How Is Tesla Moving To A SaaS Model?

Tesla has confirmed that it will stop selling Full Self Driving as a one off purchase. Elon Musk wrote on X that the company will end sales of the $8,000 option after 14 February. After that date, drivers will only be able to access the system through a monthly subscription.

Business Insider reported that the announcement was framed as a Valentine’s themed message to Tesla owners. The post did not give a detailed explanation for the change, but it made clear that subscriptions will become the only route to Full Self Driving.

Full Self Driving, also called FSD Supervised, which is above Tesla’s basic Autopilot tools. Tesla says it helps with steering, braking and acceleration while tracking nearby vehicles and pedestrians. The company says drivers must stay alert at all times and be ready to take over immediately.

Tesla also says the software does not make the vehicle autonomous. The system works alongside emergency braking, collision alerts and blind spot monitoring. Features differ by country and can change through software updates.

 

How Does The Subscription Work For Drivers?

 

Tesla says drivers can subscribe through the Tesla app or through the car’s touchscreen. Only the account holder who owns the vehicle can buy the subscription. A software update is required before the features become active.

Eligibility depends on hardware. Tesla says cars must have Full Self Driving computer 3.0 or newer installed, along with Basic Autopilot or Enhanced Autopilot. Owners can check this through the vehicle screen or in the app under vehicle information.

The price is $99 per month, according to Tesla. This applies to cars moving up from either Basic Autopilot or Enhanced Autopilot. Enhanced Autopilot is sold only in selected markets.

Drivers can cancel at any time using the app. Tesla says refunds are not available and monthly payments are not split. Access continues until the end of the billing period. Hardware upgrades are not covered and must be booked separately through Tesla service.

 

Why Is Tesla Pushing Subscriptions So Hard?

 

Business Insider reported that Tesla has struggled to get drivers to pay for Full Self Driving. During the company’s third quarter earnings call in October, Tesla’s chief financial officer told investors that about 12% of the current fleet subscribed to the service. He also said quarterly revenue from the software went down compared with the same period the year before.

Elon Musk has long described Full Self Driving as central to Tesla’s future income. Business Insider said subscriptions link directly to Musk’s pay deal, which shareholders approved in November. One target requires 10 million active Full Self Driving subscriptions before Musk can unlock the full $1 trillion package.

The system has drawn close attention from regulators. The National Highway Traffic Safety Administration announced investigations last year into crash reporting linked to Full Self Driving. The agency is also examining reports of cars driving through red lights and travelling on the wrong side of the road, according to Business Insider.

Legal action has added pressure around the software. Business Insider reported that a judge in California ruled Tesla misled customers through the marketing of Autopilot and Full Self Driving. The decision leaves open the chance that Tesla could face limits on selling vehicles in the state.

The National Highway Traffic Safety Administration announced investigations last year into how Tesla reported crashes linked to Full Self Driving. The agency is reviewing reports that vehicles using the system drove through red lights and travelled on the wrong side of the road, according to Business Insider.

Tesla says Full Self Driving needs constant human supervision and does not make the car autonomous. The company says drivers must keep their hands on the wheel and be ready to take control at any time. Features depend on location and can change through software updates and is available in the Americas, Australia and New Zealand for now…