Tesla has dropped the prices of its electric vehicles (EVs) and its Full Self-Driving (FSD) software over the past few weeks, reigniting larger discussions about the automaker’s overall pricing strategy. In response to one person criticizing the frequency of Tesla’s price changes, Elon Musk has pointed to the dealership model, noting that most automakers change prices on their vehicles more regularly than consumers may realize.
On Friday, Tesla reduced the price of the Model S, X, and Y by $2,000, after the company cut the price of monthly FSD subscriptions in half earlier this month. On Saturday, Tesla also cut the price of the outright FSD purchase option, to which some consumers and shareholders responded with frustration.
Tesla’s pricing strategy comes down to one key difference from its competitors
Following the news, Omar of Whole Mars Blog noted that he finds Tesla’s pricing strategy incoherent, to which Sawyer Merritt noted that this was one of the rare downsides of the direct-to-consumer sales model, despite the extra pricing transparency.
“I think that if you had a monkey throw shit at a keyboard to come up with a pricing strategy for Tesla it would be more coherent than what we’ve seen,” Omar said on Sunday. “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?”
In response, Musk noted that the dealership model doesn’t offer the same level of transparency that a direct-to-consumer model offers, with the MSRP on a car often being far from its actual price.
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.
Tesla prices must change frequently in order to match production with demand.
— Elon Musk (@elonmusk) April 21, 2024
To be sure, last week’s Model S, X, and Y price cuts followed additional price cuts just a few weeks ago, which included the Model 3, and saw some vehicle prices dropping off by as much as $5,000.
Last year, following aggressive price cuts that sent shockwaves through the industry, Musk noted that Tesla would be opting for a high volume of vehicles delivered at slightly lower margins, especially given its future potential for revenue from software and services.
“We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin,” Musk said during the company’s Q1 2023 earnings call. “However, we expect our vehicles, over time, will be able to generate significant profit through autonomy.”
“So we do believe we’re like laying the groundwork here, and then it’s better to ship a large number of cars at a lower margin, and subsequently, harvest that margin in the future as we perfect autonomy. This is an extremely important point.”
What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send your tips to us at tips@teslarati.com.
For years, there have been images and videos across social media platforms that have reminded me of when I was a 15-year-old kid teased by “Xbox 720” videos on YouTube. These videos are of the supposed “Tesla Phone” that Elon Musk was secretly developing in between leading Tesla with its electric cars and SpaceX with its reusable rockets.
Would you buy a Tesla phone ? pic.twitter.com/aaTwvvIJit
— Tesla Owners Silicon Valley (@teslaownersSV) October 6, 2023
Although Musk has put those rumors to bed several times, it was never completely out of the realm that he could get involved in cell phones in some capacity. Think outside the box and more macro-level, though. Instead of reinventing the computer, Musk reinvented connectivity by developing Starlink with SpaceX.
It could be something similar, TD Cowen analyst Gregory Williams said in a note last week, where he hinted SpaceX could be gathering some steam to acquire T-Mobile.
Williams said it would be the “clear choice” for SpaceX if it decided to go through with a network acquisition. He also suggested AT&T.
The move would be possible through selling more of its own stock, which would help SpaceX raise the money to purchase T-Mobile, which would cost roughly $300 billion. It could be one of the moves SpaceX makes post-IPO in terms of an acquisition: it already acquired Cursor AI for $60 billion.
Other analysts, like Dan Ives of Wedbush, believe SpaceX and Tesla will eventually merge into one anyway, and that conglomeration could come as soon as this year, some have said.
The implications of SpaceX purchasing T-Mobile are massive. A combined entity would create a truly ubiquitous network: T-Mobile’s terrestrial 5G towers and Starlink’s growing constellation of Direct-to-Cell satellites. This would essentially eliminate dead zones across the U.S. and potentially globally.
SpaceX would instantly become a full-scale facilities-based carrier with satellite differentiation; a huge advantage. This would pressure AT&T and Verizon heavily.
There are also concerns like a potential reduction in long-term competition, and of course, a deal of that size would face intense scrutiny from government agencies.
