Elon Musk Defends Tesla’s Recent Massive FSD Price Cuts Against Suggestions “A Monkey Can Come Up With a Better Pricing Strategy” – Musk Says “Only a Fool Thinks the MSRP is the Real Price”

Tesla has stirred up controversy after the EV maker cut the FSD price to $8,000 from $12,000. Multiple Tesla community members have criticized the price cuts and are demanding a refund. Elon Musk has responded in typical Musk fashion.

After promising for years that the prices of Tesla’s FSD package would steadily increase, over the weekend, Tesla lowered the price of its full self-driving option from $12,000 to $8,000.

Tesla did not officially announce this FSD price cut; instead, the EV maker quietly implemented it through an update to the company's online configurator.

The current price drop is a massive $4,000 discount on the FSD package or a 33% discount on the FSD option.

If this wasn’t a large enough discount, the current FSD price cut follows an earlier one on September 1, 2023, when the FSD price dropped from $15,000 to $12,000.

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Overall, since September last year, Tesla has cut the price of the FSD option by a whopping $7,000. If Tesla cuts FSD prices by only $500, the FSD option will officially be at a massive 50% discount.

One of the biggest incentives for people to shell out $15,000 on an incomplete software package was Elon Musk’s multiple pronouncements that Tesla is just around the corner from solving level 5 autonomy.

Musk warned individuals who were delaying their FSD purchase that the prices would go up as Tesla released more features and that, eventually, FSD would increase the value of their vehicle to as high as $200,000.

Those inclined to believe Musk’s statements bought the FSD package, whereas those more skeptical of the Tesla CEO delayed their purchase. Unfortunately, the latter group is now being rewarded, whereas those who believed Musk’s statements are left feeling duped.

However, if you think Tesla’s FSD pricing strategy is hectic, its vehicle pricing is even worse.

The EV maker just this month increased the price of the Model Y twice by $1,000 each time and, after a couple of weeks, lowered the price by $2,000, bringing back the price to what it was at the start of the month.

The price cuts were first implemented in the US and Canada; however, they appear to be now implemented globally on Tesla’s Model S, Model 3, Model X, and Model Y lineup.

In addition, Tesla instituted a massive 22% price cut on the company’s higher-end Model S and X vehicles for the Chinese market.

All the price changes over the weekend have undoubtedly raised controversy in the Tesla community. The controversies are multifaceted and touch many parts of Tesla’s business, from the consumers to Tesla’s future products and stock performance.

1. People who paid $12,000 and $15,000 for Tesla’s FSD package are demanding a refund
2. Tesla lowering the price of the FSD has cast doubt on Elon Musk’s Tesla massive robotaxi bet
3. Foundation Series Cybertruck owners who paid $12,000 for the FSD package are especially irked since the price was cut even before FSD was activated on their trucks
4. Analysts who follow Tesla stock are warning of damage to the company’s brand caused by these haphazard price changes

Should Tesla reimburse people who paid higher for FSD?

From a strictly legal perspective, it doesn’t appear consumers will be able to compel the EV maker to refund the price they paid for FSD.

However, even if Tesla is within its right to adjust prices as the company sees fit, as mentioned above, most people who shelled out $15,000 for the FSD package are Tesla loyalists.

Due to this fact, we believe it is in the company’s long-term best interest not to create a track record of burning its most loyal customers.

Some options available to Tesla to redeem early FSD buyers, short of mailing them a check with the difference, are to allow current FSD owners unrestricted ability to transfer their package to a future vehicle at no cost.

Tesla can also offer a discount to FSD buyers who shelled out $15,000 or $12,000 for the software on future vehicles. This will ensure loyalty to the brand while at the same time increasing the satisfaction of the die-hard Tesla believers.

Tesla’s robotaxi bet and Tesla’s FSD price cut

The expectation for Tesla’s FSD prices is that the functionality will improve over time, and the prices will increase accordingly.

Tesla has recently rolled out a significant revision to the FSD software. Not only has Tesla rebranded FSD Beta to FSD (Supervised), but the EV maker has also completely upended the fundamental architecture that underpins it.

Empirically speaking, FSD v12, more specifically the current publicly available version, FSD v12.3.4, is much more human-like and is a significant improvement on previous FSD iterations.

