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A Price Cut Is Looming For Tesla's FSD Software - By How Much?

There's a price cut that we think is coming for Tesla's FSD software - here's how much we think it will be.
A Price Cut Is Looming For Tesla's FSD Software - By How Much?

Price Cut Looming For Tesla FSD

Elon Musk recently liked a post from Troy Teslike, talking about Tesla reducing the monthly subscription price of FSD from $199 to $99. This seems to indicate that Tesla will move in the direction of reducing the price of FSD in the short-term, while the software is still in development for autonomous and driverless transport.

Troy did a survey asking how much people would pay for FSD, and the numbers went like so:

  • $99/month: 56.9% of people
  • $129/month: 17.6% of people
  • $159/month: 7.4% of people
  • $199/month: 18% of people

It's interesting to note that the $199/month was the second most popular option, and it may be because people are already paying this amount... Still, almost 57% of people said they would pay $99/month, and that is a significant amount - more than all the other options combined.

Tesla will most likely lower the monthly price to $99 after the one-month free trial period is over, which will be around the end of April for most people.

If Tesla lowers the monthly cost to $99, then certainly the full amount for a lifetime of FSD amount should be lowered from $12,000 to $6,000 as well.

However, Tesla could still offer a transferable license for $12,000 and a one-time license for $6,000.

You May Also Like: Tesla FSD Saves The Life Of a Man It Drove To the Hospital at 2:00 AM

The Advantage Of a Lower Price and Why It's Coming

I think a lower price is inevitable for Tesla's FSD software, and the reason is that a lower price means more people buying it and using it - which means more video data for Tesla.

As more and more Tesla vehicles in the U.S. and North America give Tesla video data, more "edge cases" and situations which the software currently does not succeed at will be fixed.

Tesla will also earn a little bit more revenue and profit to their bottom line if take rates increase. At $99/month, I see the take rate at least doubling to around 20% - if not more, from the around 10% it is now.

Tesla is in the first phase of AI training for its neural net for FSD and that is imitation learning. It is learning from human drivers and data curators at Tesla take video clips from human drivers - driving well and successfully and use that to train the software.

Eventually, with enough human data, Tesla is going to shift into its second phase of AI training and that will be reinforcement training. That means the AI is going to train itself using a variety of factors that signify success in driving, such as safety, time to arrival, energy efficiency, etc...

This second phase will come only when Tesla has exhausted all it can to make a Tesla vehicle much safer than the average human driver.

But, it won't stop there. Tesla will use reinforcement learning for its AI to make its software superhuman. It will do this by training the software in a synthetic world using the best human driver attributes to see who comes out on top.

FSD Price Will Go Up Eventually

At the point Tesla has maxed out on imitation learning, and starts to use reinforcement learning, I think we'll see the monthly price of FSD INCREASE, back to $199 and beyond as the car becomes capable of autonomous transport and making its owner money.

The sky is the limit for pricing, then. If an owner can make $30,000 per year, Tesla could charge $499/month or a $30,000 one-time payment...

In the short-term, a lower price is good news for those looking to try out FSD (Supervised).

For Further Reading: Tesla FSD - Not Stopping At Better Than Average Human Driving - It's Going For Superhuman Driving: What This Means

Will Tesla lower the price of its FSD to $99/month and $6,000 one-time?

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Hi! I'm Jeremy Noel Johnson, and I am a Tesla investor and supporter and own a 2022 Model 3 RWD EV and I don't have range anxiety :). I enjoy bringing you breaking Tesla news as well as anything about Tesla or other EV companies I can find, like Aptera. Other interests of mine are AI, Tesla Energy and the Tesla Bot! You can follow me on X.COM or LinkedIn to stay in touch and follow my Tesla and EV news coverage.

Image Credit: Tesla, Screenshot

Article Reference: Tesla

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