Tesla Faces Backlash Over Handling of Full Self-Driving Transfers Amid Subscription Model Introduction

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In a recent development, Tesla finds itself in hot water as early adopters of its Full Self-Driving (FSD) package express frustration over the company’s decision to discontinue free transfers. The move has sparked criticism from customers who had invested significant sums to support Tesla’s development of autonomous driving technology.

Tesla Slashes Full Self-Driving Subscription Price to $99/Month.

Tesla did allow free transfers of Full Self-Driving (FSD) capability for a short period earlier this year, from February 3rd to March 31st, 2024. This meant you could transfer the FSD package you purchased for one Tesla to a new Tesla you bought during that window.

Unfortunately, the program ended and currently, there are no free transfers available.

The crux of the issue lies in Tesla’s decision to end the practice of allowing customers to transfer their FSD package to new vehicles without any additional charge. Many of these early adopters, who paid premium prices for FSD, feel betrayed by the sudden change in policy, especially considering the substantial investment they made to support Tesla’s cause.

“I paid BIG money to support the cause,” lamented one customer, echoing the sentiment of many others who feel that their loyalty and early investment in Tesla’s vision are now being disregarded.

Tesla’s move to discontinue free transfers comes at a time when the company is also considering introducing FSD as a subscription service. While this shift may offer flexibility to some customers, it has raised concerns among early FSD buyers about the potential depreciation of their investment.

Some customers are calling for Tesla to offer compensation or a compromise solution, such as providing one free transfer or establishing a ten-year transfer window from the date of original purchase. They argue that such measures would acknowledge the contributions of early adopters while allowing Tesla to phase out free transfers gradually.

Meanwhile, speculation abounds regarding the future value of FSD, particularly in light of Tesla’s potential subscription model. Enhanced Autopilot (EAP) owners, who have already invested in Tesla’s advanced driver-assistance system, are eager for clarity on any benefits they may receive if they choose to subscribe to FSD.

As Tesla navigates this controversy, it faces the challenge of balancing the interests of early adopters with its own business objectives. While the company is under no obligation to offer free transfers indefinitely, it must tread carefully to avoid alienating its loyal customer base and damaging its reputation.

Why Tesla Stops Full Self-Driving (FSD) Transfers:

Here are some possible reasons:

  • Financial Incentive: Tesla likely views FSD as a revenue booster, encouraging new car purchases by making FSD non-transferable. This strategy drives sales of newer models instead of retaining older ones.
  • Software Licensing: FSD is currently considered an advanced driver-assistance system (ADAS), potentially subject to specific licensing terms tying it to individual vehicles rather than being transferable.
  • Calibration and Hardware: FSD features may require calibration to a car’s unique hardware and sensor setup. Transferring FSD could present compatibility issues or necessitate additional work.
  • Future Value Consideration: Tesla may be contemplating the future value of FSD. If FSD evolves into true self-driving, it could substantially boost the resale value of vehicles equipped with it. By keeping FSD tied to the car, Tesla could potentially capitalize on this future value.

Policy Change Flexibility: Tesla retains the flexibility to change its policies, including FSD transfers. This enables the company to adapt to market dynamics and advancements in self-driving technology.

Policy Impact on Tesla Owners:

  • Non Transfer of FSD will directly affects Tesla resale value: The lack of transfers and potentially lower FSD prices (through subscriptions) will significantly decrease the value of their car with FSD when they try to sell it.
  • Rapid Price Fluctuations: Tesla’s pricing strategy can be unpredictable, with frequent price adjustments that may lead to frustration among recent buyers who paid a higher price. These fluctuations can create uncertainty and dissatisfaction among owners.
  • External Factors: Factors such as government initiatives, like the Inflation Reduction Act (IRA) credits, can influence the overall electric vehicle (EV) market landscape. While not directly controlled by Tesla, these external factors can still impact Tesla owners’ experiences and perceptions.
  • Market Value vs. Paid Price: The resale value of Tesla vehicles can fluctuate based on market demand and the introduction of new features in newer models. While a 35% depreciation figure may seem significant, it reflects the market value rather than the actual money lost by the owner if they haven’t sold their car. This discrepancy between the paid price and the current market value can affect owners’ perceptions of their vehicle’s worth.

However, there are also counter-arguments to consider:

    • Limited Impact on Early Adopters: Those who bought FSD very early might have already enjoyed a period of exclusivity and higher resale value. The impact might be felt more by those who purchased FSD closer to the policy change.

