Tesla started its rollout of the next big release of FSD Beta on August 20th. And alongside its many improvements, Elon Musk announced that Tesla will be raising the price of FSD to $15,000 - a 20% increase. The price increase will go into effect in North America on September 5, 2022 "after a wide release of FSD Beta 10.69.2."
“Current price will be honored for orders made before Sept 5th, but delivered later,” Musk adds.
After wide release of FSD Beta 10.69.2, price of FSD will rise to $15k in North America on September 5th.
Current price will be honored for orders made before Sept 5th, but delivered later.
Musk followed up with a tweet that added how easy it was to upgrade your existing vehicle to FSD via the Tesla mobile application.
“Note, you can upgrade your existing car to FSD in 2 mins via the Tesla app,” Musk writes.
FSD Beta’s sudden and large increases in price over the last year has drawn criticism from the Tesla community. After more than 100,000 Tesla owners were added to the FSD Beta program, the software has gotten a lot of hands-on experience from owners who are having some doubts about its hefty price tag.
Tesla owner and YouTuber James Locke (@arctechinc) shared an echoed recommendation via Twitter to Musk. He asked that the license for Tesla be looked into since FSD is in development and is not a finished product yet. He suggested that a “commercial license” be used when owners place their vehicles into the robo-taxi fleet.
“.@elonmusk I humbly recommend it’s time to rethink the way the FSD license works,” Locke writes. "While FSD is still in development and not a finished product you should have a personal use and commercial use license. Personal use should be much cheaper to allow for maximum safety /1."
“When the robo-taxi fleet is a reality you could offer an upgrade to buy into the commercial license which is more expensive and offers higher profits for putting the car into the fleet. Or owners could let Tesla take a great [chunk] of the robo-taxi profit for personal license.”
.@elonmusk I humbly recommend it's time to rethink the way the FSD license works. While FSD is still in development and not a finished product you should have a personal use and commercial use license. Personal use should be much cheaper to allow for maximum safety /1
Locke adds that everyone who purchases a Tesla should have FSD included with their purchase because its features are tantamount to the vehicle’s safety.
“IMHO @elonmusk everyone who buys a Tesla should get FSD included for personal use to ensure the safest cars on the road are affordable to everyone.”
IMHO @elonmusk everyone who buys a Tesla should get FSD included for personal use to ensure the safest cars on the road are affordable to everyone.
If someone wants to put their Tesla into a money making robo-taxi fleet, that's when the cost for a license should be higher. /end
In January of 2022, Tesla raised the price of Full Self-Driving from $10,000 to $12,000. At the time, many were discussing FSD’s price and stating that $10,000 was too much for the software in its current state.
Last year, Tesla launched its Full Self-Driving subscription. Owners could pay $99 per month or $199/month for the FSD subscription, depending on whether their vehicle already has Enhanced Autopilot.
At the time Tesla's FSD package cost $10,000 and you'd have to subscribe for more than four years (at $199) before it made sense to buy the FSD package.
However, with the upcoming price increase, you'd now need to subscribe for more than six years before buying the package outright was the better deal.
There's no word whether Tesla will also increase the monthly subscription, which is starting to look like a better deal for new owners.
A monthly subscription certainly has a lot more flexibility as you can cancel or renew whenever you'd like without any penalties.
It's certainly possible that Tesla is trying to shift users toward a subscription model.
Tesla's FSD monthly subscription has remained the same price since its introduction.
As Full self-driving becomes better with each update and Tesla gains more data, we can anticipate the price of FSD to continue to go up. With the continuous sudden and large price increases, it’s becoming more difficult to justify such a large price tag.
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In this article, we’ll cover Tesla’s updates on Optimus, batteries, and Tesla Energy.
Optimus
Tesla has been working away on their humanoid robot and continues to make progress in software and hardware.
First, Tesla is preparing the Fremont factory for the Optimus pilot production line, which is scheduled for completion later this year. Once it is, wider deployments of Optimus for internal use within Tesla’s facilities are expected as well. Tesla aims to have several thousand Optimus units working in its North American factories by the end of the year once the pilot production line is operational.
Tesla’s goals for production remain extremely lofty - 1 million units per year by 2030. However, they could face some challenges when ramping production.
Key components like the shoulder actuators use specialized permanent and rare-earth magnets, which are currently sourced from China. Due to recent Chinese restrictions on the overseas sale of these magnets, Tesla is seeking an exemption or alternative suppliers. They have not yet looked into modifying the shoulder actuator but will likely do so if they cannot obtain the necessary materials.
