Tesla Shifts to Subscription Model for Full Self-Driving (Supervised)
Tesla has announced a significant shift in its approach to marketing its Full Self-Driving (FSD) software. CEO Elon Musk revealed that the company will no longer offer the option to purchase FSD with a one-time fee. Instead, from February 14, 2024, access will solely be available through a monthly subscription.
Tesla’s Subscription Model for Full Self-Driving
This strategic move marks a departure from Tesla’s historical sales tactics, where the FSD suite was available at various price points. The highest price reached $15,000 in 2022, but more recently, it was priced at $8,000. The subscription model began in 2021 at $199 per month but has since dropped to $99 monthly.
Impact on Tesla’s Business and Legal Standing
Musk’s decision could influence Tesla’s financial outcomes and his own compensation package, valued at $1 trillion. The shift aims to enhance subscription uptake among customers, as only 12% of Tesla owners had opted for FSD by October 2025.
- Projected Goal: Achieve 10 million active FSD subscriptions by late 2035.
- Adoption Rate: A mere 12% of all Tesla customers currently pay for FSD.
The subscription model may also mitigate legal risks for Tesla, which has faced scrutiny over its marketing practices. A California court ruling found that the company had engaged in misleading marketing techniques regarding the autonomy capabilities of its vehicles. Legal challenges continue, including class-action lawsuits related to these unmet promises.
Industry Response and Competitor Developments
Despite being the leader in driver-assistance software, Tesla faces rising competition. Rivian, Ford, General Motors, and other automakers have made strides in developing similar systems. As these companies enhance their offerings, some provide driver assistance as standard features.
Tesla maintains that its FSD remains among the most advanced options available. However, by switching entirely to a subscription-based model, Tesla hopes to boost adoption rates and address customer satisfaction while minimizing potential legal liabilities.
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