As promised by CEO Elon Musk, Tesla raised the price Wednesday of its FSD software to $8,000.
Tesla's Self-Driving Pricing Adjustments: The move comes after a discount was made available over the last few weeks to certain customers who were missing features due to the timing of their purchase.
Musk has said that the price of the software will continue increasing as it is further developed with more capabilities.
The temporary discount for the Autopilot and Full Self Driving packages — two seperate options on Tesla vehicles — may have helped bring Tesla to breakeven this quarter, as Musk said the company was close to doing.
These discounts may have been given in part to sway customers into clicking the purchase button on their app, quickly sending Tesla thousands of dollars with no employee-customer interaction needed.
Owners are able to buy the software when "building" their vehicle on Tesla's website, or they can buy it post-purchase via the Tesla app.
As Tesla rolls out more features for the FSD option, they are able to recognize more of the revenue on their balance sheet. In the second quarter, Tesla added the ability for vehicles to stop at intersections including stop signs, traffic lights, and "T" intersections.
Later in July, Tesla added the ability to proceed through green lights without driver intervention. Whether these additions will allow Tesla to realize additional deferred revenue is unknown.
Why It Matters: Tesla needs a profitable second quarter to qualify for entry into the S&P 500. This could be a big moment for the company and add more fuel for the automaker's enormous run this year, which already totals more than 150% year-to-date.
Benzinga's Take: Tesla has large revenue potential with the FSD software price increases. Tesla vehicles contain a lot of technology that gets cheaper over time. If Tesla can lower the price of the car by lowering the price of the battery — the most expensive part — it can get more cars to more people while also selling an ever-more-expensive software upgrade that becomes more enticing as new FSD features are released.
And if Tesla can get to true Level 5 Full Self Driving, the sky is the limit with its robotaxi plans.
TSLA Price Action: Tesla shares were up 4.21% to $1,125.22 at the time of publication.
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