Tesla to introduce Full Self Driving subscription by end 2020, robotaxis by 2021

Tesla will introduce Full Self Driving as a subscription service by the end of 2020, and a fledgling robotaxi fleet may be operational by late 2021, CEO and co-founder Elon Musk said at the company’s first quarter earnings call on Thursday morning (Australian time).

Full Self Driving currently sells as an add-on for Tesla cars in Australia for an increasing price – now $A8,500 in Australia and  $US7,000 in the US. It gives customers secure version 3 hardware with Tesla’s proprietary AI chip that will allow full functionality of the autonomous software as it is released incrementally to market.

In particular, Musk hopes it will form the backbone of a “robotaxi” fleet that will allow Tesla customers to gain a return on their vehicles, by allowing them to become part of an autonomous taxi network.

But the added cost of FSD (as it is otherwise known) is too much for some, on top of the higher price of buying an electric car (already higher than internal combustion engine cars due to high cost of batteries).

Musk believes those who do shell out for the FSD add-on will not rue the decision, but said this morning a subscription may help accelerate adoption of the technology.

“We will offer FSD as a subscription service but it will be towards the end of this year,” Musk said, but added that, “It would still make sense to buy FSD as an option.”

“In our view buying FSD is an investment in the future, we are confident an investment that will pay off to … the benefit of the consumer.”

“My opinion is buying the FSD option is something people will not regret doing,” said Musk.

Tesla does not count the full revenue gained from upfront FSD sales in its quarterly reports. Instead, it claims a portion of the sales based on how many features have been released to the consumer, deferring the remainder for revenue in future quarters as features are released.

Tesla’s chief financial officer Zachary Kirkhorn added however that a subscription model would allow customers to spread out the cost of FSD, while Musk pressed home the importance to Tesla of its customers’ satisfaction and therefore loyalty.

“At a high level our goal is to maximise the end of curve of customer happiness – that is our goal,” Musk said.

“It’s what results in long term value creation and loyalty.”

A recent example of this strategy has been seen in Australia, when Tesla responded to calls to drop the price for Premium Connectivity subscription and extend its free access to customers who bought before July 2019.

The added benefit of offering FSD as a subscription service is it will expand Tesla’s access to real world data that it collects from people using FSD features as they are released to market.

The latest feature to be released on the roadmap to full self driving in the US is the ability for vehicles with FSD enabled to detect and stop and traffic lights and stop signs. While certain Tesla vehicles in Australia can now detect traffic lights and stop signs, the auto stop functionality has not yet been enabled.

“Our cars will now automatically stop at each stop sign until the driver gives the confirmation to proceed,” said Musk.

The cars are capable of much more, says Musk. Reading between the lines, FSD now also has the ability to also leave the intersection automatically. But by releasing automatic stopping first, this assists Tesla’s goal to improve the neural net that underpins full self driving functionality by using driver feedback to confirm data points.

“The car is actually capable of much more than than but we are only exposing functionality that we feel is probably a safety improvement,” said Musk.

“We are collecting data from 1 million intersections every month at this point, this will grow exponentially as more people get the update.

“Soon we will be collecting from over 1 billion intersections. All those confirmations are training our neural net – essentially the driver when driving and taking action is effectively labelling reality as they drive and making the neural net better and better.

“This is an advantage none else has, we have orders of magnitude more than every [other car maker] else combined,” Musk said.

It is this lead on autonomous driving that Musk pins his hopes for a robotaxi fleet upon. “I think we could see robotaxis in operational in a network maybe by late next year, not in all markets but some,” he said.

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