Tesla (TSLA) late Friday cut the price of supervised full self-driving to $99 a month from $199, confirming online chatter. Tesla stock rose slightly after the close.
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The price drop should boost Tesla FSD subscriptions, but it would need to double the tax rate to generate more revenue.
The lower rate could also motivate more people to sign up for FSD versus paying $12,000 for a lifetime of service. At $99 per month, it would take just over 10 years to pay $12,000 in FSD subscription fees.
However, the company has started offering free FSD conversions to new Teslas. Also, if FSD shows significant improvement and attracts significant demand, Tesla will likely raise prices significantly.
FSD, despite its name, is a Level 2 system that requires the human driver to be alert and ready to take over at any time.
In late March, the electric car giant activated a free month of FSD for all capable vehicles.
During Friday's session, there was growing buzz that the FSD subscription price would be cut in half to $99. Tesla CEO Elon Musk liked several posts on his social site X that favored a $99 FSD monthly rate.
So the actual announcement wasn't a huge surprise.
Tesla stock is in late trading
Tesla stock rose 0.3% in late trading. Shares fell 2% to 171.05 in stock market trading on Friday. TSLA stock rose 3.7% over the week, buoyed by Musk's promise to unveil a robotaxi on August 8.
Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.
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