Photo courtesy Motor Drive
Tesla continues to develop Full Self-Driving (FSD) and has already made tremendous progress. FSD has been completely rewritten and is being tested by several thousand beta testers in real-world environments to help improve cutting-edge technology. While the company's team still has a lot of work to do to achieve ‘Level 5’ autonomy, with FSD Beta, testers can already travel long distances without any driver intervention. FSD is currently sold as a feature to the car and costs $10,000, but Tesla has promised to offer a subscription option, which should happen 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. Although the implementation of this plan has been delayed due to the fact that it is difficult to give an exact timeline for when it will be ready, it seems that the service could be launched in about a month. In early March, Musk tweeted that the FSD subscription will definitely launch in Q2 of this year, and so far everything seems to be going according to that plan. On May 12, he tweeted that the subscription option will roll out in about a month.
Subscription rolls out in about a month— Elon Musk (@elonmusk) May 12, 2021
The subscription offering will be aimed at expanding access for those who wish to use FSD but for some reason cannot or do not want to immediately purchase the FSD package. While buying FSD will still be a better long-term deal, there are plenty of people out there who would opt for a subscription.
A FSD 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, for example, on long journeys. Such a subscription can also be very convenient for those who lease a car.
In addition, selling FSD as a full package or subscription will generate ultra-high margins for the company, which will directly increase Tesla's bottom line. The subscription, given its increased availability and ease of access, will draw in further accounts receivable to the company.
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