By Abhirup Roy and Akash Sriram
Jan 23 (Reuters) – Tesla on Thursday stopped including some driver-assistance features with new vehicles sold in the U.S. and Canada, requiring customers who want self-steering and similar technology to pay for a broader $99 monthly subscription.
Tesla CEO Elon Musk has been focusing on boosting revenue from artificial intelligence-driven autonomous vehicle technology in the company’s personal vehicles and robotaxis as sales of its aging electric vehicles soften.
Though EV sales account for most of Tesla’s income, investors are eager to see if the company can make money off AI, and much of Tesla’s $1.4 trillion valuation hangs on that bet.
New Tesla buyers will get Traffic Aware Cruise Control, a feature that maintains a set speed and follows traffic at a safe distance, included in their purchases, Tesla’s online vehicle configuration pages showed on Friday.
Autosteer, a feature that keeps vehicles centered in a lane on highways, will no longer come standard. Tesla stopped offering Autopilot, which included Autosteer, and also stopped selling Enhanced Autopilot, which can change lanes.
Customers wanting that level of assistance now have to buy Tesla’s broader $99-a-month Full Self-Driving (Supervised) subscription that also steers the vehicle through city streets and requires driver monitoring.
Having 10 million FSD subscriptions is a goal in Musk’s mega pay package over the next decade. Chief Financial Officer Vaibhav Taneja said in October that 12% of Tesla customers had paid for the FSD software.
Tesla last week said it would stop offering FSD as a one-time $8,000 purchase from February 14.
Musk said on Thursday the subscription price for FSD would rise over time as the software’s capabilities improve.
‘HONESTLY, IT’S DISAPPOINTING’
Following Tesla’s move, many customers voiced their displeasure on social media.
“A lot of people (including myself) subscribe to FSD just for road trips and rely on basic Autopilot for everyday commuting,” X user @Marks_Tech posted. “Honestly, it’s disappointing.”
California’s Department of Motor Vehicles had placed Tesla on a high-stakes 60-day deadline to overhaul its marketing or face a mandatory 30-day suspension of its retail sales license. The state buys more EVs than any other state.
One condition was that Tesla stop using the Autopilot name, which regulators argued misled consumers into believing the system was capable of autonomous driving.
The department declined to comment and Tesla did not immediately respond to a request for comment on the reason for the change.
(Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco; Editing by Tasim Zahid, Arun Koyyur, Rod Nickel)
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