16 Million KRW Autonomous Driving 1 Month Free
Stock Price Rises 2.9% Due to FSD Effect
Tesla, which is faltering due to a sharp decline in sales, is seeking to turn the tide with its FSD (Full Self-Driving) program.
According to the Wall Street Journal (WSJ) on the 26th (local time), Tesla plans to offer a one-month free trial of FSD to customers in the United States.
Elon Musk, Tesla's CEO, announced on his social media platform X (formerly Twitter) that "all US vehicles equipped with FSD will be eligible for a one-month trial this week." He also sent an email to employees stating that in North America, it will be mandatory to provide a short test drive before installing and activating FSD and delivering the vehicle to customers.
FSD is an advanced version of the autonomous driving software Autopilot, which currently comes standard in Tesla vehicles. It can change lanes and detect traffic lights. In North America, it can be purchased upfront for $12,000 (approximately 16.12 million KRW) or subscribed to for $199 per month (approximately 270,000 KRW). This is a project ambitiously promoted by CEO Musk and is expected to become Tesla's cash cow in the future. Musk has long regarded autonomous driving as a key factor in increasing Tesla's market value and as the necessary technology for developing future 'robotaxis' without steering wheels or pedals.
However, FSD has faced difficulties in sales amid regulatory and legal investigations regarding Tesla vehicle safety and marketing in the United States. According to Tesla, about 400,000 people in North America have downloaded FSD. Automotive industry researcher Troy Teslike revealed that the adoption rate of FSD in North America dropped from 53% in Q3 2019 to 14% in Q3 2022.
The free trial of FSD is interpreted as a strategy to expand revenue amid Tesla's recent growth slowdown. Although Tesla lowered prices in the second half of last year, vehicle sales increased by only 3%. Tesla was considered a leading tech stock in the US stock market until last year, but its stock price has fallen more than 28% this year. In response, CEO Musk has frequently mentioned FSD development to reverse the mood.
Sam Abuelsamid, an analyst at Guidehouse Insights, said, "Tesla's margins have been severely reduced due to low vehicle prices and FSD adoption," adding, "The mandatory FSD demonstration is intended to increase revenue."
Following the news of the free FSD trial, Tesla's stock price closed up 2.92% that day.
Ken Mahoney, CEO of Mahoney Asset Management, said, "(The free trial) will be the right direction for those beginning to adopt the technology," adding, "At some point, drivers may be incentivized to purchase FSD for $12,000."
Jin Munster, managing partner at Deepwater Asset Management, estimated, "Only about 5% of new Tesla buyers currently purchase or subscribe to FSD," and said, "If this figure rises to 20% by 2026, it could add nearly $1 billion in net profit."
Some remain skeptical. Troy Teslike said, "The $199 monthly price seems too expensive compared to driver assistance systems that require drivers to continuously monitor and be ready to take control at any time."
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