    • Overall Tesla Demand: If Tesla maintains strong overall demand for their vehicles, the impact on resale value due to FSD specifically might be mitigated.

    • Uncertain Subscription Model: The details of Tesla’s potential FSD subscription model are unknown. It’s possible the subscription won’t offer all the features or might have limitations, making pre-purchased FSD with full functionality still desirable for some buyers.

Tesla Clarifies FSD Pricing: Two Options  “Supervised FSD” and  “Unsupervised FSD” Available

Tesla has addressed confusion surrounding its Full Self-Driving (FSD) pricing structure by announcing two distinct versions of the system.

Supervised FSD (New Subscription Model):

  • Price: $99 per month
  • Features: This version requires constant driver attention and supervision. It’s likely the standard FSD experience most users are familiar with.
  • Accessibility: The subscription model makes FSD more accessible due to the lower monthly cost compared to the one-time purchase.

Full Self-Driving Package (One-Time Purchase):

  • Price: $12,000 (previously purchased)
  • Features: This is the existing one-time purchase option. It might include the features of the Supervised FSD and potentially unlock future capabilities of “unsupervised” FSD, where the car operates autonomously without driver intervention (important note: unsupervised FSD is not yet available and its development and approval are uncertain).

The first option is a new $99 per month subscription for “Supervised FSD”. This system requires constant driver attention and supervision, reflecting the current capabilities of the technology. This option makes FSD more accessible to a wider range of drivers due to the lower monthly cost compared to a one-time purchase.

The second option is the existing one-time purchase for the Full Self-Driving package, priced at $12,000 for those who previously purchased it. This version retains all current functionalities and holds the potential to unlock future capabilities of “unsupervised” FSD, where the car operates autonomously without driver intervention. It’s important to note that unsupervised FSD is still under development and awaits regulatory approval.

Tesla emphasizes that the “Supervised” tag is not a new limitation, but rather a more accurate description of the current state of FSD. It serves as a critical safety reminder that drivers must remain attentive while using the system.

Consumers now have a choice between a $99 monthly subscription for Supervised FSD and a one-time purchase of the Full Self-Driving package (potentially offering future unsupervised driving capabilities). The recent price change only affects the new subscription model, with no impact on the existing one-time purchase option.

How Does This Affect EAP Owners Considering FSD Subscriptions?

EAP is a separate system offering features like lane centering and automatic lane changes. As of now, Tesla hasn’t announced any specific benefits for EAP owners considering the FSD subscription.

While Tesla offers a new subscription option for Full Self-Driving (FSD), the impact on current Enhanced Autopilot (EAP) owners remains unclear. Since EAP is no longer available for purchase as a standalone option, its past price isn’t directly relevant to the current FSD subscription discussion.  Historically EAP prices, which could have ranged from $5,000 to $8,000 depending on the purchase timeframe.

EAP vs. FSD:

EAP is an advanced driver-assistance system offered by Tesla. It includes features like lane centering, automatic lane changes on highways, and Traffic Light and Stop Sign Control. FSD (Full Self-Driving) is a more advanced system that aims for a higher level of autonomy, potentially including navigating roads without driver intervention (still under development and requires driver supervision).

  • Possible Scenarios: There are two main possibilities:

    • Equal Footing: Tesla might offer the same $99 monthly price for everyone, regardless of whether they have EAP or not.
    • EAP Incentive: Tesla could potentially provide a discount on the FSD subscription for existing EAP owners to encourage them to upgrade.

While the long-term impact on EAP owners remains to be seen, this new option offers greater accessibility to FSD for a wider range of Tesla drivers.

Proposed Solution:

  • Buyback package where Tesla allows transferable FSD with a buyback option: $12,000 for purchased FSD and $15,000 for monthly subscription FSD. This solution benefits both parties.
  • There should be the charge a “transfer fee” of $500 or $1000 to move it to the new Tesla.
  • Tesla should offer some kind of compensation to those who bought FSD before the transfer program ended.
  • Tesla should give at least one free transfer to each owner as a vehicle purchase a major financial decision for most.

These suggestion offers an alternative approach to FSD transfers and subscriptions. It might benefit both Tesla and its customers by increasing flexibility and potentially recouping some investment. However, there are uncertainties regarding the feasibility and financial viability for Tesla.

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