In 2020, Tesla made tremendous progress in developing Full Self-Driving (FSD). FSD has been completely rewritten and has been tested by over 1,000 beta testers in real-world environments, which helps to improve the cutting edge technology. While the company's team still has a lot of work to do to achieve Level 5 autonomy, using FSD Beta, testers can already travel long distances without any driver intervention. FSD is currently sold as an add-on to the car and costs $10,000, but Tesla will offer a subscription option in Q2 2021.
During the Q4 2020 Earnings Call, Tesla CEO Elon Musk said the company understands that not everyone has the opportunity to purchase FSD, so it will offer its customers a subscription in the next one or two months. Although the implementation of this plan is being delayed, it seems that already by Q2 2021, Tesla will be able to offer FSD with even more and enhanced capability.
On March 1, Musk wrote on Twitter that the FSD subscription will definitely be launched in Q2 this year. The subscription offer will be designed to expand access to those who wish to use FSD, but for some reason cannot or do not want to outright buy the FSD package. However, Musk stressed that buying FSD will still be a better long-term deal than a subscription.
Note, buying FSD will still be a better long-term deal than subscription— Elon Musk (@elonmusk) March 1, 2021
FSD's pay-as-you-go subscription service will make this feature more accessible to customers, especially those who don't plan to use it frequently. With the FSD subscription option, Tesla owners or lessees can choose to pay for this feature for a limited time or as needed as a one-time subscription, which can help on long journeys. Such a subscription can also be very convenient for those who lease a car.
Meanwhile, any FSD sales, whether outright or via Subscription as a Service (SaaS), will be ultra-high profit, directly bolstering Tesla's bottom line. SaaS, given its enhanced affordability and therefore ease of access, will draw in further accounts receivable to the company.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.