Tesla FSD monthly subscription model: Musk ends $8,000 flat-rate purchase
Elon Musk announces Tesla FSD will switch to a $99/month subscription-only model starting Feb 14. Analyze the impact on TSLA stock and the race against Waymo.
The days of owning Tesla's premium driver-assist software for a one-time fee are numbered. Tesla CEO Elon Musk announced that Full Self-Driving (FSD) will transition to a subscription-only model starting February 14, 2026. It's a massive pivot that signals the EV maker's aggressive push toward becoming a software-as-a-service (SaaS) titan.
Tesla FSD monthly subscription model: Pricing and Impact
In an early morning post on X, Musk stated that the company will stop selling FSD for a flat rate, which was previously priced at $8,000. Instead, users must pay a monthly fee of $99. The move didn't sit well with investors initially, as TSLA shares dipped more than 2% on Wednesday. This strategy aims to lower the entry barrier but ensures a recurring revenue stream for the future.
Losing Ground to Waymo and Slumping Deliveries
Despite Musk's optimism, Tesla's autonomous ambitions are under pressure. Alphabet's Waymo is currently leading the race with over 450,000 weekly paid rides as of late last year. Meanwhile, Tesla reported a 16% year-over-year drop in Q4 deliveries, totaling 418,227 units. With production also down by 5.5%, the company's upcoming earnings report on January 28 will be a critical moment for the stock.
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