Tesla is hoping that a good old-fashioned sale will get more customers to buy into the whole self-driving car thing.
Driving the news: Tesla is slashing the price of its Full Self-Driving (FSD) software subscription from US$199 to US$99 per month in the U.S., part of a larger effort to boost customer subscriptions amid tough financial times for the EV maker.
- Like one of the sixty streaming services out there trying to lock you and your credit card in, Tesla has also started offering a one-month free trial for the newest version of the self-driving software to entice customers.
- Although the name Fully Self-Driving software might sound like you can zone out and watch Netflix during your commute, it still requires drivers to pay attention (partly to avoid liability if something bad happens).
Why it’s happening: Tesla's quarterly vehicle deliveries declined to start the year for the first time since 2020, putting more pressure on the company’s software services to improve its slumping revenue.
- Last year, Elon Musk cut vehicle prices to help boost sales, arguing that a larger fleet of Tesla vehicles that could adopt its self-driving software would make the company more profitable in the long term.
Why it matters: With BYD and other Chinese EV makers cutting into Tesla’s share of the EV market, the company is shifting its focus away from developing low-cost vehicles and betting bigger on unproven (but potentially lucrative) autonomous driving software.
Yes, but: Tesla's self-driving software has had its fair share of shortcomings in the safety department, with U.S. regulators currently investigating 16 crashes where Tesla vehicle owners crashed while using autopilot, resulting in 15 injuries and one fatality.
- In December, Tesla was forced to recall two million vehicles over safety concerns with the autopilot system.
Bottom line: Until Tesla’s confident enough in its tech to take on the liability of accidents and allow drivers to actually become passengers, the self-driving system could still be a tough sell to a lot of customers, even with the price cut.