Tesla (TSLA) Trades Lower Following FSD Subscription and Hardware Announcements

Tesla (NASDAQ: TSLA) saw a dip in trading Monday after the electric car maker announced that there would be a subscription option for its Full Self-Driving package. The subscription package costs $199/month, while some Tesla drivers would have to pay an extra $1,500 for a new chip to be installed.

Tesla believes that the subscription option addresses long-standing complaints over the original $10,000 up-front purchase option of FSD because the feature was tied to the vehicle rather than the owner. Some Tesla owners expressed confusion over the FSD subscription rollout, as Tesla models since mid-2019 have the new chip installed standard.

On a first-quarter earnings call, Tesla CFO Zachary Kirkhorn said, “If you look at the size of our fleet and you look at the number of customers who did not purchase FSD up front or on a lease and maybe want to experiment with FSD, this is a great option for them.” He added, “As the portfolio of subscription customers builds up, then that becomes a pretty strong business for us over time.”

Electrek pointed to an announcement from five years ago where the company told customers "all Tesla cars being produced now have full self-driving hardware." Several Tesla owners appeared on Twitter and Reddit expressing irritation and anger over the change, with some saying Tesla should pay for the upgrade cost while others called for a class-action lawsuit.

By Michael Elkins | [email protected]

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