Tesla Inc. has announced a significant change to how customers can access its Full Self-Driving (FSD) software. Starting February 14, 2026, the one-time purchase option for FSD will be eliminated. Instead, the advanced driver-assistance system will be available exclusively through a monthly subscription priced at $99. The previous upfront cost of $8,000 has been removed without a direct replacement. CEO Elon Musk communicated the decision on his social media platform, X, providing no additional rationale. Following the announcement, Tesla’s equity closed the trading session 1.8% lower.
Strategic Pivot Amidst Subdued Adoption
The move appears driven by the technology’s lower-than-expected uptake among vehicle owners. In October 2025, Chief Financial Officer Vaibhav Taneja acknowledged that only 12% of the Tesla fleet actively uses FSD, a figure falling short of the company’s internal projections. By transitioning to a lower monthly fee, the electric vehicle maker is clearly attempting to reduce the barrier to entry, hoping the $99 recurring charge will prove more palatable than a single $8,000 payment.
This strategic shift also ties directly into Musk’s compensation package. The agreement includes a milestone requiring Tesla to maintain ten million active FSD subscribers over a consecutive three-month period by the end of 2035. Eliminating the one-time purchase option ensures that all new FSD users will be counted as subscribers, directly contributing toward this ambitious target.
Legal Challenges and Regulatory Scrutiny
The timing of this announcement is notable. In December 2025, a California court ruled that Tesla had engaged in misleading advertising regarding the capabilities of its FSD and Autopilot systems. The state’s regulatory body was subsequently directed to suspend Tesla’s manufacturing and dealer licenses for 30 days, an order that has been temporarily stayed. The court gave the automaker 60 days to either rename its products or deliver on the promised autonomous functionality.
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Tesla faces further pressure from multiple class-action lawsuits where customers are seeking restitution for the unfulfilled promise of full autonomy. Legal analysts suggest that by removing the permanent purchase option, Tesla may be seeking to limit its potential liability in these ongoing cases.
Mounting Competitive and Financial Pressure
As Tesla navigates these legal and strategic challenges, its competitors in the autonomous driving space are advancing. Waymo, a subsidiary of Alphabet, reported over 450,000 paid weekly rides across five U.S. cities in December 2025, with plans for expansion into London and Tokyo. In contrast, Tesla’s own robotaxi service remains limited to Austin, Texas, and still requires human safety drivers behind the wheel.
The company’s forthcoming fourth-quarter 2025 results, scheduled for release on January 28, are anticipated to highlight growing headwinds. Market experts forecast earnings per share of $0.34, nearly halved from the same quarter the previous year. This follows a reported 16% year-over-year decline in vehicle deliveries for Q4, marking the second consecutive year of falling quarterly delivery figures.
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