Tesla to raise Full Self-Driving price to $12,000

On January 17th, Tesla is raising its Full Self-Driving price by $2,000, bringing it to $12,000 in the US.

Tesla's FSD to cost $12k

BlackTesla/YouTube

What's interesting about this price increase is that if you buy a Tesla with FSD, you won't actually get the main feature, autosteer on city streets, until after you press the "button", get the safety score game, and play the game long enough to amass at least a few hundred miles of driving with a safety score of 99 or 100. There have been some testers who received the beta with scores as low as 97, but that has not been the norm.

What's also interesting is that you can rent FSD for $199 a month. The price of the monthly subscription is not going up, making it look more attractive after this latest price hike.

You previously had to keep the monthly subscription for 50 months before buying the FSD package became more economical. With this latest FSD price increase, it will now take you more than 60 months. That's more than five years straight of having the monthly subscription before the FSD package would be the better choice.

Tesla has been steadily increasing the price of its FSD package. After restructuring the FSD suite in 2019, Tesla added basic Autopilot for free and made FSD a $5,000 add-on.

A month later the cost of FSD went up to $6k and it has steadily gone up since then. Elon Musk has said that Tesla will continue to raise the cost of FSD as Tesla gets closer to achieving full autonomy.

Historical FSD Prices

Historical FSD prices since Tesla revamped it's FSD offering in 2019.

Once FSD becomes a truly autonomous algorithm, Elon Musk has said that people will be able to send their cars out to work as a ride share vehicle without needing to be in the driver's seat.

If you live in an area where lots of people use ride share cars, you could probably put a fleet of Teslas on the road and each one would pay for itself, but Tesla is years away from achieving a truly autonomous vehicle.

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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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