As Tesla gears up to report what will likely be unimpressive financial results for the first quarter on Tuesday, the company is making more moves to go “balls to the wall for autonomy,” as CEO Elon Musk put it last week in a post on X.
Over the weekend, Tesla dropped the price of its Full Self-Driving (FSD) advanced driver-assistance system to $8,000, down from $12,000. That price cut is in addition to last week’s drop of the FSD monthly subscription to $99, down from $199. The push to get FSD into more cars could be a bid to collect more data as Tesla works to boost the neural networks that will power fuller-scale autonomy. FSD today can perform many driving tasks in cities and on highways, but still requires a human to remain alert with their hands on the wheel in case the system requires a takeover.
Tesla faces narrowing profits as it places a major and expensive bet on autonomous driving technology. Last week, Tesla laid off 10% of its staff in a move to reduce costs in preparation for the company’s “next growth phase,” per an email Musk sent to all employees.
Earlier this month, Musk abruptly announced on X that Tesla was pausing the development of its $25,000 electric vehicle in favor of a robotaxi that he promised to reveal in August. Sources within Tesla have confirmed to TechCrunch that they didn’t have prior warning from Musk on this sudden shift and that internal restructurings reflect a new ethos that puts robotaxi development at front and center.
All of this is happening as Tesla zigzags on its EV pricing strategy.
Last week, Tesla ditched EV inventory price discounts, but over the weekend slashed prices on the Model 3 and Model Y by as much as $2,000 in the U.S., China and Germany. As we saw during the first quarter of 2023, those price cuts are taking their toll on Tesla’s income and margins.
Tesla is scheduled to report earnings after markets close April 23. Musk has previously said that without autonomy, Tesla is “basically worth zero.”
