Tesla Reduces “Full Self Driving” System Price by a Third Amid Broader Price Cuts

Tesla has announced a significant price reduction for its “Full Self Driving” (FSD) system, slashing the cost by one-third from $12,000 to $8,000. This adjustment was made public through the company’s website and marks a notable shift in Tesla’s pricing strategy, as it also includes price cuts on several of its vehicle models.

Despite its name, the FSD system does not yet enable full autonomous driving; drivers are still required to stay alert and ready to take control of the vehicle at any moment. This clarification comes after Tesla CEO Elon Musk’s ambitious assertion in 2019 that Tesla would deploy a fleet of robotaxis by 2020—a goal that has not yet been realized.

In addition to reducing the FSD system’s price, Tesla has also lowered the prices of three of its five models in the United States. The Model Y, Tesla’s most popular model and the best-selling electric vehicle in the U.S., along with the older and more luxurious Models X and S, saw reductions of $2,000. However, prices for the Model 3 sedan and the Cybertruck remain unchanged.

These price cuts followed a significant drop in Tesla’s stock, which fell below $150 per share, erasing gains from the past year. Tesla’s stock has declined approximately 40% this year amid a backdrop of declining sales and intensifying competition in the electric vehicle market. These price adjustments are seen as a strategy to boost consumer interest and sales in a challenging economic environment.

As Tesla continues to navigate these market pressures, the price reduction of its FSD system and select vehicle models represents an effort to stay competitive and appealing to a broader range of consumers in the evolving automotive industry.