Tesla Slashes Price of Self-Driving Software

By Douglas A. McIntyre Updated Apr 22, 7:10AM EDT · Published Apr 21, 6:36AM EDT

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Tesla Slashes Price of Self-Driving Software — © Public Domain/Wikimedia Commons

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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.