Tesla FSD Subscription: Price and Release Date Expectations

Elon Musk said back in December 2020 that a FSD subscription would be made available next year. He has recently said that it’s coming this month and that it won’t be tied to the wider release of the FSD v9 beta which is expected in May or June. You can probably guess why these two features have similar timelines as Tesla expects FSD v9 to help sell the FSD subscriptions. The new FSD v9 release is also expected to have brand new vector-space visualizations.

We’re now in May and the FSD subscription should be falling upon us any day now. In our initial reporting of the FSD subscription, we talked about why it was smart for Tesla to also offer a FSD subscription in addition to a one-time purchase package. You can read more about those reasons here, but they mostly have to do with the hefty price tag of $10,000, which is a tough pill to swallow for most and also that there are some instances where buying the FSD package outright doesn't make sense, for example if you’re leasing your car.

Here’s what to expect in Tesla’s announcement

The average new car length ownership in the US is 8.4 years. The FSD package currently costs $10,000 USD. So if you take the cost of the package and divide it by the length of car ownership, you get a price of $99/month.

Now, there are probably a few reasons why Tesla wouldn’t want to create a $99/month FSD option, even though it’s a very attractive price.

First, if Tesla were to release a $99/month option, they’d be sure to annoy a whole lot of loyal supporters who spent $10,000 up front when they bought their cars and only had a fraction of the FSD features available. Secondly, Tesla would much rather you buy the FSD package up front instead of paying for it monthly. By doing that, not only do they have $10k to invest into resources right away, but they also essentially got you to commit to pay for FSD every month for 8-plus years.

So what is a good price? $149 seems plausible. For drivers who have leased their cars for three-years then it’d be a total cost of about $5,300 over the course of the three-years instead of their only other alternative right now, which is the full $10,000 package. This may tip the boat in Tesla’s favor for many.

You can certainly bet that Tesla is closely analyzing the percentage of buyers who currently buy the FSD package today and how many of those buyers they would lose if they were to offer a monthly subscription. The answer to that question lies in whether they would make more through FSD subscriptions than what they’d lose in upfront payments.

If we look at the possibility of a $199/month subscription then we’re looking at someone paying $7,200 over three-years, which seems just way too close to the full price of $10,000 to make sense. That’d be paying over $20k over that 8 year period.

Now, if Tesla were a traditional company, I would feel pretty comfortable with expecting a $149/month FSD subscription becoming available this month. But if there’s one thing that Tesla has taught us over the years, is that there is always a price early adopters pay.

The price of Tesla’s cars has dropped dramatically in some cases. Some folks paid more for an AWD Model 3 then what the Performance model ended up costing later on. Elon Musk has often commented on this; saying that technology gets cheaper and early adopters are often helping pave the road for the future.

Whether Tesla releases a $99/month or $199/month FSD subscription completely depends on how many buyers are buying the FSD package today. I have a feeling it’s rather low or Tesla wouldn’t be considering a monthly subscription in the first place.

As a reader has pointed out, it's possible that Tesla may require a minimum commitment in order to subscribe to FSD at $99/month. This could be used to prevent owners from only subscribing during roadtrips. It could also help offset the costs of any hardware needed to allow FSD, such as upgrading the car's Autopilot hardware from 2.5 to 3.0. Elon Musk has already said that the FSD subscription would cover any hardware needed. A minimum commitment could be one or two-years.

A FSD subscription has the advantage that it is not tied to a particular vehicle, you could subscribe to it in one vehicle, then switch it to another a year or two later. That may be the biggest issue early adopters will have who paid full price for FSD at $7,000 or $10,000. Tesla may allow a one-time transfer of the FSD license for these owners as this has become a popular topic that has yet to be addressed by Elon. It's also possible that Tesla may limit FSD subscriptions to personal use and they would not be able to be used for robotaxis in the future.

We expect Tesla to announce a FSD subscription as low as $99, or as high as $149, in the US very soon.

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Musk Teases New Model for Early 2025 That Will Use a Mix of Next-Gen and Current Platforms

“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025”. This was one of the key sentences that were part of Tesla’s deck shared on Tuesday directly before its financial results.