The strategic fit is compelling due to the existing Starlink–T-Mobile partnership and complementary technologies (space + terrestrial). It could create a dominant integrated communications player. However, the regulatory, financial, and execution hurdles are enormous — this remains highly speculative with no indication SpaceX is actively pursuing it right now.
Tesla revealed a major new Cybercab detail in a guide it released for First Responders, showing new territory in its beliefs and intentions for the ride-hailing-focused vehicle that entered production in April.
The First Responders Guide is released to give fire departments, paramedics, and other emergency personnel the proper guidance on what to do in the event of an accident, entrapment, or other situation that would require immediate attention.
On one of the pages of the First Responders Guide, Tesla revealed a stark detail about the Cybercab, which could help personnel enter the vehicle more easily in case of an emergency.
Tesla Cybercab has one important piece that AI4 cars might need for FSD
It shows Tesla has no intention of releasing any Cybercab units that were initially proposed for ride-hailing services for the general public with any manual controls, meaning a steering wheel or pedals:
“A Cybercab equipped with steering wheel, brake pedal, and an acceleration pedal is typically an engineering or test vehicle, and operates at SAE Level 2 autonomy. Cybercab is not typically equipped with a steering wheel or acceleration and brake pedals.”
New official Cybercab documentation from Tesla:
“A Cybercab equipped with steering wheel, brake pedal, and an acceleration pedal is typically an engineering or test vehicle, and operates at SAE Level 2 autonomy. Cybercab is not typically equipped with a steering wheel or… https://t.co/P6ut1mZyzr pic.twitter.com/yq6skl9s2J
— Sawyer Merritt (@SawyerMerritt) June 27, 2026
This is a major development for those who continue to believe Tesla planned to release the Cybercab with any sort of manual controls so that passengers could take over if needed. However, when Tesla started manufacturing production versions of the Cybercab in Giga Texas earlier this year, they were spotted without a steering wheel or pedals.
It essentially confirms the company has no intentions of bringing manual controls to the car’s production versions. Some have argued that the likelihood of Tesla having something
There still are some Cybercab units out there with a steering wheel and pedals, and as Tesla said, these cars are engineering or test vehicles, which have Safety Monitors on board to help the car out of a precarious situation or emergency.
Tesla released the Full Self-Driving v14 ‘Lite’ suite to owners of Hardware 3 or AI3 vehicles today, adding several new features to the vehicles that were once believed to be capable of unsupervised self-driving.
Now, Tesla has released this modified suite to older Tesla vehicles, adding plenty of new features and capabilities.
Here are the full release notes for the suite:
- Distilled the intelligence from HW4 V14 into HW3. This allows HW3 to directly learn how to handle scenarios using HW4 V14 as a guide. This process unlocks the improvements that have been made to HW4 including Reinforcement Learning (RL) and offline models for HW3.
- Improved both proactive and reactive responsiveness across a wide variety of categories including navigation handling, merges and forks, pedestrian interactions, traffic lights, and vehicle cut-in scenarios.
- Improved general comfort in nominal scenarios through fewer false slowdowns, smoother steering and more consistent lane centering.
- Introduced parking, unparking, and reversing capabilities.
- Added Arrival Options for you to select where FSD should park: in a Parking Lot, on the Street, in a Driveway, or at the Curbside.
- Speed Profiles are now available at all times, to further customize driving style preference.
These improvements, according to Tesla’s Head of AI, Ashok Elluswamy, help distill the driving behavior from AI4’s v14 series into both the camera and compute configurations of AI3.
Tesla Full Self-Driving v14 ‘Lite’ for older cars finally gets released
He added:
“It includes destination options and speed profiles on city roads, but more importantly significantly improved safety. We hope you’ll enjoy it, once the build ships wide.”
FSD v14 Lite is now rolling out to AI3 early-access customers. Based on the feedback, will rollout to more customers over the next few weeks.
This build distills the driving behavior from AI4’s v14 series into both the camera and compute config of AI3. It includes destination…
— Ashok Elluswamy (@aelluswamy) June 29, 2026
Tesla will continue to roll out the v14 Lite suite more widely in the coming weeks, the company said.
Tesla Phone? Not quite, but close: analyst
Tesla reveals huge Cybercab detail in new guide for First Responders
