Elon Musk, the CEO of Tesla Inc (NASDAQ:TSLA), recently revealed that his company will increase the price of the Autopilot feature on their cars to $8,000, marking an increment of $1,000.
The company currently charges $7,000 for the autonomous driving feature, but interestingly, the feature seems to be becoming more expensive. This is no surprise considering that it is a highly advanced feature, but this is not the first time that the cost of the Autopilot package has been adjusted. So the question is, Why does Tesla keep adjusting the cost of the autonomous driving feature, and will it happen again in the future?
The answer to the increasing cost of the autopilot feature is because fully-autonomous driving is very high. The technology itself is very expensive, largely due to its technical nature. The cost is thus transferred to the vehicle buyer. Right now, it is not as expensive because there are features that are still not available on autopilot. This means that it will likely become more expensive once the company achieves full autonomy, and once full-autonomy is given regulatory clearance.
The price will continue to rise as the software gets closer to full self-driving capability with regulatory approval. It that point, the value of FSD is probably somewhere in excess of $100,000,” stated Mr. Musk.
The other reason why autopilot is so expensive ties into Tesla’s plans for robotaxis. The company plans to use the self-driving taxis to create a fleet of autonomous cabs. Musk believes that the move will allow Tesla car owners to earn up to $30,000 annually by lending their vehicles to the autonomous taxi fleet. This means that autopilot’s value will continue to go up, which explains why the company continues to add to the cost.
You can still purchase a Tesla and not pay for autopilot if you do not want it. However, having autopilot will make your car more valuable in the future, especially if you would like to put it into the robotaxi business. Tesla’s plan for the robotaxi will allow the company to generate more value not only for itself but also for people who own Tesla cars. This is why Musk believes that autopilot is a big deal and a valuable one for that matter.