Batteries
Batteries are another item that Tesla’s teams have been working on behind the scenes for years now. The second generation of the 4680 - the Cybercell - has been IRA-compliant for some time now. This means that the Cybertruck is eligible for the US Federal EV rebate.
Tesla also achieved the lowest cost-per-kWh of any of its cells with the 4680 battery - and it is potentially one of the cheapest cells being manufactured by any vehicle battery manufacturer at this point. With dry-cathode still being worked on, Tesla may be able to squeeze more optimizations and cost efficiencies from the 4680 cells.
Additionally, Tesla is progressing with its plans for lithium refining and cathode production in the US, both of which are scheduled to commence in 2025. While the company says they’re no longer supply-constrained for non-LFP vehicle batteries, on-shoring production and sourcing critical minerals from nations outside of China will be key.
LFP batteries continue to be supply-constrained, namely for the Tesla Energy division. LFP batteries and their materials are sourced from China. Due to tariffs and limited exports, Tesla can’t obtain enough and is considering potentially building an LFP production facility in North America.
Energy
Tesla’s energy division is still experiencing some of the highest growth of any of its divisions. Year over year, Tesla saw a 154% increase in energy storage deployments, including both Megapack and Powerwall - for a total of 10.4 GWh deployed in just Q1 2025. While deliveries in energy storage remain volatile due to the nature of Megapack installations, Tesla expects growth to continue rapidly in this segment.
Tesla also deployed 1GWh of Powerwall 3 residential storage this quarter, marking its strongest quarter. Powerwall 3 has received positive feedback from customers, many of whom appreciate its new capabilities with its built-in inverter for solar.
Megapack is continuing to see demand increases, currently highlighted by utility-scale Megapack systems, as well as data centers requiring stable power delivery. Megafactory Shanghai is also online now and producing Megapacks - with an annual production capacity of 20GWh today and up to 40GWh in the future. The site has also produced over 100 Megapacks this quarter, which are all awaiting delivery.
There was a lot of interesting news from Tesla’s Q1 2025 Earnings Call, covering everything from FSD and Robotaxi - to the less glamorous but equally important Megapack and Powerwall.
Tesla is heavily leaning into artificial intelligence, and its insurance offering is just another example of how it’s improving its product or lowering costs by leveraging AI.
Tesla recently started offering an insurance discount in select states when drivers use FSD for at least 50% of their drives and now it’s introducing an AI to help handle customer claims.
Tesla has developed an in-house voiced AI agent that can assist customers in handling simple support requests for Tesla Insurance.
For customers calling in from those states, the new AI agent provides a unique way to address the most common support calls. And it’s not just answering common questions but actually making requested changes to the owner’s account.
Policy Changes
The first key item is that it automates policy changes. Simple policy updates, including adjusting your deductible or coverage limits, are now done via AI. For policyholders who are simply looking to make quick changes and don’t have any questions, this makes the process a lot quicker by not having to wait for a representative. Tesla isn’t eliminating representatives, but this could reduce the number of representatives required or reduce wait times.
Continue Where You Left Off
The second item here, highlighted by Raj Jegannathan from Tesla’s internal IT team, is that Tesla’s AI agent is able to offer summaries of the user’s last interaction with Tesla Insurance. It will summarize your last interaction and provide assistance on that particular topic if you need to continue it. That means that you don’t have to wait for a human to review your file - the AI will kick off right where you left off.
Tesla appears to be focused on improving efficiency and making support more accessible. While actual items like claims are left up to humans due to their inherently complex nature, this helps free up employees to handle more complex items. While there’s no doubt Tesla will continue to develop this AI like they do everything else, we may soon see it take on even more tasks.
More AI
This isn’t the first AI agent that Tesla has demoed - there is now a chat-based AI sales agent available on the front page of Tesla’s website, which is able to answer common questions on Tesla vehicles.
Tesla has also been improving their AI support tool available in the Tesla App is able to provide feedback on common issues and also guide users towards either solving the problem or placing a support request.
Tesla’s strategy here is to influence the cost-heavy areas associated with having humans address simple requests and instead leverage AI, which can offer instant answers and reduce support costs.
Roll Out to More States
While this new AI is currently limited to just 12 states, it is likely to follow Tesla Insurance’s expansion. Insurance seems to have been at a bit of a standstill lately. Tesla continues to improve features such as the improvements to Safety Score V2.2, but we haven’t seen Tesla roll out support to new states since it added Minnesota in November of 2022.
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