Tesla Unveils 1.1 Million FSD Subscribers in Earnings Bombshell

Tesla Inc. revealed for the first time that it has 1.1 million active Full Self-Driving (FSD) subscribers as of the end of 2025, a figure that underscores the electric-vehicle maker’s pivot toward recurring software revenue amid slumping car sales. The disclosure came during the company’s Q4 2025 earnings release on January 28, 2026, showing year-over-year growth of 38% from 800,000 subscribers in 2024. This marks a sequential ramp-up, with subscriptions climbing from 800,000 in Q1 2025 to 1.1 million by year-end, as detailed in Tesla’s shareholder deck.

The numbers reflect a blend of monthly payers and those who bought FSD outright, though Tesla is sunsetting one-time purchases after February 14 in favor of a $99 monthly subscription model. Chief Executive Elon Musk has warned that this fee “will rise as FSD’s capabilities improve,” tying pricing to advancements like unsupervised operation, where drivers could sleep during rides. At current levels, 1.1 million subscribers generate roughly $109 million monthly, or over $1.3 billion annually, assuming full $99 uptake—a high-margin stream critical as automotive deliveries fell 16% year-over-year to 418,227 vehicles in Q4.

FSD’s Subscriber Surge Signals AI Shift

Tesla’s Q4 revenue hit $24.901 billion, with GAAP earnings per share at $0.24, but net income plunged 61% to $840 million due to rising AI R&D costs. Energy storage deployments reached a record 14.2 GWh, offsetting auto-margin pressure, yet investors fixated on FSD metrics. Previously opaque, the subscriber count now joins miles driven—billions quarterly on version 12 and beyond—as key indicators of Tesla’s transition to a “physical AI company,” per its earnings letter.

Historical data shows steady gains: 400,000 in 2021, 500,000 in 2022, 600,000 in 2023, and 800,000 in 2024. Electrek noted monthly subscriptions more than doubled in 2025, representing about 12% of Tesla’s roughly 8.9 million vehicles sold lifetime. This low penetration leaves vast upside, especially as Tesla ends $8,000 upfront sales, pushing new buyers to subscribe and potentially boosting conversions from recent 1.5 million HW4 vehicle trials.

Wall Street reacted swiftly, with shares volatile post-earnings. Analysts like those at Piper Sandler see unsupervised FSD “very close,” citing over 9,200 miles between critical disengagements in v14.1.x. MarketWatch highlighted the 1.1 million figure as just purchasers, a sliver of the fleet, fueling debates on adoption hurdles like regulatory probes and safety scrutiny from the National Highway Traffic Safety Administration.

Subscription Pivot Reshapes Revenue Model

Musk’s strategy aligns with his $1 trillion compensation package, which includes hitting 10 million active FSD subscriptions by late 2035—nine times current levels. Posts on X from analysts like Sawyer Merritt amplified the reveal, sparking buzz: “Tesla has revealed how many people are subscribed or have purchased FSD (Supervised). Active FSD Subscriptions: 2025: 1.1 million.” This shift to SaaS-like recurring fees reduces liability versus perpetual licenses, where buyers sued over unfulfilled “self-driving” promises.

Prior quarters saw FSD revenue dip, with Q3 2025 under $326 million from 2024 levels, as CFO Vaibhav Taneja admitted only a “fraction” pay despite “decent progress.” Tesla’s move kills basic Autopilot as standard on new U.S. models, funneling users to $99 FSD. MotorTrend reported Musk’s confirmation: prices rise with capabilities, eyeing unsupervised leaps for a “massive value jump.”

Challenges persist: NHTSA probes 2.88 million FSD-equipped vehicles after crashes, and Europe lags without approvals. Yet, Robotaxi pilots in Austin—now driverless testing—build data for personal unsupervised FSD. Morgan Stanley flags 2026 as an “inflection point,” forecasting 1,000 Robotaxis by year-end, slower than Musk’s 1,500 for 2025 but paving for 70% FSD penetration by 2035 across 35 million vehicles.

Path to Unsupervised Autonomy Accelerates

Tesla amassed billions of FSD miles in 2025, with Q4 surging on v12+, per its update letter. Musk ties unsupervised rollout to 10 billion total miles, calling data the bottleneck. X users like Christiaan Hetzner noted quarterly adds of ~100,000 subs, projecting rapid scaling. Investors eye Q1 metrics: subscription take rates, churn, daily usage—hallmarks of mature SaaS.

Energy’s 44% revenue growth to $3.415 billion in Q3 previews diversification, but FSD remains the “crown jewel,” per Morgan Stanley’s Andrew Percoco. With Dojo supercomputer ramping and $16.5 billion in AI5 chips from Samsung/TSMC, Tesla readies for Gen 3 FSD in early 2026. Critics decry timelines—Musk promised unsupervised by 2025 end—but 38% sub growth validates momentum.

Used-market dynamics shift: Pre-February 14 cars with lifetime FSD gain premium as “grandfathered” assets. Owners on X lament subscriptions amid everything-as-service fatigue, yet trials convert: 40-day HW4 pushes ended January 2026. Tesla’s bet: lower barriers spur 10x subs, fueling AI training for Robotaxi dominance over Waymo’s 450,000 weekly rides.

Investor Scrutiny Turns to Recurring Metrics

Q4 capex swelled on AI, with $2 billion xAI investment signaling Musk’s ecosystem play. Optimus pilots at Fremont target 1 million units yearly by 2027, but FSD anchors near-term valuation. Teslarati quoted Musk: 10 billion miles needed for unsupervised safety. As deliveries dipped—full-year 1.636 million, trailing BYD’s 2.26 million—FSD’s 1.1 million cohort proves Tesla’s auto-to-AI metamorphosis.

Analysts like IG’s preview demand FSD churn data; TradingKey calls for average spend per user. X sentiment surges: “1.1 million active FSD subscribers… rapidly going up!” from TheSonOfWalkley. With Europe/China approvals pending, 2026 tests unsupervised viability. Tesla’s disclosure elevates FSD from black box to boardroom staple, redefining its $1 trillion-plus market cap narrative.