Tesla's infotainment upgrade gets 40% discount after NHTSA recall order

Tesla cut the cost of its infotainment upgrade by 40% about a week after the National Highway Traffic Safety Administration (NHTSA) asked it to recall nearly 159,000 cars due to a defective touchscreen. While the upgrade brings an array of new features while deleting older ones, it also fixes the problem identified by the agency.

Owners of a Model S or a Model X built before March 2018 can buy the infotainment upgrade, which the firm calls simply Infotainment Upgrade, via the Tesla App. It adds in-car video streaming, Caraoke and Tesla Arcade, among other functions, and it removes the AM, FM and Sirius XM radios. Significantly, it also includes a faster and more responsive touchscreen that doesn't rely on the faulty hardware identified in the NHTSA's findings.

Tesla charged $2,500 for the upgrade until January 2021, when it quietly slashed the price to $1,500. It adjusts the cost of its option packages and its cars on a regular basis, so the drop isn't unusual, and we wouldn't be surprised if the price of the bundle changes again in the not-too-distant future. What's odd is the timing.

One way to interpret the sudden drop is that Tesla hopes telling its customers they'll be able to stream "Cobra Kai" on Netflix while they wait for their car to charge will reduce the number of vehicles it will sooner or later need to recall, assuming it chooses not to challenge the NHTSA's report. Recalling a car to replace a three-cent bolt is expensive, so replacing 159,000 touchscreens could cost millions.