Elon Musk mandates Tesla to install and demo Full Self-Driving Beta for every new delivery
Elon Musk has mandated Tesla employees to install and demo Full Self-Driving Beta for every customer taking delivery in North America.
Full Self-Driving (FSD) Beta is a level 2 Advanced Driver Assistance System (ADAS) that automates all aspects of driving on city streets and highways, but it requires the driver’s attention at all times – hence why it is still only a level 2 system despite its name.
Tesla’s goal is to improve the system until it can eventually remove the requirement to have the driver’s attention, making it a true self-driving system.
The automaker is currently rolling out version 12 of its FSD Beta system. which has been touted has a major step forward for the system by powering vehicle controls with neural nets.
Tesla sells its Full Self-Driving package for $12,000 or a $200 a month subscription.
The automaker has never revealed the take rate of the package, but some data would point to a lower than 20% take rate in North America. It is likely much lower globally as other markets don’t have access to FSD Beta.
In order to boost the take rate, Elon Musk has informed Tesla employees this morning to install the FSD Beta software on all new cars being delivered and give short test drives to the new buyers.
The CEO wrote in an email to employees:
Going forward, it is mandatory in North America to install and activate FSD V12.3.1 and take customers on a short test ride before handing over the car.
Musk says that he wants more people to realize “FSD actually works”:
Almost no one actually realizes how well (supervised) FSD actually works.
Over the years, Tesla has continuously cut down on the tasks related to delivering vehicles as it often becomes a bottleneck in the automaker’s operations.
It is not rare these days to take delivery of a Tesla vehicle in minutes and Tesla employees would refer you to videos available on the car’s center display in order to inform the new owners of any functionality inside the vehicle.
Requiring a demo drive with every new delivery is going to greatly increase the delivery workload at Tesla stores and delivery centers.
The CEO seems aware as he finished his email on this note:
I know this will slow down the delivery process, but it is nonetheless a hard requirement.
The new initiative also matches Tesla’s referral program incentives. If a new buyer buys a Tesla with a referral code, they get 3 months of free Full Self-Driving package.
Electrek’s Take
Sorry Tesla delivery people. This is going to create a massive backlog, especially now at the end of the quarter.
As for the effectiveness of this, I don’t know. To be fair, I have yet to try v12. Speaking of, it’s weird that Tesla is going to push it to every new car before delivery, but that many long-time FSD owners like myself have yet to receive the update.
Maybe v12 is so impressive that Elon really believes it will increase the take rate to demo it at delivery – even though everyone who buys with a referral code gets it for free for the first 3 months and presumably tries it during that period of time.
Now, I do like the fact that the first time someone is exposed to FSD Beta, it will be in the presence of a Tesla employee, who presumably is going to emphasize the fact that this is a level 2 ADAS and it requires your attention at all times. No exception.
But I think that Tesla and Elon, in particular, are again ignoring the only real thing that would significantly increase confidence in FSD Beta: strong and transparent data.
Yes, personal experience with the system is useful, but like Youtube videos, it’s all anecdotal data. Tesla is now getting close to 1 billion miles of FSD Beta data and it hasn’t released anything of value from this data.
If Tesla wants to people to realize that FSD “actually works”, it needs to show the data it does.
Because let’s be honest “supervised FSD Beta” actually works, but that’s because of the “supervised” part. There would be tens of thousands of FSD Beta crashes if it weren’t for driver supervision.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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