Tesla(US:TSLA) Invezz·2026-01-14 15:57Core Viewpoint - Tesla is transitioning to a subscription-only model for its Full Self-Driving (FSD) system, which will no longer be available as a standalone purchase after February 14, 2026, aiming to enhance recurring software revenue [1][4]. Group 1: Subscription Model Impact - The shift to a $99-per-month subscription model is intended to make FSD more accessible to mainstream buyers, reducing the psychological barrier compared to the previous $8,000 upfront cost [5][6]. - The new subscription model changes the financial dynamics for potential buyers, as it takes nearly 6.8 years to break even on the upfront cost if they remain subscribed [3][6]. - Currently, Tesla has about 3 million subscribers and aims to reach 10 million active subscriptions over the next decade, which is tied to Musk's compensation package [5][6]. Group 2: Financial Considerations - The subscription model may lead to a significant cash flow hit in the short term, as new buyers will contribute only $1,188 annually instead of the $8,000 upfront payment [6][7]. - It is estimated that it will take nearly seven years to recover the lost revenue from the upfront sales, raising concerns about customer retention [7]. Group 3: Regulatory and Market Risks - There are regulatory risks associated with the FSD system, as the National Highway Traffic Safety Administration is investigating 2.88 million Tesla vehicles for safety violations, which could impact subscription revenue [8]. - The perception of FSD as an "appreciating asset" may backfire, as subscription customers do not own the software and may cancel if the service does not improve significantly [8][9].