Significantly cutting prices and entering the China market may not save Tesla FSD.

After announcing the layoffs, Tesla continued to "take the medicine", this time with FSD(Full-Self Driving).

　

According to overseas reports, Tesla officially adjusted the buyout price of FSD from $12,000 to $8,000, and the price reduction was converted into about RMB 27,400.In addition to lowering the buyout price of the package, Tesla simultaneously lowered the monthly subscription price of FSD in North 700 yuan (Canada and the United States), from the past $199 to $99, which is equivalent to saving RMB every month.

　

Tesla’s move is obviously an extension of Musk’s dissatisfaction with the FSD option rate. Just as China automakers are keen on price wars, Tesla also realizes that "price" is also the core factor that affects users’ acceptance of FSD in overseas markets. On the other hand, Musk mentioned that FSD "may enter the China market soon" when replying to the user’s message-the impact of this move can not be underestimated for improving the coverage of FSD.

　

At present, Tesla has sold more than 5.5 million vehicles in history, and nearly 2 million vehicles have been sold in North America alone. However, the coverage of FSD is not ideal. The data in January 2023 showed that the number of subscribers in North America was 400,000, and the penetration rate was close to 25%.

　

The problem is that a considerable part of this is the first "hardcore powder" that supports Tesla, probably because the pricing is too high. The data shows that the probability of new car buyers choosing FSD will be reduced to 2% in 2023. Obviously, this is the reason why Musk is worried.

　

Therefore, in order to expand the coverage of FSD, it is imperative to reduce prices and open up new markets. However, it is hard to say whether entering the China market can expand the mass base of FSD. On the other hand, the strategy of attracting consumers to buy Tesla trams through intelligent driving may not work in the China market.

　

　

From today’s point of view, Tesla’s main sales models, such as Model 3/Y/X/S, don’t seem to have many advantages. Nowadays, pure electric vehicles have been running everywhere, and most of the places where Tesla trams were leading in the past are no longer leading. If it weren’t for the accumulated user reputation and brand awareness, Tesla’s global sales may be even less optimistic.

　

In other words, Tesla’s achievements in the past are largely due to "extraordinary technology", and among many new technologies, FSD is undoubtedly the most subversive. To put it simply, the leading edge of FSD is embodied in "underlying technology" and "comprehensive experience".

　

"The underlying technology" means that Tesla FSD can almost be regarded as the technical vane of global intelligent driving. Now most of the intelligent driving technologies we know are started by FSD.

　

For example, the combination of "BEV+Transformer+OCC", which is considered as the core of the new generation of intelligent driving technology, was almost all started by Tesla, and the technical base of BEV+Transformer was unveiled at Tesla AI Day in 2021, which solved the problem of "how to realize environmental awareness without relying on high-precision maps" in the industry. At present, almost all car companies’ intelligent driving technology is based on this scheme, and as the originator and staunch supporter of the "pure visual intelligent driving" technical scheme, Tesla’s related research also points out the direction for the industry.

　

In 2023, Tesla launched the V12 Beta version of FSD, which brought the long-rumored "end-to-end" technology. According to Musk, FSD with "end-to-end" technology uses AI big model to deal with all intermediate links in the process of intelligent driving from perception to execution, which greatly improves the reliability of the system and saves "millions of lines of code", making the industry a big surprise.

　

Then, the intelligent driving head enterprises including Tucki announced to follow up the "end-to-end" technical scheme, and institutions including Guangzhou Automobile Research Institute also began to explore the true value of end-to-end technology for intelligent driving ability, which quite stirred up a thousand waves.

　

On the level of "comprehensive experience", FSD can provide full-scene pilot-assisted driving and high-order automatic parking experience just like the domestic intelligent driving scheme in the case of "complete body". Musk also used FSD live on "X" (Twitter), even before looking for Zuckerberg’s offline shelf, he drove FSD in the past, and took over at 0 in the whole process.

　

It can be seen that FSD is the best intelligent driving system in theory from both technical and experience levels, and it is also the benchmark of all intelligent driving systems from a global perspective.In that era of "I have no one", I believe that the technological advantages including FSD are the main reason why consumers are willing to be "mice" to try Tesla.

　

Therefore, the price reduction this time and the intention to enter the China market all reflect Tesla’s refocusing on FSD, that is, the core technology. In contrast, the price adjustment is irrelevant. Only in the China market, we have our own "far ahead" intelligent driving technology, and the true level of Tesla FSD is unknown. Moreover, the big price reduction of Tesla FSD in China market has not been synchronized, and the price of 60,000 yuan is believed to be difficult to attract new users.

　

　

In terms of absolute technical height, Tesla FSD can still keep ahead with Dojo supercomputing system and "end-to-end" technology, but it needs to be emphasized that smart driving is a technology that needs to be strongly combined with local actual scenes, that is to say, even if FSD performs well in the United States, it is impossible to translate it to China market.

　

Take Huawei ADS 2.0, the first echelon in China, and XNGP in Tucki for example, they have been able to achieve pilot-assisted driving in mixed scenes covering the whole country, and have been optimized in characteristic scenes. For example, both of the above are optimized for unexpected situations such as pedestrian crossing and ghost probes. At the same time, Huawei ADS 2.0 also emphasizes the AEB active safety capability in different speed domains, and the detection range has also expanded from the front to four directions, which can better prevent pedestrians or non-motor vehicles that don’t know where to come from.

