Tesla Sets Price for Self-Driving Feature, Lays Groundwork for Ride-Hailing Service -- Update
October 20 2016 - 4:36PM
Dow Jones News
By Tim Higgins
Tesla Motors Inc. set its retail price for the option that would
allow a car to drive fully autonomously at $8,000, and hinted that
those who paid it would be able to offset the cost through a
ride-hailing network that would compete with Uber Technologies Inc.
and Lyft Inc.
The price and mention of the ride-hailing Tesla Network appeared
on the company's website on Wednesday shortly after an announcement
that, effective immediately, all new Tesla vehicles will include
the hardware necessary to drive themselves. The $8,000 price covers
the software to enable that hardware, an option called Full
Self-Driving Capability, which will cost $10,000 if purchased
separately from the vehicle.
The autonomous-driving software needs to be validated, and
regulators must approve it.
The price for autonomous driving for the first time sets a
benchmark for car manufacturers that aim to market self-driving
cars including Alphabet Inc.'s Google, BMW AG, and Ford Motor
Co.
"This is the first time somebody has put a price -- a consumer
price -- toward what that feature set might cost," Stephanie
Brinley, an industry analyst with IHS Markit, said. "It sets a
level of expectations....It draws a line in the sand."
The website's description of Full Self-Driving Capability
included the first concrete sign that Tesla is considering a
ride-sharing business. The description included a terse statement
that "using a self-driving Tesla for car sharing or ride hailing
for friends and family is fine, but doing so for revenue purposes
will only be permissible on the Tesla Network, details of which
will be released next year."
Mr. Musk in July laid out his vision of self-driving cars
forming the basis of a ride-hailing network as part of the
company's long-term plan in July. He envisioned a world in which
Tesla owners could put their vehicles to work generating
income.
"Since most cars are only in use by their owner for 5% to 10% of
the day, the fundamental economic utility of a true self-driving
car is likely to be several times that of a car which is not," Mr.
Musk wrote in July.
Several companies are racing to develop fully self-driving cars
including Alphabet Inc.'s Google, BMW AG, and Ford Motor Co.
General Motors Co. and Uber, in particular, are betting that
ride-hailing services will be the first commercial use of
autonomous vehicles. Uber is testing self-driving taxis in
Pittsburgh, Penn., and GM has partnered with Uber-competitor Lyft
with plans to test self-driving Chevrolet Bolt electric cars.
Write to Tim Higgins at Tim.Higgins@wsj.com
(END) Dow Jones Newswires
October 20, 2016 16:21 ET (20:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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