Tesla Discloses 1.1 Million Active FSD Subscribers as It Pivots to Subscription-Only Model

Tesla Inc. (NASDAQ: TSLA) has, for the first time, pulled back the curtain on the scale of its premium driver-assistance software adoption. During Wednesday's fourth-quarter earnings call, Chief Financial Officer Vaibhav Taneja disclosed that the company now counts approximately 1.1 million active paid subscribers for its Full Self-Driving (FSD) capability globally.

Taneja noted that over 70% of these customers opted for an upfront purchase, historically priced at $8,000, with the remainder on a $99 monthly plan. He cautioned that the company's impending transition to a subscription-only model, effective next month, "will impact automotive margins" in the near term. The one-time purchase option will be discontinued after February 14.

This strategic pivot is viewed by analysts as a critical step toward a longer-term objective outlined in CEO Elon Musk's compensation package: amassing 10 million active FSD subscriptions. By lowering the entry barrier to a monthly fee, Tesla aims to dramatically expand its software user base, creating a more predictable recurring revenue stream alongside vehicle sales.

The subscription news was accompanied by other significant announcements. Tesla clarified its free FSD transfer policy, which will end on March 31, 2025, with a new eligibility window for vehicle purchases between April 2025 and March 2026. Musk also indicated that the subscription price is expected to rise as the FSD technology matures.

In a separate strategic shift, Musk announced the company would "bring the Model S and X programs to an end with an honorable discharge" this year, ceasing production of these legacy flagship models to focus resources on higher-volume vehicles and new platforms.

Further underscoring its focus on artificial intelligence, Tesla confirmed a planned $2 billion investment into Musk's separate AI venture, xAI. The deal is anticipated to close in the first quarter of 2026, pending regulatory approvals.

User Perspectives:

• David Chen, Tech Portfolio Manager: "The 1.1 million subscriber base is a solid foundation, but the real test is the conversion rate to the subscription model. If they can maintain even half of that base on recurring revenue, it validates the software-as-a-service thesis for automotive."
• Sarah Miller, Long-term Tesla Investor: "Phasing out the Model S/X is bittersweet but rational. It streamlines manufacturing complexity. The xAI investment is the more intriguing bet—it's about securing a foundational AI tech lead beyond just cars."
• Marcus Johnson, Automotive Safety Advocate: "This feels like a monetization sprint over a safety marathon. They're racing to lock in millions of subscribers for a system still labeled 'beta' and requiring constant driver supervision. Where's the regulatory transparency on actual safety performance data?"
• Priya Sharma, Mobility Analyst: "The updated FSD transfer rules are a smart customer retention tool for the upgrade cycle. It softens the blow of moving to subscription-only and keeps owners within the Tesla ecosystem for their next purchase."