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Elon Musk Stays True to His Word: Tesla Raises Full Self-Driving Price to $8,000

By Scott Levine – Jul 1, 2020 at 2:21PM

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Drivers are paying more for full self-driving capability, but it may still be a bargain.

Keeping consistent with what Elon Musk had suggested in May, Tesla (TSLA 0.91%) announced today that the cost for the full self-driving (FSD) package is now $8,000 -- a $1,000 increase over its previous price tag. While the price hike may seem steep, it's considerably more appealing than the price that Musk imagines for the sophisticated software in the future. In addition to announcing the rise in price for the FSD package on July 1, Musk also tweeted that "The FSD price will continue to rise as the software gets closer to full self-driving capability with regulatory approval. At that point, the value of FSD is probably somewhere in excess of $100,000."

According to Electrek.co, which covers the electric transportation industry, some Tesla drivers anticipated the higher price and decided to purchase the FSD package last quarter. In fact, the website reported that "Tesla not only incentivized people to order the FSD package last quarter ahead of the price increase, but they also discounted enabled early Model 3 owners to order basic Autopilot for $2,000 and Enhanced Autopilot owners to upgrade to the FSD package for $3,000." 

Interior of the Model 3

Image source: Tesla.

Musk may have used the pricing increase in the previous quarter as a way to generate higher revenue amid concerns that the COVID-19 outbreak would adversely impact auto sales. In a similar move meant to drum up sales, Tesla also slashed the price on its Model S Long Range Plus last month.

While the FSD package is available to Tesla owners, it's important to note that the actual technology included in the package is not available yet.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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