"Tesla Inc.'s ( NASDAQ: TSLA) controversial Full Self-Driving software, which is not totally autonomous, is no longer for sale. People will need to subscribe. Musk said so himself, on X: "Tesla will stop selling FSD after Feb 14. FSD will only be available as a monthly subscription thereafter." No more $8,000 one-time payment. The new model is $99 a month."
"The media have speculated about why Musk made this decision. It seems illogical at first. It takes over 80 months at $99 per month to reach $8,000. That's more than six and a half years. How many people keep a car that long? Maybe the gamble is that customers will buy more than one Tesla and just keep paying. Musk himself does not seem to be entirely clear about why he likes the new subscription model."
"Many suggest that Tesla hardware (the car) should serve as a platform for Tesla services (the software). Over time, as more features are available, each comes at its own price. If Musk can build an attractive suite of services, the monthly yield across millions of Teslas could not only be substantial but could change the company's financial metrics. One car, many subscriptions."
Tesla made Full Self-Driving (FSD), which is not fully autonomous, available only as a $99 monthly subscription after Feb 14, eliminating the $8,000 one-time purchase. The subscription requires over 80 months to match the prior lump sum, creating uncertainty about customer retention and lifetime payments. Musk expressed mixed feelings about earlier buyers. The company appears to be positioning vehicles as platforms for paid software services to generate recurring revenue. That strategy's success depends on continued vehicle sales, but Tesla faces falling sales, stronger competition, reputational issues, and consumer resistance to electric vehicles.
Read at 24/7 Wall St.
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