The interior of a Tesla Model S is shown in autopilot mode in San Francisco, California, U.S., April 7, 2016.
Alexandria Sage | Reuters
Tesla just introduced a way for customers to subscribe to its premium driver assistance package for $199 a month, rather than paying $10,000 up front.
Marketed as Full Self-Driving capability (or FSD), the driver assistance system does not make Tesla's electric vehicles safe for use without an attentive driver behind the wheel.
One eligible owner shared a notice they received from Tesla on Friday with CNBC, which said:
"Full Self-Driving capability is now available as a monthly subscription. Upgrade your Model Y ... for $199 (excluding taxes) to experience features like Navigate on Autopilot, Auto Lane Change, Auto Park, Summon and Traffic Light and Stop Sign Control. The currently enabled features require active driver supervision and do not make the vehicle autonomous."
While this person's Tesla Model Y possessed all components needed to start a FSD subscription, other owners lamented that they would have to pay $1,500 to upgrade their Tesla's computer to the Hardware 3, or HW3, version the company first showed off at its Autonomy Day event in April 2019 in order to subscribe.
Customers who previously bought Tesla's Enhanced Autopilot package, which it is not selling any longer, can subscribe to FSD for a lower price of $99 a month but may require the HW3 upgrade.
In a subscription agreement on Tesla's website, Elon Musk's electric vehicle maker cautions that, among other things:
- FSD features are "subject to change, limited by region," and can only be used on Tesla vehicles that have newer hardware and Autopilot technology installed.
- Drivers are responsible for tolls, parking or other traffic violations that happen in a Tesla that's operating with FSD features engaged.
- Tesla can increase the price for a subscription any time, but will give drivers a one-month advance notice before billing them at a new rate.
- Owners can cancel FSD any time but the company won't prorate their monthly payment if they do.
- Tesla can suspend or cancel a driver's FSD subscription if they use the technology, "for anything unauthorized or inappropriate" or for non-payment.
All newer Teslas include a standard set of driver assistance features dubbed Autopilot. The Autopilot or standard features enable a Tesla to "steer, accelerate and brake automatically within its lane," according to Tesla's website.
The premium FSD package enables more elaborate features like Smart Summon, which lets a driver call their Tesla to come pick them up from across a parking lot or down a long driveway using the Tesla mobile app like a remote control.
Read more about electric vehicles from CNBC Pro
Tesla has also been promising that a feature called "Autosteer on city streets" is coming soon to drivers with FSD. But the company is far behind its original and even revised goals for delivering a sophisticated "robotaxi."
Musk promised a hands-free, cross country Tesla driverless demo in 2017. His company has yet to complete that mission. In 2019, Musk predicted that Tesla would be making autonomous robotaxis in 2020, and cars without steering wheels or pedals in 2021.
On a first-quarter earnings call, Tesla CFO Zachary Kirkhorn said, "If you look at the size of our fleet and you look at the number of customers who did not purchase FSD up front or on a lease and maybe want to experiment with FSD, this is a great option for them." He added, "As the portfolio of subscription customers builds up, then that becomes a pretty strong business for us over time."
To refine unfinished driver assistance features, Tesla gives some owners early access to a beta version of FSD — effectively turning thousands of everyday drivers into software testers on public roads in the U.S.
Tesla did not immediately respond to a request for further information, including whether FSD subscribers will be eligible to participate in the FSD Beta program.
In recent months, as CNBC previously reported, Tesla has also been telling regulators at the California DMV and NHTSA that its FSD, and FSD Beta technology amounts to a "level 2" system — a reference to vehicle automation categories written by a professional association for engineers, SAE International.
According to the SAE's standards, last updated in May 2021, drivers of a level 2 vehicle are expected to "constantly supervise" it, including by steering, braking or accelerating "as needed to maintain safety." Level 2 vehicles have features like automated lane centering that works in conjunction with adaptive cruise control. By contrast, a level 4 vehicle may not need a steering wheel or pedals and can operate as a local, driverless taxi in limited conditions like fair weather.