Elon Musk has said the vehicles Tesla (TSLA -0.57%) is selling today could become appreciating assets over time. We're starting to see a preview of what the CEO means by that. The electric-car maker said on Monday that on July 1, it is increasing the price of its full self-driving capability by $1,000, and more price increases are likely in the future.
The price increase comes as Tesla continues to roll out new features for its self-driving capability, which is currently only an advanced driver-assist package.
Tesla vehicles can't drive themselves yet
In July, Tesla's "full self-driving" capability will set buyers back $8,000, up from $7,000 today. With this heads-up from Tesla, owners have a chance to buy the package before the price increase. Since all of Tesla's vehicles come with the hardware necessary for its full self-driving software package (according to Tesla), all that's needed for vehicles to get upgraded is an over-the-air software update.
Although Tesla vehicles can't drive themselves yet, customers who purchase the company's full self-driving package get access to advanced driver-assist features as the automaker improves the software and as it works to achieve regulatory approval for self-driving capabilities.
In addition, these owners are essentially pre-paying for Tesla's full self-driving capability in the future, though the company warns buyers that there are uncertainties associated with this purchase. "The activation and use of these features are dependent on achieving reliability far in excess of human drivers as demonstrated by billions of miles of experience, as well as regulatory approval, which may take longer in some jurisdictions," the company's website says.
Tesla vehicles come standard with a simplified version of Autopilot -- a driver-assist feature that enables the car to steer, accelerate, and brake automatically on the highway. But many key features are missing from this standard version of Autopilot. This is where Tesla's $7,000 upgrade (soon to be $8,000) called "full self-driving" comes in. It adds automatic lane changes, on- and off-ramp transitions, autopark, the "summoning" of a vehicle in a parking lot, and assisted stops at traffic-controlled intersections.
Improving with time
A price increase for Tesla's full self-driving package reflects its ongoing improvement via over-the-air updates. These occasional updates improve Tesla vehicles' abilities, helping them take advantage of their built-in cameras and self-driving computers. The company's most recent addition to the package was the ability to stop and go at traffic lights and stop signs. Looking ahead, Tesla says it will soon add the ability to automatically steer on city streets.
"As these self-driving features evolve, your car will be continuously upgraded through over-the-air software updates," Tesla says on its website.
This probably won't be the last price increase for the software package. The company clearly states on its website that prices are "likely to increase over time with new feature releases."
Musk is particularly bullish on the value of its self-driving package, noting on Twitter Monday that the feature could eventually have a value "somewhere in excess of $100,000." Much of the software package's value is likely expected to come from the company's expected launch of a self-driving taxi fleet that owners will supposedly be allowed to deploy their vehicles into. Owners will be able to share in the revenue of this future service, Tesla has said.