Elon Musk Believes Tesla's Prices Will Rise When Autonomous Tech Increases

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【Summary】Musk recently took to Twitter to announce that prices for Tesla’s electric cars will “rise significantly” when the vehicles become fully autonomous.

Original Vineeth Joel Patel    Aug 19, 2019 5:00 AM PT
Elon Musk Believes Tesla's Prices Will Rise When Autonomous Tech Increases

Autonomous cars are expected to be insanely expensive. And electric vehicles are already much pricier than gasoline-powered cars. Combine those two things, and self-driving electric vehicles are sure to cost a pretty penny. Tesla already offers some of the most expensive electric cars and the brand's vehicles have some self-driving capabilities. But Tesla is set on coming out with fully autonomous cars. Care to guess what that will do to prices?

More Tech, Higher Prices

On Twitter, Disruption Research asked Elon Musk a question: "Do consumers have limited time left to buy a Tesla car, since prices would have to go up severalfold to balance supply & demand once you solve FSD?" Musk, not wanting to mince words, answered with a simple "Yes." Later, he sent out a tweet with a more thorough answer.

"To be clear, consumers will still be able to buy a Tesla, but the clearing price will rise significantly, as a fully autonomous car that can function as a robotaxi is several times more valuable than a non-autonomous car."

As we stated earlier, Tesla's cars aren't cheap. Opt for a fully-loaded Model X with a fancy paint job, 22-inch wheels, Tesla's latest Autopilot system, and some other goodies, and you're looking at a vehicle that costs $143,200. Sure, there's the affordable Model 3 , but even that starts at $41,100. So, an increase in pricing doesn't sound that appealing. But it's what will happen when Autopilot becomes fully autonomous.

Teslas Will No Longer Just Be Cars

Tesla, though, isn't increasing prices to offset the costs of the technology – at least it's not marketing it that way. Instead, the electric automaker is marketing its upcoming self-driving cars as being a way of earning passive income when they're not being used. As Musk put it in his tweet, having the ability to have a car work as a "robotaxi" when you don't need it is much more valuable than that old jalopy sitting your driveway at the moment.

For consumers that can afford the latest and greatest, this is good news. It confirms that Tesla is indeed working on fully-autonomous technology and is very close to offering it on its vehicles. For everyone else that can't afford Tesla's already-expensive cars, it's more bad news. Musk has previously pointed out that Tesla has a problem with pricing its vehicles affordably, but that won't stop the increase.

"[I]t's important to appreciate that the demand for Model 3 is insanely high. The inhibitor is affordability," stated Musk during the automaker's fourth quarter earnings call back in 2018. "It's just like people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary."

The increase in pricing and move to self-driving cars , for Tesla, is necessary, as the automaker wants to have 1 million robotaxis on the road next year. Pricing hasn't been announced yet, but it's sure to be expensive.

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