Leading electric-vehicle manufacturer Tesla Inc. (TSLA) has launched subscription services option for its advanced driver assistance software which will be going for a monthly payment of $199 rather than paying a $10,000 upfront.
This subscription service is dubbed “Full Self-Driving capability” and will be available for some Tesla customers. The company is expecting this subscription services will generate recurring revenue and expand the customer base for pricy features like parking assistance and changing lanes while on a highway.
The company said the existing installed features do not make the vehicles autonomous hence they require the full attention of a physical driver who has their hands on the wheel.
The company says the subscription service is available for vehicles installed with Full Self-Driving computer 3.0 or above. Clients who want to upgrade to the new hardware will have to part with $1,500.
“FSD capability subscriptions are currently available to eligible vehicles in the United States. Check your Tesla app for updates on availability in other regions,” said Tesla.
Back in April during an earnings call, the company’s chief financial officer, Zachary Kirkhorn, revealed that the company plans to introduce subscription services which would generate recurring revenue for Tesla. The CFO cautioned that there would be a period of time in which cash reduces in the future.
“If you look at the number of customers who did not purchase FSD upfront or on a lease and maybe want to experiment with FSD, this is a great option for them,” said the CFO.