Elon Musk's Relief: Few Tesla FSD Subscribers

Elon Musk, the charismatic CEO of Tesla, recently expressed a sentiment that might seem counterintuitive to some: he's "kind of glad" that not many people bought the Tesla Full Self-Driving (FSD) subscription. But why? Let's delve into the reasons behind Musk's statement and explore the implications for Tesla's financials and customer satisfaction.



First, let's address the elephant in the room: the cost of the FSD subscription. At $15,000, it's a significant investment for potential buyers. This high price point may have deterred many customers from purchasing the FSD package, especially those who were unsure about the frequency of use or who were price-sensitive. Musk's statement can be seen as a relief that Tesla didn't have to manage a larger number of FSD subscribers with older hardware, which would have required more extensive upgrades.



Now, let's discuss the hardware limitations. Musk admitted that the older Hardware 3 computers in some Tesla vehicles may not be capable of supporting the full unsupervised version of the FSD software. This means that Tesla would have to upgrade these vehicles' hardware, which could be costly and time-consuming. By having fewer FSD subscribers, Tesla can manage the upgrade process more efficiently and allocate resources to other aspects of its business, such as production and sales.

Moreover, Musk has previously expressed uncertainty about the safety level of the FSD software on older hardware. Having fewer subscribers allows Tesla to focus on improving the software and ensuring its safety before rolling it out to a larger audience. This approach aligns with Tesla's commitment to prioritizing safety and innovation.

Regulatory hurdles are another factor to consider. Autonomous driving regulations are still evolving, and Tesla may face challenges in obtaining approval for unsupervised FSD in certain regions. Having fewer subscribers allows Tesla to navigate these regulatory hurdles more easily and adapt its software to meet the required safety benchmarks.

Tesla's decision to upgrade Hardware 3 computers for FSD subscribers has several implications for the company's financials and customer satisfaction. On the financial side, Tesla will incur significant costs to upgrade the hardware, which may contribute to an increase in operating expenses. However, offering free upgrades to FSD subscribers is likely to improve customer satisfaction and retention. By providing free upgrades, Tesla may be able to retain FSD subscribers who would otherwise have considered switching to a competitor or purchasing a new Tesla vehicle with Hardware 4.

In conclusion, Elon Musk's statement that he is "kind of glad" that not many people bought the Tesla FSD subscription can be attributed to several factors, including the high cost of the subscription, hardware limitations, safety concerns, and regulatory hurdles. While the upgrade process will have financial implications for Tesla, such as increased operating expenses, it is likely to improve customer satisfaction and retention. The company's ability to manage the upgrade process efficiently and minimize disruptions will be crucial in determining the overall impact on its financials and customer satisfaction. As Tesla continues to innovate and adapt, it remains a leader in the electric vehicle and autonomous driving spaces, with a strong focus on safety, sustainability, and customer satisfaction.