On February 14, Tesla removed its basic Autopilot driver-assistance suite from new vehicle configurations in the U.S. and Canada, offering only Traffic Aware Cruise Control as standard. The move forces buyers toward the company’s Full Self-Driving (Supervised) package, which will no longer be available for a one-time payment of $8,000 and instead must be accessed via a $99 monthly subscription. CEO Elon Musk has signaled that this subscription fee will increase over time as software capabilities expand, underlining the company’s strategy to transition from hardware sales toward recurring-revenue software offerings.

Tesla’s decision follows a 60-day mandate from California’s Department of Motor Vehicles requiring the company to cease using the “Autopilot” name or face a 30-day suspension of its retail license. Regulators concluded that the branding misled consumers into overestimating the system’s autonomy. In compliance, Tesla removed Autosteer—its lane-centering and curvature navigation feature—from standard equipment lists, aligning marketing terminology and feature sets with regulators’ demands.

With only 12% of Tesla owners having previously opted into Full Self-Driving software, the shift to a subscription model aims to broaden adoption and establish a high-margin revenue stream. Tesla CFO Vaibhav Taneja noted in October that FSD uptake had lagged expectations, suggesting significant upside if subscription conversion rises. As FSD capabilities improve and regulatory approvals expand, recurring subscription income could materially bolster margins, positioning software sales as a critical profit driver beyond automotive hardware.