Elon Musk slashes price for Tesla’s vaunted self-driving tech by a full third—FSD now costs as much as in 2020

Tesla’s autonomous driving software just successfully completed an unplanned journey—it went back in time, with the cost of the feature now retracing its steps all the way to October 2020.

Over the weekend, while Elon Musk was busy slashing prices on Tesla products across the board, the biggest cut he made was to Full Self-Driving (FSD) software. One third cheaper in the United States than it was just last week, FSD now costs barely more than half what it did at its peak little over a year ago. The new $8,000 price tag also means the software is now officially less expensive than when its vaunted beta first debuted. Rolled out to a select few three-and-a-half years ago, the highly anticipated beta gave Musk the opportunity to hike the cost of FSD to $10,000. He would continue to urge his loyal customers to buy FSD, since the longer they waited, the more it would cost them. That’s because Musk repeatedly claimed the price would go up the better the software got and the closer FSD came to driving without human supervision, at which point he boasted it would be worth over $100,000. Initially he also kept his word: two subsequent hikes, which culminated in a record increase to $15,000 in 2022, were pushed through despite no substantive progress made. Then he did something out of the blue last September—he lowered the price of FSD for the first time ever. Unlike his rationale for lowering car prices in 2023, when the cost of inputs like lithium had dropped as goods inflation eased, he could not argue the bill of materials for software had decreased. The issue was that take-rates had plummeted after customers had broadly given up on his annual promise of a breakthrough next year. He had to resort last month to compulsory trials when new owners picked up their car for the first time. Attempts to license the technology to rival carmakers also collapsed, he admitted in January. In a way, Musk has given up on FSD as well. In what appears to be an acknowledgement that existing owners will not experience their cars turning into robotaxis overnight—what Musk called Tesla’s “ChatGPT moment”—he opted to simply end the beta test in favor of calling the software “supervised FSD”. This opens up the chance to recognize nearly $926 million in deferred revenue, which could be a major driver of Q1 earnings when the company reports on Tuesday.