Tesla continues to hike the price of its Full-Self Driving feature as demand continues to drop.
CEO Elon Musk took to Twitter on Saturday to announce that the price of FSD will rise to $12,000 on January 17, up from a current price of $10,000, though only in the U.S.
The electronic driver-assist feature cost $5,000 when launched in 2016, though at the time it was only a hardware package and didn't have any functionality.
Musk also said that the price of FSD will continue to rise, and that subscription prices for the feature will also be on the rise. Tesla in 2021 started making the feature available as a subscription priced from $199 monthly for cars equipped with Basic Autopilot and $99 when Enhanced Autopilot is equipped. The subscription can be canceled at any time.
Despite the name, FSD only offers basic self-driving capability and requires driver monitoring at all times, as it is far from perfect and makes mistakes that need to be corrected. As a result, FSD only ranks at Level 2 on the SAE scale of self-driving capability. Level 3 is the first stage where eyes-off functionality is available.
While Tesla continues to improve the feature and add functionality, it could be a decade or more until FSD can actually drive on its own without supervision 100% of the time, and that's assuming a suitable regulatory environment will be in place. And the fact that FSD can't be transferred to new vehicles, means owners who purchased it have to stick with an older vehicle or risk losing it.
The market is no longer buying the hype and as a result demand for FSD has dropped significantly. Forbes reported in December that the take rate was just 12% in 2021, down from 22% in 2020 and 37% in 2019.
Tesla predicts that both FSD functionality and the regulatory environment will improve over time. The company is already testing a version of FSD able to handle turns automatically in urban environments, still with the driver monitoring. Some customers have received a beta version of this function.
Tesla is also preparing for a future where its cars can drive with no one onboard. The company has already announced the Tesla Network which will be a driverless taxi network where Tesla owners will be able to have their cars offer lifts when not in use, creating a potential source of income for both Tesla and owners. Musk has said at this point FSD alone could be worth $100,000.