　

Therefore, if Tesla’s FSD really wants to enter China, it must also consider directional optimization for the road conditions in the middle, otherwise it will come to a crossroads full of two-wheeled electric vehicles, and even the smart FSD may be down.From another point of view, even if the intelligent driving ability of local enterprises in China is not the best in the underlying technology, they can still optimize their functions by understanding the local road conditions, and finally even surpass FSD in actual experience.

　

There are also various factors that pose a competitive threat to FSD. Unlike consumers in overseas markets, there are almost only Tesla FSD to choose from, and there are many options for products that experience close to Tesla FSD in China market. In this way, even if Tesla FSD can really enter the China market as Musk said, it may not attract potential users to choose Tesla electric vehicles, not to mention that the optional price of the FSD is still high.

　

Tesla only comes standard with the basic version of AP(AutoPoilot) for its electric vehicles, and only has basic functions such as LCC, AEB and BSD. If you want to upgrade to an enhanced version of AP(EAP) that supports high-speed NOA, ALA and APA functions, you need to spend 32,000 yuan to choose. Although FSD is not yet open in China, consumers can "pre-order", of course, the cost is not low, and it needs 64,000 yuan.

　

Assuming that the price of FSD will be adjusted in line with that of North China after the formal opening of the market, and it will be reduced by one third, then the optional price of FSD will still need 42,000 yuan, which is still on the high side compared with the optional price of high-end intelligent driving in China market. For example, the optional price of Huawei ADS 2.0 on individual models is 15,000 yuan, and the optional price of BYD Tengshi N7 is also 15,000 yuan. At the same time, when buying a new car, there are often optional discounts, ranging from 5,000 yuan to more direct relief.

　

Since the experience can’t be absolutely leading, what reason do consumers have to spend a lot of money to choose Tesla FSD?

　

In addition, the domestic market has also seen a trend of popularization of smart driving and continuous cost reduction. A few days ago, DJI Chenghang Platform launched a solution that claimed that it could realize full-scene intelligent driving at a cost of 7,000 yuan. On April 22nd, Baidu Apollo team also released a low-cost intelligent driving solution ANP3 Pro. Although the cost is not as low as that of DJI Chenghang, it is still attractive for most car companies to realize full-scene intelligent driving at a cost of 10,000 yuan.

　

All indications are that the popularity of smart driving in the China market is very fast, and the mystery has long faded. The involution of the China market is far beyond Tesla’s imagination. If FSD enters the China market without change, I believe it will be difficult to make too much splash.

　

　

On the eve of the Beijing Auto Show, Tesla announced that it would continue to adjust the price in the China market. The starting price of the new version of Model 3 Huan dropped to 231,900 yuan, and the price of Model Y once again entered less than 250,000 yuan. However, the effect brought by the price reduction this time is not as ideal as expected. Sun Shaojun 09, a car blogger who knows more about the sales channels, said that "the effect is relatively average". If the price reduction can’t stimulate the growth of orders, Tesla will really fall into crisis.

　

The respect for the "first principle" runs through Musk’s entire career. Now, analyzing the problems that Tesla has in the products, we might as well return to the "first principle".

　

Why did Tesla sweep the world and become the representative of pure electric vehicles? I think it is mainly in two aspects.

　

First of all, Tesla showed the world that pure electric vehicles are "far ahead" in the basic experience.For example, "horsepower equality" and some intelligent functions can not be provided by fuel vehicles in the past, or they need to be experienced at a very high price. Therefore, for electric vehicles, the higher the motor power, the better, and the higher and stronger the voltage platform. Only when the basic experience can make consumers feel "far ahead" will they be willing to buy electric vehicles.

　

Unfortunately, Model 3 was a product eight years ago, and Model Y has been sold for five years. Its performance indicators have become unremarkable in the global market. Except BMS system is still leading, both battery life performance and charging performance are surpassed by competitors.

　

Secondly, the leading experience brought by FSD has obviously changed consumers’ imagination of "cars".They never imagined that the car could really control its own speed, change lanes independently, avoid pedestrians and avoid risks, and finally send people to their destination … The leading technology is Tesla’s core competitiveness from beginning to end.

　

A thousand words can be summed up in one sentence. When Tesla is no longer determined to forge ahead and pursue the ultimate technological advantage, then the decline in sales will become inevitable. As the backbone of Tesla and even the "soul figure", the biggest problem may still lie in Musk:If it can put enough energy back into Tesla and technical research, make up its mind to reform the internal unreasonable system and truly return to the thinking of "first principle", I believe Tesla’s recovery will come very quickly.

For example, the adjustment of FSD price this time comes from Musk’s insight and direct inspiration on business issues, but no one knows whether the drama of "the emperor is wise" will still appear and whether it will remain correct and effective all the time.

Beijing international automotive exhibition (Beijing Auto Show) will be held grandly from April 25th to May 4th. The theme of this auto show is "New era, new car", which is the weather vane of "cars moving from electrification to intelligence".

By then, head brands including BYD, Xiaomi, AITO Wenjie, Tucki, Weilai, Ideality, Extreme Krypton, Extreme Yue and Chang ‘an Deep Blue will all appear. In addition to the "big competition" of new models, the promotion of autonomous driving technology, the evolution of intelligent cockpit and the combination of AI model and automobile will all be important highlights. The account Tramway, which is owned by Lei Technology and is "concerned about electric vehicles and more intelligent", will send a report group to Beijing for first-line professional reports, so please pay attention.