Tesla to End FSD Purchase Option, Shifts to Subscription Model

- The now-retired purchase option had a volatile price history, peaking at $15,000 in 2022 before dropping to $8,000 in 2024 to encourage adoption. The new subscription is priced at $99 per month. - The Full Self-Driving (FSD) computer has undergone significant evolution. Early models used a Mobileye EyeQ3, followed by an NVIDIA Drive PX 2 in "Hardware 2." Since 2019, Tesla has used its own custom-designed "FSD Chip" in Hardware 3 (HW3) and the newer Hardware 4 (HW4). - There is a notable performance gap between the underlying hardware. Hardware 4 features higher-resolution cameras (5MP vs 1.2MP), more CPU cores (20 vs 12), and is estimated to be 3 to 8 times more powerful than Hardware 3. However, older vehicles with HW3 cannot be upgraded to HW4. - A major software architecture shift occurred with FSD (Supervised) version 12. It moved from over 300,000 lines of explicit C++ code in v11 to an "end-to-end neural network" approach that learns driving behavior by watching video from Tesla's fleet. - Full Self-Driving is the top tier of three. Standard Autopilot (lane centering and adaptive cruise control) is included on all cars. Enhanced Autopilot is a middle tier that adds features like Navigate on Autopilot for highway interchanges and automatic lane changes. - The latest software, FSD v13.2.1, is rolling out exclusively for vehicles with Hardware 4, taking full advantage of the higher-resolution cameras. Vehicles with the older Hardware 3 are expected to receive a separate v12.6 update. - This strategy shift aligns with a broader industry push toward high-margin, recurring revenue from software and services, making the company less dependent on the fluctuating economics of vehicle manufacturing.