Tesla Kills $8,000 FSD Purchase, Goes Subscription-Only
Elon Musk announces February 14 deadline to buy Full Self-Driving outright. After that, it's $99 per month or nothing.
Tesla is abandoning the upfront purchase model for its driver-assistance software.
CEO Elon Musk announced Tuesday that the company will stop selling its $8,000 Full Self-Driving (FSD) package after February 14. Going forward, FSD will only be available as a monthly subscription at $99.
"Tesla will stop selling FSD after Feb 14," Musk wrote. "FSD will only be available as a monthly subscription thereafter."
The move marks a significant strategic shift for a feature Musk has touted for years as a future robotaxi license that would appreciate in value. It turns out FSD is just a subscription product.
The Economics
At $99 per month, it would take nearly seven years of subscriptions to match the $8,000 one-time price. That's a terrible deal for buyers who expected to keep their Tesla long-term.
But the math explains why Tesla is making the change. FSD adoption has been stubbornly low—reportedly in the low double-digit percentages even after years of development and price cuts. Most Tesla owners simply don't want to pay $8,000 for software that still requires constant supervision.
A subscription model lowers the barrier to entry. Owners can try FSD for a month before a road trip, then cancel. That's likely to increase active users even if lifetime revenue per customer falls.
Pricing History Shows the Struggle
The FSD pricing journey tells its own story.
Tesla launched the package at $5,000 in 2016 with promises of full autonomy "later this year." By late 2022, the price had climbed to $15,000 as Musk claimed capabilities were improving. In April 2024, Tesla cut it to $8,000 and slashed the monthly subscription from $199 to $99.
Each price change reflected a different strategic bet. The cuts acknowledged that customers weren't buying the vision Musk was selling.
What FSD Actually Does
Despite its name, Full Self-Driving isn't fully self-driving. It's a Level 2 driver-assistance system that requires human supervision at all times. Drivers must keep their hands on the wheel and eyes on the road. The system can handle highway driving and navigate city streets, but it makes mistakes that require intervention.
This reality is the core problem. Tesla has been selling a product called "Full Self-Driving" for nearly a decade without delivering on the name. The subscription model is, in some ways, a more honest framing: you're paying for a driver-assist feature that works today, not a future robotaxi asset.
Competitive Context
The timing is notable. Rivian just launched Autonomy+ at $50 per month or $2,500 one-time—half Tesla's monthly price with a cheap buyout option. Mercedes-Benz is integrating NVIDIA's autonomous driving platform. Chinese competitors offer similar features at lower prices.
Tesla's technology lead in driver assistance has narrowed. Subscription-only pricing may reflect the reality that FSD can no longer command premium economics.
Implications for Shareholders
Musk's 2025 CEO compensation package includes a milestone requiring 10 million active FSD subscriptions. Moving to subscription-only makes that target easier to hit—you can't be an active subscriber if the only option is one-time purchase.
That's the cynical read. The charitable interpretation is that Tesla believes subscription economics will drive higher engagement and revenue over time than upfront purchases from a small percentage of buyers.
Either way, the February 14 deadline creates urgency. Buyers who want the one-time option have a month to decide.
For Tesla investors watching the stock's performance since December's delivery miss, the FSD pivot is another data point suggesting the company is pulling every lever available to stabilize financials heading into a challenging quarter.