Tesla is changing its autopilot sales model. Why is Musk transforming the FSD strategy?

Full Self-Driving (FSD) autopilot software in Tesla will be available only on a monthly subscription basis starting February 14, CEO Elon Musk wrote on social network X. Now, owners of the company's electric cars in the United States can either buy FSD, paying a one-time fee of $8,000 for it, or subscribe for $99 per month, Reuters writes. Amid this news, Tesla shares fell 0.5% on the premarket on January 14.

The decision comes amid the company's difficulties in getting customers to pay for FSD, which Musk has called critical to Tesla's future, Business Insider emphasizes . During a third-quarter earnings call last October, Tesla's CFO told investors that only about 12% of Tesla's current fleet subscribed to FSD, with quarterly revenue from the service down from the same period a year earlier.

Growing the number of FSD subscribers is also a key element of Musk's massive compensation package approved by Tesla shareholders in November 2025. One of the milestones required to receive the full payout package of up to $1 trillion is reaching 10 million FSD subscriptions, Business Insider reports.

In addition, the launch of the autonomous driving system, which helps with realignment and maneuvering in traffic, but does not make the car fully autonomous, attracted the attention of regulators and became the subject of litigation. In 2025, the U.S. National Highway Traffic Safety Administration launched an investigation into 2.88 million Tesla vehicles equipped with the FSD system. The reason was more than 50 reports of violations of road safety rules and a series of accidents, recalls Reuters.

In addition, Tesla could face a temporary ban on car sales in California. As Business Insider notes , a state judge found that the marketing of the FSD and Autopilot systems misled consumers by giving the impression that the cars were fully autonomous. The regulator required Tesla to change the advertising language, warning that otherwise the company could face a suspension of its license to sell cars in California.

FSD includes more features than the Autopilot package, which the company describes as a standard driver assistance system designed to enhance safety and convenience. Autopilot includes adaptive cruise control and automatic lane keeping. Those features are also included in FSD, in addition to automatic lane change, autoparking and a number of other features, according to data on Tesla's website.

Musk's announcement to move the FSD system to monthly subscriptions comes after Tesla, previously the world's largest seller of electric cars, ceded the lead in global electric car sales to China's BYD in early 2026, The Wall Street Journal notes.

Global deliveries of electric cars Tesla in the fourth quarter of 2025 decreased by 16% to 418.2 thousand units, falling short of the consensus forecast formed earlier by the company itself. The annualized figure fell 8.6% to 1.64 million vehicles. BYD, on the contrary, increased sales both for October-December 2025 and for the whole last year, Bloomberg notes . Chinese rival Tesla put 2.26 million electric cars on the market in 2025, although its sales growth was the weakest in five years.

This article was AI-translated and verified by a human editor