Tesla to offer free FSD trial

The company will try to stimulate demand for the low-attach-rate AD software

Tesla to offer free FSD trial
Tesla recently brought out its FSD Version 12

US EV leader Tesla will offer its Full Self Driving (FSD) software to existing owners in a month-long free trial, CEO Elon Musk has said.

"All U.S. cars that are capable of FSD will be enabled for a one-month trial this week," Musk said in a post on social media platform X, referring to Tesla's ability to issue over-the-air software updates to existing EVs and equip them with FSD functionality.

FSD is one of the cornerstones of the Tesla bull thesis – and Musk's own predictions for the company's future value – but the free trial appears to be an attempt to stimulate demand for the software package at a time when its uptake among Tesla drivers is sluggish.

“FSD has such a low attach rate. Only about 5pc of Tesla owners pay [for it]," says RBC Capital Market's analyst Tom Narayan.

One of the chief causes of this lagging demand is the high price of $12,000, according to analysts.

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“This technology is expensive to build, and as such will be expensive, as seen with Tesla’s $12,000 price tag. For Model 3 and Model Y buyers it is a huge additional cost, even at $199/month," says Needham Automotive analyst Chris Pierce.

George Gianarikas of equity firm Cannacord Genuity also believes that "the company should cut the price of...FSD to really increase that penetration and really start to have the margins turn."

CEO Elon Musk has said on numerous occasions that his long-term value proposition for Tesla is based around FSD turning the company's cars into a fleet of driverless robotaxis. Musk has often predicted that this could lead to a 5 to 10 times value increase for Tesla.

However, FSD has come under fire. While it is called Full Self Driving, the software is currently only capable of Level 2-3 autonomous driving capabilities – meaning that drivers must pay attention to the road and be ready to take over at any time.

FSD was also subject to a recall of 362,000 Tesla vehicles in February 2023, when regulators found that the software allowed cars to exceed speed limits and travel through intersections.

FSD is not to be confused with Tesla's Autopilot, a more limited ADAS system, which was also the subject of a mass recall of 2mn vehicles in December.

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