- Tesla’s Model 3 Standard and Model Y Standard have neutered Autopilot by removing lane centering.
- One YouTuber invited to try out the Model Y Standard ahead of its launch was told by Tesla that it did this to up-sell buyers on Full Self-Driving.
- FSD costs $8,000 while the stripped-down Standard trims only shave about $5,000 off the price.
When Tesla revealed its cheaper Model 3 and Model Y “Standard” trims last week, the reception was a bit chilly. Fans were either just fine with the reveal, or they felt that Tesla stripped out too many features to make the car worth the money—especially when lower-cost options like the Nissan Leaf and Chevy Bolt are hitting the market at a lower price.
But when it became apparent that Tesla neutered its Autopilot driver assistance system by removing lane centering in its cheaper models, people began scratching their head. After all, why would Tesla want to neuter a feature that it’s so famously known for? According to YouTuber and Tesla influencer Everyday Chris, who was invited by Tesla to check out the new Model Y standard ahead of its unveiling, Tesla says that it wants to nudge more people towards buying its Full Self-Driving software.
Chris reveals in his video that when he spoke to Tesla about removing Autosteer—that’s the official name of the lane centering feature in the broader Autopilot package—the automaker told him that since the car was now cheaper, more buyers can purchase Full Self-Driving.
That’s right, according to that justification, Tesla stripped a core feature away from its most affordable option in the U.S. and stripped out a bunch of features so that it can sell it for $5,000 less, than up-sell you with an $8,000 software upgrade. Tesla also offers FSD as a $99 per month subscription. This works out to nearly the same monthly cost as financing $5,000 at 6.5% interest over 60 months, so maybe that wash-out is enough to convince buyers.
Here’s the full quote from Chris’ video:
When I spoke to Tesla, they said the reason why they did what they did was because they want more people to get into Tesla’s Full Self-Driving. Because the price of the vehicle is already kind of low, they want you to upgrade to Full Self-Driving. With the new naked Model Y, you’ve got to steer yourself unless you pay for Full Self-Driving.
We’d love to verify this reasoning with Tesla directly, however, the automaker famously dissolved its PR department a number of years ago.
This is a weird turning point for Tesla. Carving out the most basic driver-assistance features to create artificial scarcity isn’t exactly well-received in other tech companies or industries, and the automaker has historically never removed Autosteer from a car with Autopilot after it launched in order to sell it for a lesser price. Needless to say, this is part of the reason why folks are making disparaging remarks over the value proposition of the new Standard trims.
The problem here is that the math just doesn’t add-up. Why would anyone try to save money by buying a version stripped of creature comforts just to spend more on a software feature that isn’t yet feature complete?
It could be that Tesla’s margin is just incredibly low on the Standard trim. Kia’s top brass said earlier this year that low-cost EVs don’t make a ton of money and that it had “zero interest in not making enough money” when it comes to EVs. Tesla could be in a similar boat and is simply looking to either improve that margin by selling software (which typically has a significant margin) or pushing buyers towards the more expensive Premium models.
Whether or not Tesla’s gamble pays off is anyone’s guess. From the outside, it seems unlikely that buyers of the Standard model will spend more on FSD in its current state. But if the feature is important to buyers over, say, acoustic glass and more comfortable suspension, then it at least provides an opportunity to purchase the entire package at a lower cost than if they were to buy FSD outright on top of the Premium trim.
