Tesla's Humiliation... Price Reduction for Autonomous Driving Service Following Vehicle Price Cut

FSD Software Price 30% Discount Sale

Tesla, struggling with sluggish electric vehicle sales, has significantly reduced the price of its autonomous driving software, 'Full Self-Driving (FSD),' following a vehicle price cut.

[Image source=Yonhap News]

According to Tesla on the 21st (local time), the price of the FSD software was lowered by about 30%, from the previous $12,000 to $8,000, starting the day before.

Tesla electric vehicles come with a basic autonomous driving assistance feature called 'Autopilot,' and the FSD function is available for an additional fee. Previously, Tesla halved the monthly subscription fee for the FSD software from $199 to $99 on the 12th, and this time, it has also significantly reduced the one-time purchase price. Tesla will also offer new car buyers a 30-day free trial of the FSD feature.

Elon Musk, Tesla's CEO, has viewed FSD as a cash cow and has focused investments on it. However, due to regulatory, legal restrictions, and technical development challenges, full autonomous driving functionality has not yet been realized.

Tesla has recently also cut vehicle prices. In China, the Model 3 price was reduced from 245,900 yuan to 231,900 yuan, and the Model Y price was lowered from 263,900 yuan to 249,900 yuan. In the United States, prices for three vehicle models, including the Model Y, were cut by $2,000 each.

These product and service price reductions by Tesla are closely related to recent sluggish electric vehicle sales. Tesla's vehicle deliveries in the first quarter of this year were 386,810 units, down 8.5% compared to the same period last year. This marks the first decline in four years since the COVID-19 pandemic began in 2020. Although the electric vehicle market growth has slowed due to high inflation and high interest rates, compared to companies like China's BYD, which are increasing sales, Tesla is seen as rapidly losing its market dominance.

In response, Tesla recently announced plans to reduce its workforce by 10%. As of the end of 2023, Tesla had 140,000 employees worldwide, meaning more than 14,000 will be laid off.

Amid this crisis, Tesla's stock price has fallen about 40% just this year. The market is paying close attention to Tesla's first-quarter earnings announcement scheduled for the 23rd.