Tesla's Full Self-Driving (FSD) subscription service has reportedly seen a 25% increase in its take rate following a significant price reduction to $99 per month. This development, highlighted by prominent Tesla observer "Whole Mars Catalog" on social media, comes as the electric vehicle manufacturer aims to accelerate the adoption of its advanced driver-assistance system. The price adjustment, which occurred in mid-April 2024, was a strategic move to broaden the user base and gather more real-world driving data.
Previously priced at $199 monthly, the subscription cost was halved, a decision that also coincided with a reduction in the one-time purchase price of FSD from $12,000 to $8,000. This aggressive pricing strategy marked a notable shift from past statements by Tesla CEO Elon Musk, who had previously indicated that FSD's value and price would only increase as its capabilities improved. The company also rebranded the service to "FSD (Supervised)," emphasizing that drivers must remain attentive and ready to take control.
According to the tweet from "Whole Mars Catalog," the 25% increase in subscription take rate, while positive, is still perceived as slower than expected. The author stated, > "FSD subscription take rate up 25% since the price dropped to $99 honestly it should be growing much faster than that based on what I'm experiencing in my car." This sentiment suggests a belief in the system's current performance exceeding the current adoption rate. Tesla's primary goal with the price cut is to expand the dataset for its neural network training, crucial for further refining the FSD system.
Despite the reported increase, industry analysts have noted challenges in FSD adoption, with some reports from May 2024 indicating low conversion rates from free trials to paid subscriptions. The drive to increase FSD usage is also seen as a response to softening demand for Tesla vehicles and broader market competition, aiming to unlock new revenue streams and leverage the company's software capabilities. The long-term success of FSD hinges on both its technological advancement and its ability to attract and retain a wider user base.