A day after cutting the price of most of its models in both the United States and China, Tesla Inc. (NASDAQ: TSLA) lowered the price of what is probably its most expensive feature. The cost of Full Self-Driving dropped from $12,000 to $8,000 a year. Tesla describes FSD as “Your car will be able to drive itself almost anywhere with minimal driver intervention and will continuously improve.” Tesla has faced some negative publicity about the software that centers around whether it is good enough to be entirely safe. However, the car company’s description also says, “The currently enabled features require active driver supervision and do not make the vehicle autonomous.” Tesla also states that its features will improve over time.
FSD is part of a move to make Tesla the first car company to actually make a truly self-driving car. It faces challenges from software companies that include Alphabet’s Waymo, and every large car company in the world is developing its own version. None have been able to say that its is safe for drivers to drive without driving. The dream that people can eat, sleep, or read in cars could be years away. Tesla may have enough problems to be in real trouble.
Tesla may release its first attempt at a fully self-driving vehicle when it introduces its “robotaxi” on August 8. The name implies that it can drive people without a driver. Skeptics believe that this is not possible, given that no company has demonstrated that it has a self-driving feature that is 100% safe. Until this happens, self-driving cars will only be a concept.
The price cuts are part of a series of moves Tesla’s CEO Elon Musk has taken to help sales and market share. Last year, 51% of the EVs sold in the United States were made by Tesla. Its $2,000 price cuts last week are another road to keep competition from gaining ground.
Until Tesla releases a truly self-driving feature, investors may think that its EV fleet is all the company has to market. The stock certainly trades that way, having reached a 52-week low, after dropping 40% this year to $147.
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