Tesla Shifts Strategy: Full Self-Driving Moves to Subscription-Only Model

Tesla has announced a fundamental change to how customers will access its advanced driver-assistance software. The company will cease direct sales of its Full Self-Driving (FSD) package as a one-time purchase, transitioning entirely to a monthly subscription service starting February 15, 2026. This strategic pivot aims to create a more predictable revenue stream from its software offerings. Despite this significant business model announcement and the revival of an internal supercomputer project, Tesla's stock declined by approximately 3.3% on Tuesday, closing at $429 per share.

The most consequential change involves the phasing out of the $8,000 upfront payment option for the FSD capability. After the mid-February 2026 deadline, access will be granted solely through a recurring monthly fee. This decision follows recent comments from Chief Financial Officer Vaibhav Taneja, who cited an adoption rate near 12% for the paid FSD features. The move is widely seen as an effort to stabilize and make software revenue more consistent.

Concurrently, Tesla will discontinue its license transfer program. Previously, vehicle owners could move their FSD license to a new Tesla upon trade-in. This option will be permanently terminated on March 31, 2026, placing a clear deadline for customers who wish to secure permanent access under the old model and accelerating the transition to the subscription framework.

Dojo Supercomputer Project Revived

In a related development, CEO Elon Musk confirmed the reactivation of the Dojo3 supercomputer initiative. After scaling back the team in 2025 to concentrate resources on a single chip design, Tesla is now resuming recruitment efforts. This restart was prompted by the successful completion of the AI5 chip design, which Musk described as being "in good shape."

Should investors sell immediately? Or is it worth buying Tesla?

The vision for Dojo3 is a space-based artificial intelligence computing system, marking a departure from the earthbound clusters that rely on Nvidia hardware. This direction is a key component of Tesla's broader strategy to lessen its dependence on external semiconductor suppliers. With Nvidia chips costing between $25,000 and $50,000 per unit, developing proprietary technology represents a substantial potential cost-saving measure.

Trade Winds: A Canadian Boost and U.S. Concerns

On the operational front, Tesla received positive news from Canada, which has reduced tariffs on Chinese electric vehicles under a quota system from 100% to 6.1%. For Tesla, which imported over 44,000 vehicles from its Shanghai Gigafactory to Canada in 2023, this translates to meaningfully improved margins for its Model 3 and Model Y vehicles sold there.

However, this tariff relief was overshadowed by broader geopolitical trade anxieties. Market sentiment was dampened on Tuesday by speculation regarding potential new U.S. tariffs on European countries and general concerns over escalating trade conflicts. The technology-heavy Nasdaq index fell 1.8%, and Tesla shares were caught in the sector-wide downturn.

Upcoming Earnings in the Spotlight

Investor attention now turns to the company's fourth-quarter financial results, scheduled for release on January 28, 2026. Market participants will closely scrutinize the initial impact of the FSD subscription shift on Tesla's cash flow. Progress on the Robotaxi fleet, which now stands at 200 vehicles with 158 operating in the San Francisco Bay Area, will also be under examination. The company's valuation remains ambitious, with a price-to-earnings ratio hovering around 198.