Tesla has finally released the long-awaited subscription option for their Full Self-Driving feature. The price? $199.00 per month.
Customers who are interested in subscribing can do so in the Tesla mobile app and they will be billed through their Tesla account. Tesla will allow subscribers to cancel at any time. After cancellation, Full Self-Driving features will remain active until the end of the current billing period.
Until now, Tesla has only offered access to the Full Self-Driving feature set as a purchase rather than a subscription. The price has risen over time and currently costs $10,000. At $199 per month, customers who decide to purchase in full would come out ahead after four years and two months.
Many owners have voiced their frustration with the up-front purchase option because the feature is tied to the vehicle rather than the owner. While having the option does help resale value, options generally don't recover their full cost on the used market. That can make upgrading to a newer Tesla vehicle difficult — especially as the cost of the option has risen over time. A subscription may be a more palatable option for those that anticipate keeping their car for a shorter period of time.
For Tesla, a subscription option will reduce both revenue and profitability on new sales but simultaneously create a new recurring line of business — one that should boast incredible margins. Tesla's Q3 earnings report in October will be the first opportunity for investors to judge the impact, though Tesla will likely discuss more details on their second quarter earnings call in a little over a week.
Will you be subscribing to the Full Self-Driving option? Let us know on Twitter @teslapodcast.
Disclosure: Rob Maurer is long TSLA stock & derivatives.