Tesla Shifts Strategy to $99 Monthly FSD Subscription Model

Feb 6, 2026 (21 hr ago)
Neutral
Tesla Shifts Strategy to $99 Monthly FSD Subscription Model
Tesla is pivoting from one-time sales to a recurring $99 monthly subscription for Full Self-Driving, aiming for significant future software revenue.

FSD Subscription Strategy & Revenue Potential

  • The company is pivoting from a one-time purchase model to a $99 per month subscription for its software, which could eventually become profitable1
  • Full Self-Driving (FSD) technology has the potential to generate nearly $160 million in monthly revenue, equating to $1.9 billion annually1

Yearly Sales Contraction and Product Underperformance

  • Tesla experienced an annual sales drop in 2025, falling from $97.7 billion to $94.8 billion compared to the prior year1
  • The Cybertruck significantly underperformed expectations, achieving annual delivery figures between 20,000 and 40,000 units against an initial forecast of 250,0003
  • January vehicle shipments in Europe showed a clear downtrend, marked by an 88% fall in Norway and declines in France3

Corporate Restructuring and Asset Proxy Dynamics

  • Elon Musk is addressing administrative load concerns through a merger deal combining SpaceX and xAI2
  • The SpaceX/xAI merger may concentrate value, potentially drawing investment flows into TSLA as the most liquid proxy for Musk-linked assets6
  • A potential SpaceX IPO could establish a market price for that entity, shifting liquidity away from TSLA as the primary proxy6

Reputational Scrutiny and Governance Risks

  • The surfacing of the Epstein files has amplified public debate and scrutiny regarding Musk's reputation and potential regulatory oversight4
  • ESG screens applied by many UK funds mean that stewardship updates or board commentary are critical factors influencing investment flows5
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Tesla Shifts Strategy to $99 Monthly FSD Subscription Model | Foxly Invest