- Tesla will stop selling its full self-driving systems as a one-time purchase in February.
- CEO Elon Musk confirmed on X that Tesla will start selling FSD as a subscription-only feature.
- The motive is unclear, but it could be a smart decision for both Tesla and buyers.
If you’re considering purchasing Tesla’s full self-driving software, you have a month to do so before its perpetual license turns into the tech industry’s worst nightmare: a subscription.
Tesla CEO Elon Musk announced on X that the automaker plans to remove the ability to purchase FSD entirely starting next month. Subscription isn’t new to FSD, with Tesla offering this since late 2022. But it has historically sold subscription alongside lifetime unlocking. All this is changing now.
The industry has been moving toward subscriptions for some time, especially when it comes to driver assistance technology. Other automakers like Ford and GM are already doing this today with their pricing models for driver aids. It opens up recurring revenue streams — which investors love to see — and may make it easier to attract new users rather than expensive one-time fees.
I should note that the FSD is also a tough sell at its current price of $8,000. It would take 80 months to break even (a monthly subscription costs $99). New car buyers can switch between vehicles more quickly From that.
Paying monthly can be a smart financial decision, even if it’s annoying to know that you’re paying monthly for Netflix and Spotify, plus internet access and full self-driving in the same car. Subscribing may also be the most future-proof option.
The feature does not carry over to the buyer’s next Tesla vehicle except in rare promotions from the company. Over the years, many buyers have spent a huge amount expecting the FSD to become fully autonomous while they own the car. It never happened. FSD is still one important feature that requires full attention.
Photo: Mac Hogan/InsideEVs
Tesla did not give a reason for this change.
I’m speculating here, but it could be part of a larger rebranding. The automaker is currently under scrutiny in its largest market – California –For its brand of partially automated driving features. Moving to a subscription-only model could give Tesla an opportunity to rebrand FSD before further investigation by regulators and also save face by not placing direct blame on the product’s capability.
One might also wonder What will happen to Hardware 3 vehicles. Musk said this during the company’s earnings call Cars equipped with HW3 will not be capable of full autonomy The company also originally sold it. Instead, the automaker said it plans to offer an update for HW3-equipped cars if Owner bought FSD.
Where the waters get muddy is for owners who purchased a Tesla equipped with HW3 after FSD is now available as a subscription. Musk & Co. sold The promise of passive income and the future of taxis with Tesla’s FSD service. Some buyers may have purchased a car for this reason, but are not yet ready to purchase the software package — which costs up to $15,000 in 2022 — outright. Now that Tesla plans to be subscription-only, the fate of HW3 buyers is more up in the air than ever.
After all, full self-driving still won’t drive itself. This alone seems like an argument for a subscription from a consumer perspective. Owners can try it out for a month or two and decide if it’s worth paying for based on current capabilities. And when Tesla improves the features, owners can try them again to see if they warrant their hard-earned money.
It also opens up room for Tesla to play the long game of pushing future used goods buyers into a subscription model. It allows the company to raise prices over time more easily. Smart decision? Sure – in many ways, this seems like a win for Tesla on the business side.
