Tesla Motors (TSLA.US) has announced a complete overhaul of the sales model for its "Full Self-Driving" (FSD) advanced driver-assistance system, moving entirely to a monthly subscription service. CEO Elon Musk revealed this strategic shift on the social media platform X, indicating the change is planned to take effect after February 14.
While Musk did not elaborate on the specific reasons for the decision, the service currently carries a monthly fee of $99. This move will eliminate the substantial one-time purchase cost for FSD, which is approximately $8,000, significantly lowering the initial barrier for customers to experience the technology.
Despite being named "Full Self-Driving," the technology currently still requires the driver to continuously monitor the road and be prepared to take control at any moment. Amid challenges with slowing sales growth, Tesla is pivoting its strategic focus towards technology-centric growth drivers, such as FSD, autonomous robotaxis, and robotics.
Last year, Tesla conceded its title as the world's largest electric vehicle manufacturer to China's BYD. It is noteworthy, however, that while market valuations and fundamental prospects for Tesla have increasingly shifted towards its exclusive AI supercomputing-powered FSD system, Robotaxi, and the Optimus humanoid robot, the company's electric vehicle sales and core auto business fundamentals have not been diminished to insignificance.
The automotive business remains the current pillar for cash flow and the balance sheet, and it also forms the essential foundation for the FSD data feedback loop and fleet scale, as a scalable vehicle production capacity is ultimately necessary for Robotaxi operations.
