Tesla’s new FSD monthly subscription sounds cheap, but it isn’t

Tesla officially launched a monthly subscription fee for its Full Self-Driving (FSD) package in the US, which up until now could only be purchased as a one-time option for $10,000.

The monthly pricing is determined by which Autopilot system a car by Tesla is running. Vehicles featuring Basic Autopilot can subscribe to FSD for $199 per month, while vehicles featuring Enhanced Autopilot (EAP) can subscribe for $99 per month. 

Owners who wish to subscribe can do so through the “Upgrades” menu in their Tesla app or their Tesla Account.

What’s the catch?

At first glance, this seems like a pretty good deal because you don’t need to make a $10,000 commitment on the spot.

Instead, you can pay as you go. If the subscription isn’t to your liking, you can cancel anytime and your monthly subscription wouldn’t be prorated, the company notes.

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But let’s brake it down a bit more to see if the monthly subscription is indeed a good bargain.

First, if your Tesla’s FSD computer doesn’t have the Hardware 3.0 version, it’s not eligible for the monthly rate. You can upgrade, of course, but that would cost you an extra $1,500, which is included in the $10,000 price of a direct purchase.

New Tesla App shows FSD subscription. HW3 upgrade required for $1500 pic.twitter.com/r5giBL3vX0

— John Connell (@JohnPConnell) July 17, 2021

Secondly, the company “might change the monthly payment in the future, but will give you one month’s notice before doing so.” There’s no information on what kind of changes to expect, but it’s safe to say prices are more likely to go up than down.

But let’s assume, for the sake of argument, that the fee doesn’t change at all and we have the ‘alluring’ $199 rate for the Basic Autopilot system.

Now let’s see what this monthly fee would cost us for a year: 199 times 12 would make a total of $2,388.

Based on this amount, with an uninterrupted subscription we would reach $10,000 in roughly four years time (4.187, to be specific).

Four years, however, isn’t such a long time for owning the same car. According to a study by iSeeCars.com, the average length of new-vehicle ownership in the U.S. is 8.4 years.

So if we owned a Tesla for an average of 8 years (which, I think, is a reasonable amount of time), and we chose an FSD monthly subscription throughout, that would cost $20,000. Yes, double the amount of the one-time subscription.

In other words, the monthly fee is a bargain only for those who’d opt for FSD for a limited amount of time. Therefore, in case you’d like to have the FSD package for your vehicle’s lifetime, then the monthly subscription is definitely bad for your budget.

You can find the full details of Tesla’s Full Self-Driving subscription here.

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