of FSD to $8,000 – or 6 2/3 years worth of subscriptions at $99/mo. A little more reasonable, though still longer than many people own a car (and, again, one should account for the time value of money).

All of these prices are down significantly from the highest price FSD has ever sold for, which was $15k from late 2022 until late 2023 when it dropped the price back to $12k.

Tesla CEO Elon Musk has repeatedly said that as FSD becomes more capable, it should also go up in price to reflect its greater value. Previously, FSD price increases were largely associated with software updates that added new capability to the system.

Musk even went as far as to say that this means Tesla cars with FSD are “appreciating assets,” potentially worth $100-200k due to their value as robotaxis. Though Tesla only uses those values when it’s convenient, considering FSD much less valuable when offering trade-in estimates to owners.

But on a more practical business level, this move to lower FSD prices probably has less to do with the system’s capabilities and more to do with boosting revenue during a difficult time for the company, having just posted bad quarterly delivery numbers and laying off 10% of its workforce. A lower price could incentivize owners to pony up for software which had previously mostly gone up in price, giving Tesla a free cash infusion.

The system’s capabilities have been changing, too. Tesla has been pushing FSD more lately, ever since the release of the “mind-blowing” FSD v12. The new version changes the system significantly on the back-end, finally using machine learning neural nets to analyze Tesla’s vast amounts of driving data to teach cars how to drive themselves.

With Tesla’s confidence in the new system, the company rolled out a free one-month trial of FSD to all Teslas in the US, basically encompassing the month of April.

It has also started calling the system “Supervised Full Self-Driving,” a somewhat self-contradictory name that nevertheless is more accurate given that FSD is still a “Level 2” system that does not ever actually take full responsibility for the dynamic driving task (that only happens with level 3+ systems, like Mercedes’ DRIVE PILOT or Waymo).

Today’s price drop hasn’t been echoed in all other territories. It’s still listed at £6,800 in the UK and 59,600kr in Norway, same as it was before today’s price drop. FSD has generally been somewhat cheaper in Europe than the US after taking into account exchange rates, because it also has more capabilities in the US than in other countries, but after today’s price cuts, it’s actually more expensive in some EU countries (like the UK, where exchange rate puts it at ~$8.4k USD equivalent) than in the US, despite lower capabilities.