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Tesla Stock Slips as Autonomous Driving Hardware Update Draws Ire

Tesla trades lower after unveiling an autonomous driving subscription option that some Tesla drivers may have to pay an extra hardware upgrade to use.

Tesla  (TSLA) - Get Report shares traded lower in premarket trading on Monday after the electric carmaker unveiled a subscription option for its Full Self-Driving package that some Tesla drivers may have to pay an extra $1,500 for a new chip to be installed to use.

Tesla over the weekend unveiled a $199-a-month subscription plan for its Full Self-Driving, or FSD package, rather than a $10,000 up-front fee which to date was the only option offered to enable it. 

Tesla Releases Full Self-Driving Subscription

The subscription option addresses long-standing complaints over the up-front purchase option of FSD because the feature was tied to the vehicle rather than the owner. 

However, the subscription plan requires an upgrade to version 3.0 of the FSD hardware with a new, more powerful chip that will reportedly cost $1,500. The hardware with the newer version of the chip has been standard in Tesla models since mid-2019, according to reports.

Even then, Tesla owners who only bought their cars in the past 12 months or so expressed confusion over the FSD subscription rollout.

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A number of Tesla owners took to Twitter and Reddit to express irritation or outright anger over that possibility, with some saying Tesla should pay for the upgrade cost while others called for a class-action lawsuit.

Tesla's support page said hardware upgrades aren't included with the FSD subscription.

Separately, Chinese rival EV maker Xpeng  (XPEV) - Get Report on Monday priced its new P5 sedan as low as 160,000 yuan ($24,694) days after Tesla launched a cheaper version of its Model Y sports utility vehicle.

The P5 - Xpeng’s third production model and second sedan after the P7 — was launched earlier this year. There are six different versions of the car with different features, and prices range from 160,000 yuan to 230,000 yuan.

Tesla earlier this month debuted a pared-down version of its Model Y SUV in China amid increased competition in what is currently the electric carmaker's most lucrative and important market.

At last check, shares of Tesla were down 2.45% at $628.44. The stock has fallen 13.89% year to date.