CEO of Tesla, Elon Musk, announced on Twitter that the price for the Full Self-Driving package is going to increase to $7,000 from $6,000. He has always mentioned before that the price of the FSD package will gradually increase over time. This time, he mentions that the price hike is due to the recent software update that brings a large number of features – V10.0.
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He went on to answer numerous questions regarding Tesla’s self-driving hardware rollout, and the availability of service to upgrade to the 3.0 hardware, which is necessary for FSD.
As full self-driving isn’t available yet, there is no immediate need for the rollout of Hardware 3.0. All Tesla vehicles manufactured before April of 2019 requires the hardware upgrade from 2.5 to 3.0. This hardware swap cost is included with the price of the full self-driving package.
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Another user on Twitter asks why older vehicles (Model S and X) have to pay for the Autopilot upgrade, compared to newer vehicles (Model S and X) have it included. This is due to Tesla’s financial condition and might have a link to how they already have to do hardware upgrades to older vehicles.
Though the system might seem unfair, product prices drop and raise all the time due to various factors. It seems unfair to criticize Tesla, a car company that treats its product more like a piece of technology, regarding its price changes, but not something like a phone company.
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Tesla has made more major pricing and incentive changes, such as free supercharging on all new purchases of a Model S or Model X. This incentive was previously removed due to financial instability, but has been brought back this year in a sudden move. This incentive is far more substantial compared to a $3,000 autopilot inclusion.
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The CEO, Elon Musk, constantly stresses the importance of Tesla needing to make more money. However, the company also now offers a suite of incentives to get people to buy the more expensive Model S and Model X vehicles.
This is probably still beneficial to Tesla, as the much-improved margins of a premium vehicle sale (with loss due to incentives) probably gains the company more profit, compared to a Model 3 sale without incentives. It will be interesting to see how Tesla continues their business strategy in the future, as it won’t be feasible in their attempt to scale worldwide.