Tesla Shifts Full Self-Driving to Subscription-Only
▼ Summary
– Tesla is eliminating the one-time purchase option for its Full Self-Driving (Supervised) software, making it available only through a monthly subscription starting February 14.
– The change could boost low adoption rates, as only 12% of Tesla customers currently pay for FSD, and help fulfill a key goal of reaching 10 million active subscriptions for Elon Musk’s pay package.
– This shift may also serve as a legal hedge, potentially capping liabilities from lawsuits and regulatory actions over unmet promises of future vehicle autonomy.
– Tesla faces significant legal challenges, including a California ruling on deceptive marketing and class action lawsuits regarding the capabilities of FSD and Autopilot.
– While Tesla’s FSD is considered a leading driver-assistance system in the U.S., global competitors like Rivian, Ford, GM, and Chinese automakers are advancing their own rival technologies.
Tesla is making a significant change to how customers can access its advanced driver assistance technology. The company will no longer offer a one-time purchase option for its Full Self-Driving (Supervised) software, shifting entirely to a monthly subscription model. This strategic pivot, announced by CEO Elon Musk, marks a departure from years of sales strategy and could influence the company’s financial performance, Musk’s compensation, and its ongoing legal challenges. The move comes as rival automakers globally accelerate development of their own advanced systems to compete with Tesla’s market-leading offering.
For years, Tesla has sold its FSD package, which does not enable full autonomy and requires active driver supervision, at fluctuating upfront costs. The price reached a high of $15,000 before settling more recently at $8,000. A subscription alternative launched in 2021 at $199 monthly, which was later reduced to $99 per month in 2024. Musk had frequently advised customers to opt for the permanent purchase, suggesting the software’s value would rise substantially over time. However, he stated the outright sale option will end on February 14, without commenting on potential future adjustments to subscription pricing.
While no official reason was given, several factors likely drove this decision. Tesla executives have publicly expressed disappointment with the adoption rate. Data from October 2025 indicated only 12% of Tesla owners had purchased FSD. Transitioning to a lower-barrier subscription model could improve these numbers, particularly during an anticipated difficult first quarter for the company. Furthermore, increasing subscription counts is directly tied to Musk’s ambitious compensation package. One critical requirement for him to unlock the full value of his pay deal is achieving 10 million active FSD subscriptions, measured daily over a three-month period, before late 2035.
The shift may also serve as a legal safeguard. Tesla and Musk have long promoted the idea that their vehicles contain all necessary hardware for future autonomy, requiring only software updates. This claim has not held true, with the company implementing numerous hardware upgrades over the years. Musk has acknowledged that many existing vehicle owners would likely need new hardware. The sale of FSD was predicated on a similar promise of eventual full autonomy, a milestone Tesla has yet to reach. This gap between marketing and reality has spawned considerable legal trouble.
In December, a judge ruled that Tesla engaged in deceptive marketing practices concerning FSD and Autopilot. The ruling initially ordered a suspension of Tesla’s manufacturing and dealer licenses in California for 30 days, though the DMV stayed the order, giving Tesla at least 60 days to comply by renaming the products or delivering software that fulfills its promises. The company also faces multiple class-action lawsuits over claims about its vehicles’ future self-driving capabilities. By eliminating the option to buy FSD outright, Tesla could be limiting its potential financial liabilities should these lawsuits proceed to trial.
Despite the controversies, Tesla’s FSD is widely considered the most capable driver-assistance system available in the U.S. market. However, its success has not deterred competitors. Rivian recently outlined plans to launch its own comparable software, beginning with a major expansion of its hands-free driving feature’s operational area. Legacy automakers like Ford and General Motors have their own hands-free systems. In China, a crucial market for Tesla, rival manufacturers are aggressively developing similar technologies, with some even including advanced driver assistance as a standard feature in their vehicles.
(Source: TechCrunch)
