Tesla’s FSD Free Trial Offer: A Last-Ditch Effort to Boost Sales Amid Slowing Demand and Increasing Competition?

Elon Musk announces Tesla will provide US customers with one-month trial of driver-assist technology on Business News

Tesla, an American electric car manufacturer, recently announced a one-month free trial of its Full Self-Driving (FSD) technology to customers in the United States. This move comes as the company faces softening demand and increasing competition, putting pressure on its sales and margins. CEO Elon Musk has long championed FSD software, priced at $12,000, as a potential source of profit for the company. However, he has faced challenges in delivering on his promise of full autonomy due to regulatory and legal scrutiny of Tesla’s safety and marketing practices.

In a social media post, Musk revealed that all U.S.-capable FSD vehicles would be enabled for the one-month trial starting this week. He also instructed Tesla staff to provide demonstrations of FSD to new buyers and serviced vehicle owners during the trial period. Musk emphasized in an email to employees that FSD is highly effective but many people are not aware of how well supervised it actually works.

Research shows that the “FSD take rate” in North America has been decreasing steadily over time, with only about 14% of Tesla customers purchasing the package in Q3 2022 compared to 53% in Q3 2019. The price war with competitors that began over a year ago has also impacted Tesla’s margins negatively. Additionally, the company has projected lower delivery growth for this year as it focuses on producing its next-generation electric vehicles instead of marketing its current lineup.

Analysts believe that Musk’s directive to demonstrate FSD is part of a strategy to boost deliveries and revenues at the end of the quarter by showing potential customers how well FSD works when used with active driver supervision. The software is available for a monthly subscription fee of $199 but is not designed to fully autonomous drive Tesla vehicles without human intervention. Despite these limitations, analysts suggest that Tesla continues to maintain competitiveness in the electric vehicle market through ongoing marketing efforts such as this free trial offer.

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