Since Reuters’ report a few weeks ago saying Tesla had “scrapped” the highly expected cheaper model— which Elon quickly denied on X —retail and institutional shareholders started asking for more details on Tesla’s product roadmap for 2024 and beyond.

In the earnings conference call, Elon Musk reiterated that Tesla expects to launch the next model in “early 2025, if not late this year”.

“We've updated our future vehicle lineup to accelerate the launch of new models ahead of previously mentioned start of production in the second half of 2025. So, we expect it to be more like the early 2025, if not late this year. “

Over concerns of temporary production halts to update the factories for these new models, Musk said that Tesla will produce new models with certain aspects from their next-generation platform and current models. This will reduce the number of changes needed on production lines and allow Tesla not only to ramp up production faster but also to get the vehicles to market quicker.

Model Y Redesign

Tesla appears to hit that their next-gen vehicle will be less “next-gen” than they were initially aiming for, but to get a new vehicle out the door by late 2024, the process would already have to be in motion. Tesla may likely be referring to the redesigned Model Y, which is expected to reuse many parts from the new Model 3. Earlier this year, Tesla said that the redesigned Model Y will not be released this year, so it makes sense that they’re looking to speed up that production.

Tesla CEO concluded by saying that these measures will allow Tesla to reach a capacity of over 3 million units. Tesla produced 1.84 million vehicles in 2023. However, this year they’re ramping up Cybertruck production and introduced the new Model 3 into new markets.

And we think this should allow us to get to over 3 million vehicles of capacity when realized to the full extent.

Tesla reported on Tuesday its earnings results followed by a conference call where it teased its upcoming Robotaxi and its next-generation platform saying its “purpose-built Robotaxi product will continue to pursue a revolutionary ‘unboxed’ manufacturing strategy”.

Earlier in the day, Tesla announced the new Performance variant of its sedan Model 3 with deliveries in the United States starting already next month. The new version starts at $45,490 (after applying the $7,500 Federal EV tax credit) and goes from 0 to 60mph in 2.9 seconds.

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Tesla on FSD: Close to License Deal With Major Automaker, Announces Miles Driven on FSD v12

On Tuesday Tesla reported its earnings results followed by a conference call that brought several updates on the company’s roadmap for future vehicles, autonomous driving, Optimus and much more.

While answering a question from Goldman Sachs analyst Mark Delaney about updates on the licensing of Tesla’s Full Self-Driving (FSD) technology, Elon Musk said they’re talking to one major auto manufacturer and there’s “a good chance” the company signs the first deal before year-end. However, he went on to say that it would probably be three years before the necessary changes are integrated into the car.

I think we have a good chance we do sign a deal this year

Brings Benefits to Tesla

The technology would require other automakers to start using the same cameras and hardware as Tesla, meaning that Tesla may not only generate money from licensing FSD but also from selling the hardware itself. However, there would be other benefits as well. When licensing FSD, Tesla would likely own the data gathered with the system well, further helping them with data and edge cases that need to be solved to reach full autonomy.

people don't understand all cars will need to be smart cars… Once that becomes obvious, I think licensing becomes not optional.

Tesla’s Chief Financial Officer Vaibhav Taneja commented pointing out that future partners “take a lot of time in their product life cycle” resulting in a gap between the deal signing and the arrival in the market of Tesla’s FSD software.

Miles Driven With FSD

On the conference call, Musk added that Tesla now has over 300 million miles that have been driven with FSD v12 since it was launched just last month. He added that it's becoming “very clear that the vision-based approach with end-to-end neural networks is the right solution for scalable autonomy”.

Tesla said it will continue to increase its “core AI infrastructure capacity in the coming months” adding that in the first quarter, it completed the transition to hardware 4.0 with China now receiving the upgraded FSD computer and cameras.

Over the weekend, Tesla reduced the price of FSD dropping it from $12,000 to $8,000 for customers in the United States and from CA$16,000 to CA$11,000 in Canada.

Earlier this month, Tesla implemented a 50% price reduction for FSD subscriptions in the U.S. and introduced the subscription model in Canada at a great value of CA$99 per month.

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