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Tesla faces turmoil amid FSD investigation: A chance to buy the dip?
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Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?

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Analysts Notebook joined discussion · May 9 08:09
Tesla's latest Full Self-Driving version, FSD v12.3, has been under the spotlight since its launch, acclaimed for delivering a driving experience akin to human-like autonomy and hailed as a game changer in AI driving technology. In a move to broaden its user base, Tesla also introduced a one-month free trial for the new FSD system. However, a recent YipitData report indicates a tepid subscription rate of less than 2% from the free trial program, casting doubts on market expectations regarding user uptake of the latest FSD iteration.
According to YipitData's latest figures, nearly 3,500 Tesla owners trialed the company's Full Self-Driving (FSD) service over the past month. However, only about 50 of these trials converted into FSD subscriptions or purchases, translating to a conversion rate of just under 2% as of May 5th. The data reveals a cautious approach among Tesla drivers towards paying for subscriptions to its autonomous driving technology.
Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?

It remains unclear whether the statistic of 3,500 users trialing Tesla's Full Self-Driving (FSD) service represents the entirety of Tesla's 1.8 million North American users or just a subset. Tesla's official website specifies that vehicles must be updated to software version 12.3 or higher to start the free trial, raising the question of whether the slow growth in trial numbers could be due to certain models not yet supporting the update.
Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?
This is indeed a possibility, as feedback from various Tesla owner forums indicates that many owners of vehicles with the software version 2024.8.9 have not yet received the update notification for version 12.3, though the exact number of these vehicles is unknown.
Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?

From a statistical standpoint, a trial sample of fewer than 3,500 out of nearly 1.8 million users does not provide significant statistical insight. Only by expanding the trial base can the true customer acceptance of FSD be accurately gauged. This explains why Elon Musk has required Tesla's sales staff to promote the download of the version 12.3 FSD software package at the time of new vehicle deliveries; after all, updating more vehicles to the latest version is crucial for increasing the number of users eligible for the free trial.
Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?
Tesla reduced the price of its Full Self-Driving (FSD) package from $12,000 to $8,000 and lowered its monthly subscription fee from $200 to $99. Previously, the purchase price of FSD peaked at $15,000. Tesla appears to be using price cuts as a strategy to encourage more users to try FSD, a tactic whose effectiveness remains to be seen.
Despite Tesla's aggressive pricing strategy for its Full Self-Driving (FSD) technology, more significant uptake among consumers remains a challenge, fundamentally rooted in the pace of development of the technology. While the version 12.3 of FSD has been touted as the closest yet to human-like driving experience, some users have raised concerns about its smoothness in handling finer details, such as acceleration or braking at intersections. In response, Elon Musk posted on May 8th on X that the upcoming version 12.4 would include further optimizations for these details, and tests for more advanced versions 12.5 and 12.6 also underway.
Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?
Tesla's Full Self-Driving (FSD) initiative is deeply rooted in artificial intelligence technology. The company's strong commitment to enhancing its AI capabilities is evident from its strategic financial investments. Elon Musk has recently highlighted Tesla's plan to allocate approximately $10 billion to AI training and inference activities throughout 2024. He stressed the critical nature of these investments, asserting that any company not heavily investing in AI this year is likely to fall behind in the competitive race.
Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?
Despite this aggressive investment in technology, the broader acceptance of FSD among consumers still faces significant hurdles, indicating that there is a long road ahead before universal adoption is achieved, and may also impact Tesla's stock price, especially since the market may have already factored in some of the expected progress in FSD development into its valuation.
Tesla FSD Free Trial Program: With Only 2% Willing to Pay, Is FSD Really That Bad?
Source: Tesla, Teslascope, YipitData, X
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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