Tesla has announced a strategic shift to offer its Full Self-Driving capability as a monthly subscription service, signaling a pivot in its autonomous vehicle monetization approach. The move comes as the company confronts growing competition in the autonomous driving space.
- Full Self-Driving now available as $200/month subscription or $2,400/year
- Waymo reported over 450,000 paid weekly rides in December 2025
- Estimated $2.4 billion in annual revenue if 1 million users subscribe
- FSD remains in beta with limited regulatory approval and deployment
- Subscriptions aim to improve customer retention and recurring revenue
- Previous one-time buyers may qualify for refunds or legacy access
Tesla has transitioned its Full Self-Driving (FSD) feature from a one-time purchase to a recurring monthly subscription, marking a significant evolution in its software revenue model. The new pricing is set at $200 per month, or $2,400 annually, with early adopters eligible for a $1,000 discount on the annual rate. This change aligns with broader industry trends toward subscription-based services for advanced vehicle software features. The decision reflects increasing pressure from rivals, particularly Waymo, which reported surpassing 450,000 paid weekly rides in December 2025—demonstrating a robust, scalable commercial deployment of autonomous ride-hailing. In contrast, Tesla’s FSD remains in beta testing with limited real-world deployment and regulatory approval, affecting its ability to generate consistent revenue or user trust at scale. The shift to subscription pricing is expected to improve customer retention and create a more predictable revenue stream for Tesla. Analysts estimate that if 1 million active FSD subscribers adopt the new model, Tesla could generate up to $2.4 billion in annual recurring revenue. However, uptake will depend on the feature’s demonstrated safety, reliability, and regulatory acceptance in key markets. The transition impacts Tesla owners who previously purchased FSD outright, many of whom may seek refunds or remain on legacy agreements. Automakers and tech firms alike are watching closely as the move could set a precedent for how autonomy software is priced and delivered in the future.