Tesla Motors, Inc. (NASDAQ:TSLA) – Tesla To Hike Controversial Full Self-Driving Package To $12K Beginning January 17: Elon Musk Confirms

Tesla Corporation (NASDAQ:TSLA) will soon increase the price of its full self-driving program in the US, CEO Elon Musk confirmed through a series of tweets.

What happened: Tesla’s FSD package will cost $12,000 in the US, starting Jan. 17, up from the previous price of $10,000.

The electric car maker’s FSD suite of software is still in beta testing. The company began testing FSD in beta for a select group of customers in October 2020, and originally announced a price tag of $8,000. During the week, the price was raised to $10,000.

Tesla expanded beta testing to include more drivers via a request button on the dashboard screens of its cars in September 2021. However, this option was only available to drivers with a good safety score, which is based on five criteria set by the company.

A wider release of the FSD package has always been delayed.

Musk also said that Beta 10.9 should be ready in about a week and that Beta 11, with a single city/highway software package and several other architectural upgrades, may come next month.

In response to a question about whether the monthly subscription price will stay the same, the Tesla chief said the price will rise when the FSD is released more widely. Currently, the monthly subscription price is $199.

Related Link: Why This Analyst Thinks Tesla Is a $2,500 Stock And When It Might Reach That Price Target

Why is it important: The broader version of the FSD suite will help Tesla earn recurring revenue from the software.

“If the software can become a significant proportion of Tesla’s revenue and earnings (we estimate about 50% of total profitability in the ‘blue sky’ scenario), we think investors would be willing to pay a higher multiplier for Tesla stocks,” Morgan Stanley analyst Adam Jonas He said in a May 2020 note.

However, there is a raging debate about Tesla’s FSD package. Critics say the software in its current version does not make cars fully self-driving. Consumer Reports, a consumer nonprofit, criticized the FSD program for falling short of its name and found that it performed inconsistently in its testing.

Tesla shares closed Friday’s session 3.54% lower at $1026.96.

Related link: Tesla Q4 achieves consensus by a mile, driving annual sales close to a million

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