Why Musk is raising Tesla's FSD subscription after ditching Autopilot
What's the story
Elon Musk, the CEO of electric vehicle giant Tesla, has announced plans to raise the subscription prices for its Full Self-Driving (FSD) software. The increase will be linked to improvements in FSD capabilities and could exceed the current rate of $99 per month. The announcement was made by Musk on X, where he said, "I should also mention that the $99/month for supervised FSD will rise as FSD's capabilities improve."
Feature removal
Tesla phases out Autopilot feature in North America
The announcement comes as Tesla removes its basic driver-assistance system, Autopilot, from vehicles sold in the US and Canada. The feature was previously standard on all Tesla cars but has now been replaced by Traffic-Aware Cruise Control as the only standard offering. This change leaves customers with FSD as their main driver assistance option.
Subscription strategy
Shift toward subscription-based FSD
The removal of Autopilot is part of Tesla's larger strategy to promote subscriptions for FSD. Musk has previously called this move a crucial part of the company's future. After February 14, 2026, Tesla will also remove the one-time $8,000 fee for FSD, leaving customers with monthly subscriptions as their only option for self-driving capabilities.
Adoption rates
FSD adoption and Musk's pay package
Despite its potential, FSD technology has seen slow adoption. Tesla's CFO revealed in October that only about 12% of Tesla owners are paying for the assisted-driving feature. This slow uptake is also a key part of Musk's massive Tesla pay package. One of the major milestones he needs to hit for the full $1 trillion payout is reaching 10 million active FSD subscriptions.
Feature expansion
Capabilities and Tesla's future plans
FSD can handle most driving situations, including lane changes, navigation routes, turns, avoiding vehicles and objects, and even parking itself or coming to the driver in a parking lot. However, it still needs active driver supervision. In a major upgrade on Thursday, Tesla announced that it had started providing fully autonomous robotaxi rides without a safety monitor in Austin. Musk expects this "unsupervised" FSD will greatly increase demand for Tesla's vehicles.