Elon Musk, the CEO of Tesla, has shed light on what customers are really buying when they purchase a Tesla. According to Musk, in many cases, customers are not just buying a car, but rather the company’s innovative Full Self-Driving (FSD) technology, with the vehicle being an added bonus.
Surge in FSD Adoption
The demand for FSD is surging in areas where regulators have given the green light. In the US, customers are increasingly prioritizing the FSD package over the vehicle itself. Active FSD subscriptions have reached 1.48 million, marking a 56% year-over-year increase. Musk notes that in markets where FSD is allowed, take-up is extremely high, with customers eager to get their hands on the technology.
What Customers Are Really Buying
Musk believes that for many customers, the primary purchase is the FSD technology, with the car being a secondary consideration. “I think for a lot of people, they’re actually buying Tesla Full Self-Driving with a car attached, as opposed to a car with FSD,” Musk said. This shift in perspective highlights the significance of FSD in the eyes of Tesla customers.
Wider FSD Rollout
As FSD continues to expand to new markets, it is likely to have a profound impact on both road congestion and the economics of Tesla’s growth. The wider rollout of FSD will depend on how quickly approvals and adoption expand. Musk expects that as more countries approve the system, demand will jump, leading to increased adoption and further growth.
Expert Insights
While some experts, like Ross Gerber, co-founder of Gerber Kawasaki, have raised concerns about Tesla’s FSD system, comparing it unfavorably to Waymo’s technology, others are optimistic about the potential of FSD. Aaron Burnett, CEO of Mach 33, has seen his annual mileage double after adding autonomy to his vehicle, with the car handling driving duties 99% of the time.
Tesla-SpaceX Merger
Musk was also asked about a potential merger between Tesla and SpaceX. While he did not provide a definitive answer, he noted that there is increasing overlap between the two companies, particularly with the Terafab project. This has led some to speculate about a potential merger between the two companies in the future.
Market Reaction
Tesla shares declined 1.30% to $374.10 during regular trading on Wednesday and further declined 4.61% during overnight trading. Despite this, Tesla’s stock has shown significant growth over the past year, with a 12.62% increase.
Future Outlook
As Tesla continues to innovate and expand its FSD technology, it will be interesting to see how the market reacts. With the company’s focus on growth and innovation, Tesla is poised to remain a major player in the tech industry. Whether or not a merger with SpaceX is on the horizon, one thing is certain: Tesla’s FSD technology is revolutionizing the way we think about transportation.