CFRA Vice President Garrett Nelson joins ‘Varney & Co’ with analysis on Teslas market performance.
Electric vehicle-maker Tesla announced Saturday that it cut the price of its Full Self-Driving (FSD) driver assistant software by one-third as the company reaffirmed its commitment to self-driving technology.
The change slashes the price for FSD software to $8,000 from $12,000 for U.S. customers. Tesla CEO Elon Musk believes the technology will eventually become a major source of revenue for Tesla, the world’s most valuable automaker.
However, the company has struggled and failed for years in its aim to achieve self-driving capability, with the technology coming under growing regulatory and legal scrutiny.
Last year, Musk said that the price of FSD – which was then priced at $15,000 – was very low, adding the value of the car would increase dramatically if it became autonomous.
TESLA ANNOUNCES PRICE CUT FOR CERTAIN MODELS
Tesla is cutting the price for its Full Self-Driving software to $8,000 from $12,000. (Photo by Sjoerd van der Wal/Getty Images / Getty Images)
Tesla calls its driver assistant features Autopilot or FSD but says they don’t make the vehicles autonomous, and they require active driver supervision.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 147.05 | -2.88 | -1.92% |
The price cuts for FSD come after Tesla’s first quarter delivery figures came up short of Wall Street analysts’ expectations, declining for the first time in four years.
TESLA’S WEAK FIRST-QUARTER DELIVERIES AN ‘UNMITIGATED DISASTER’ FOR MUSK
Tesla CEO Elon Musk views self-driving or autonomous technology as a way to increase the value of its cars, but Tesla’s FSD requires active driver supervision. (REUTERS/Tingshu Wang / Reuters Photos)
The company announced 387,000 vehicles delivered in the first quarter – well below expectations of about 443,000 and an 8.5% decrease compared to the first quarter of last year.
Those woes prompted Tesla to announce that it will lay off more than 10% of its global workforce, which will affect about 15,000 workers, according to a filing with the Securities and Exchange Commission (SEC).
TESLA TO LAY OFF MORE THAN 10% OF WORKFORCE
Tesla’s first quarter deliveries showed the first decline in nearly four years and were well shy of analysts’ expectations. (Photo by John Paraskevas/Newsday RM via Getty Images / Getty Images)
“Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth, there has been a duplication of roles and job functions in certain areas. We believe it is extremely important to look at every aspect of the Company for cost reduction and increasing productivity. This action will prepare Tesla for our next phase of growth, as we are developing some of the most revolutionary technologies in auto, energy and artificial intelligence,” the company said in the filing.
In a bid to boost demand, the EV-maker slashed the U.S. prices of its Model Y, Model X and Model S by $2,000 each on Friday. Additional price cuts were announced in Germany, China and other countries in Europe, the Middle East and Africa.
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Tesla is set to announce its quarterly earnings on Tuesday. The company’s stock is down 40.8% year to date as of Sunday.
FOX Business’ Chris Pandolfo, Stephen Sorace, and Reuters contributed to this report.
