Tesla is spending no time exciting about the coming release of “full-self-driving” software, which a small number of customers released last week in beta form. Tesla has now increased the FSD upgrade price from 8,000 dollars to 10,000 dollars.
Over the past two years, Tesla has repeatedly tinkered with pricing for the full self-driving package. The package cost $3,000 at vehicle purchase time in 2018 or $4,000 when purchased later. Tesla cut the price briefly to $2,000 in 2019, angering customers who had paid higher prices. Then Tesla remodeled its price structure, standardizing basic autopilot features, and raising the price of the FSD package to $5,000. After that, Tesla raised the price to $6,000, $7,000, and then $8,000.
Musk has long warned customers about the continued increase in the price of fully self-driving technology. “If you’re buying a Tesla today, I think you’re buying a valuable asset — not a depreciating asset,” Musk said in an episode on the podcast in 2019.
Musk predicts that Teslas will soon be able to operate fully autonomously, allowing it to operate as autonomous taxis and generate income for its owners when not in use. He argues that this revenue-generating potential will make vehicles worth more than $100,000—which would steal even the current $10,000 price.
But with a grain of salt, it is worthwhile to take Musk’s declarations. Musk had also predicted at the time when Musk made his comments last year that “full feature” self-driving software would be released in late 2019 and would be safe enough for fully driverless operation by mid-2020. He predicted that by the end of 2020, a fleet of thousands of Teslas would provide driverless rides.
That is not going to happen, it goes without saying. Last week the first version of the FSD software had just been released in beta form. Early YouTube videos show that the software worked much worse than a driver, with three hours of driving with several serious mistakes.
So it’ll be months — probably years — before FSD software operates safely without human oversight. And even when Tesla reaches that milestone, that doesn’t necessarily make the vehicles suitable for use in a taxi service without drivers.
Therefore, self-driving taxis from companies like Alphabet’s Waymo and GM’s Cruise are custom-designed. You have redundant hardware to recover from any failure. They have sophisticated sensors. For instance, Waymo ‘s cars have short-range, wide-angle lidar sensors around the vehicle’s base to detect any nearby kids or pets that might miss out on longer-range sensors.
So even though Tesla will be able to develop driverless operating software in the next few years, its vehicles may not have the necessary hardware to make them practical as self-driving taxis. Therefore, customers who want to shell out $10,000 for the FSD package shouldn’t expect to receive the money from the taxi.
