Tesla shifts FSD to $99 subscription as January deliveries fall 18% y/y, 59% m/m
January deliveries plunged 18% year-over-year and 59% month-over-month, leading Tigress to initiate coverage with a Buy rating and $550 target, while Wells Fargo stayed Underweight. Tesla will switch Full Self-Driving to a $99 monthly subscription Feb 15 and relies on AI services, Semi ramp and energy storage to boost margins.
1. Delivery declines spur mixed analyst ratings
In January, deliveries fell 18% year-over-year and 59% month-over-month across four tracked markets, with EU weakness and China domestic deliveries at their lowest since November 2022. Tigress initiated coverage with a Buy rating and $550 price target, while Wells Fargo maintained an Underweight stance.
2. Subscription-only Full Self-Driving rollout
Effective February 15 in the US, Canada, Mexico, Australia and New Zealand, Tesla replaced the $8,000 one-time Full Self-Driving purchase with a $99 monthly subscription. Existing buyers retain lifelong access under the prior model as the company seeks to boost recurring software revenue and lower upfront costs.
3. AI and autonomous services power long-term growth
Tesla is positioning its physical AI strategy—including Full Self-Driving, robotaxis and humanoid robots—as a multi-year growth engine, shifting toward high-margin software and mobility-as-a-service. Additional catalysts include a planned high-volume Semi production ramp in 2026 and expansion of its energy storage business.