Tesla shares gain as Musk offers US customers self-driving software trial

By Thomson Reuters Mar 26, 2024 | 11:20 AM

(Reuters) – Shares of Tesla rose about 5% on Tuesday after CEO Elon Musk said the electric carmaker will offer U.S. customers a free trial of its driver-assist technology for a month.

Musk has long touted the Full Self-Driving (FSD) technology as a potential cash cow for the company, but has failed to keep his promise of a fully autonomous driving experience, amid stiff regulatory and legal scrutiny of Tesla’s safety and marketing.

“All U.S. cars that are capable of FSD will be enabled for a one-month trial this week,” Musk said in a post on social media platform X.

According to two emails, he has also told employees to offer new buyers and owners of serviced vehicles demonstrations of FSD.

Slower-than-expected demand for electric vehicles and mounting competition in China is hurting Tesla’s sales and margins, forcing the company to provide incentives and discounts to boost deliveries.

Tesla has cut prices to boost sales and grab a larger market share, in the hopes of selling its high-margin autonomous technology products to a large base of customers in the future.

“(Free trials) could be a step in the right direction for people beginning to adopt the technology. Maybe this will entice drivers to purchase full self-driving for $12,000 at some point,” said Ken Mahoney, CEO of Mahoney Asset Management.

The FSD software, which Tesla says does not make its vehicles autonomous and requires active driver supervision, has also been offered at a subscription of $199 a month.

(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)