However, the fact that Tesla significantly lowered FSD prices while the EV maker is making strides toward level 5 autonomy suggests that Tesla might have lost some confidence regarding the timeline of when the company will reach full autonomy.

Elon Musk recently announced that Tesla has shifted all focus internally towards an upcoming vehicle that Musk calls “Robotaxi.”

There isn’t much publicly available information about the Tesla Robotaxi; however, the EV maker has shifted away from plans for a cheaper $25,000 vehicle to prioritize this revolutionary product.

Musk has said every other vehicle on the road will be like a horse and a carriage compared to the “Robotaxi.”

This is all well and good; however, the recent price cuts cast doubt on Tesla’s exciting robotaxi future. Tesla is currently scheduled to unveil the Robotaxi on August 8, and we will provide you with more details as the unveiling event approaches.

Should Tesla Specifically refund Foundation Series Cybertruck owners?

The same reasons for and against refunding other Tesla FSD buyers apply here; however, the situation with Foundation Series Cybertruck owners is that the full-self-driving package, even in its incomplete form, is currently unavailable on the Cybertruck.

This means the FSD price for early Cybertruck owners was significantly lowered even before the functionality was turned on.

In this circumstance, Tesla should refund the $4,000 difference to early Cybertruck owners.

Doing so is more manageable given that there are only a little more than 3,800 Cybertruck owners in the US.

Are the constant price changes causing damage to Tesla’s brand?

Some prominent Tesla investors believe that all the price cuts Tesla has instituted since the start of 2023 are not having the intended effect.

Tesla cuts prices to increase demand; however, a faction of the Tesla investor base believes the price cuts are incentivizing buyers to wait for more price cuts, throwing the EV maker into a never-ending downward spiral.

Since Tesla started cutting prices, the EV maker's profit from each vehicle has significantly decreased.

Together with the falling profits, Tesla’s stock price has also taken a beating. The EV maker’s market cap is now down more than $700 billion since its peak in November 2021.

The fall in Tesla’s stock price, decreasing sentiment among Tesla investors, and the frequent price cuts have split the Tesla community.

Following the price cuts over the weekend, Tesla bull Whole Mars Catalog wrote on X stating that a monkey throwing excrement at a keyboard can come up with a more coherent pricing strategy for Tesla than what is currently going on.

Whole Mars Catalog added, “Subscription price will go up once we release FSD. Actually, we will cut it. We are raising Model Y prices. Actually, now we are lowering them. It’s amusing to follow but probably confusing to consumers. Should I buy FSD now because the price was cut? Or should I wait for the next FSD price cut and save thousands of dollars?”

Another Tesla online personality chimed in, explaining the issue: “This is one of the downsides of a direct-to-consumer model. The price transparency is great, but it causes a lot of confusion and/or people to wait for more discounts.”

Continuing, “At traditional auto dealerships, it's often that every customer walks out having paid a different price for a car, but that isn't broadcasted to the world.”

Weighing in on the controversy, Elon Musk wrote, “Other cars change prices constantly and often by wide margins via dealer markups and manufacturer/dealer incentives. Only a fool thinks the “MSRP” is the real price.”

To the chagrin of Tesla investors and buyers unhappy with the frequent price changes, Musk added, "Tesla prices must change frequently to match production with demand.”

Musk’s statement suggests that based on internally available data, not only has Tesla found it necessary to make these frequent price changes, but he believes this strategy is typical for automakers and that Tesla doesn’t plan to change it anytime soon.

Undoubtedly, this will further inflame Tesla investors who were hoping for the frequent price cuts to end, and we’ll be sure to keep you posted on future Tesla price adjustments and ensuing consumer and investor responses.

Until then, visit our site, torquenews.com/Tesla, regularly for the latest updates.

So, what do you think? Are you surprised to see Tesla massively cutting FSD prices? Also, do you think these price cuts are harming Tesla’s brand? Let us know your thoughts in the comments below.

Image: Courtesy of Zack on X

For more information,  check out: Recently Let Go Tesla Executives Are Airing Their Dirty Laundry in Public, Call Elon Musk a “Pigeon CEO”

Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla, from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.