Tesla Will Stop Selling Full Self-Driving As A One-Time Package Next Month

• Tesla will stop selling Full Self-Driving as a one-time purchase in February.
• CEO Elon Musk confirmed on X that Tesla will begin selling FSD as a subscription-only feature.
• The motive isn’t clear, but it could be a smart decision for both Tesla and buyers.

If you’ve been thinking about buying Tesla’s Full Self-Driving software, you’ve got a month to do it before its perpetual licensing 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 outright beginning next month. A subscription isn’t new for FSD—Tesla has been offering this since late 2022. But it has historically sold the subscription alongside a lifetime unlock. That’s all changing now.

The industry has been moving towards subscriptions for quite some time, especially for driver-assistance technology. Other automakers like Ford and GM already do this today with the pricing models for their respective driver aids. It unlocks recurring revenue streams—which investors love to see—and may make it easier to snag new users than a hefty one-time fee. 

I should point out that 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), and new car buyers may churn through vehicles much more quickly than that. 

Paying monthly may be a smart financial decision, even if it is annoying to realize that you’re paying monthly for Netflix and Spotify, plus internet connectivity and Full Self-Driving in the same car. A subscription may also be the more future-proofed choice. 

The feature doesn’t transfer to a buyer’s next Tesla outside of rare promotions from the company. And over the years many buyers have shelled out a huge sum expecting that FSD would become fully autonomous while they owned the vehicle. It never did. FSD is still an eyes-on feature that requires full attention.

Photo by: Mack Hogan/InsideEVs

Tesla hasn’t cited a reason for the 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 branding of partially-automated driving features. Moving to a subscription-only model could give Tesla an opportunity to rebrand FSD ahead of further probing by regulators and also save face by not taking a direct blame on product capability.

One might also wonder what’s going to happen for Hardware 3 vehicles. Musk stated during a company earnings call that HW3-equipped cars were not going to be capable of full autonomy as the company originally sold them. Instead, the automaker stated that it plans to offer a retrofit for HW3-equipped cars if the owner purchased FSD.

Where the water gets muddy is for owners who purchased a HW3-equipped Tesla after FSD became available as a subscription. Musk & Co. sold the promise of passive income and a robotaxi future using Tesla’s FSD service. Some buyers may have bought a car for that reason, but were not yet ready to purchase the software package—which cost as much as $15,000 in 2022—outright. Now that Tesla plans to go subscription-only, the fate of those HW3 buyers becomes a bigger unknown than ever before.

All of this said, Full Self-Driving still can’t drive itself. That alone seems like an argument for a subscription from the consumer’s perspective. Owners can try it out for a month or two and decide if it’s worth paying for based on the current capabilities. And when Tesla improves on the features, owners can give it a try again to see if it warrants their hard-earned cash.

It also opens up Tesla to playing the long game of pushing future secondhand buyers into the subscription model. And it allows the company to raise prices over time more easily. A smart decision? Sure—in a lot of ways, this feels like a win on the business side for Tesla. 

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