Tesla’s (TSLA) Chief Executive Officer (CEO) confirmed plans to raise the price of the Full Self Driving System (FSD). CNBC reports that the 25% price increase will take effect on September 5, 2022. The current price of $12,000 for the advanced self-driving system is to be honored for orders made before that day.
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Tesla’s Self-Driving System
Currently, Tesla charges $199 per month on a subscription basis for the FSD system. Musk has not yet indicated how much the subscription will cost once the new pricing structure comes into play in September.
All new vehicles from Tesla come with a standard driver assistance package dubbed Autopilot, with features like Traffic Aware Cruise Control. According to CNBC, the features rely on cameras, other sensors, and hardware to ensure the car is centered in its lane and moves at the speed of the surrounding cars.
Tesla is currently doing a limited release of FSD’s latest version to a small pool of users. CNBC reports that the approach to offering Tesla Beta to some customers continues to elicit criticism from the National Highway Traffic Safety Administration (NHTSA).
Bloomberg reports that the limited Autopilot system remains under scrutiny from Federal regulators over concerns it might be defective. The NHTSA has already reviewed almost 100 crashes involving cars using limited features. On its part, the California Department of Motor Vehicles has accused the giant electric car company of deceptive marketing practices regarding Autopilot and FSD.
What is the Future Price of Tesla Stock?
While Tesla stock is down by about 17% year-to-date, Wall Street is optimistic about its long-term prospects. According to TipRanks’ analyst rating consensus, Tesla is a Moderate Buy based on 18 Buys, five Holds, and six Sells. In addition, the average Tesla price target is $921.59. Analysts’ sentiments are bullish with almost 5.96% upside potential to TSLA’s current stock price.
Also, TipRanks’ Stock Investors tool shows that investor sentiment is currently positive on Tesla’s stock. Over the past 30 days, 3.9% of the best-performing portfolios tracked by TipRanks increased their exposure to Tesla stock.
Last week, CFRA analyst Garret Nelson reiterated a Buy rating on Tesla stock and increased the price target to $1,245 from $1,125. The new Twitter stock price target implies a 43.2% upside potential from current levels.
Final Thoughts
Tesla stock has taken a hit in recent days owing to a broader market correction. A move to increase the price of FSD amid soaring regulatory pressure appears to have spooked the market, fuelling the recent sell-off. However, Wall Street remains optimistic despite the recent weakness.
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