Tesla (TSLA) Shifts Full Self-Driving to Subscription Model Post-Feb 14

Written by Emily J. Thompson, Senior Investment Analyst

TSLA-0.39%

Source: seekingalpha

Updated: 1h ago

0mins

Source: seekingalpha

Sales Model Shift: Tesla CEO Elon Musk announced that starting February 14, Full Self-Driving (FSD) will no longer be sold outright but will transition to a monthly subscription model, which could impact consumer purchasing decisions and subsequently affect company revenue.
Market Reaction Anticipation: This move may expose Tesla to short-term sales decline risks, particularly as consumer acceptance of high-priced subscription services remains uncertain, potentially intensifying pressure in the competitive electric vehicle market.
Increased Legal Challenges: Concurrently, Tesla faces legal action from Malaysia regarding its AI deepfake image technology, which could negatively impact the company's brand image and market trust, further affecting sales.
Overall Performance Outlook: With Tesla's delivery numbers expected to decline in 2026, the subscription model for FSD may not compensate for lost sales, leading to greater uncertainty in the company's future financial performance.

TSLA

$447.2+Infinity%1D

Analyst Views on TSLA

Wall Street analysts forecast TSLA stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSLA is 384.14 USD with a low forecast of 19.05 USD and a high forecast of 600.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

34 Analyst Rating

14 Buy

10 Hold

10 Sell

Hold

Current: 448.960

Low

19.05

Averages

384.14

High

600.00

Current: 448.960

Low

19.05

Averages

384.14

High

600.00

GLJ Research

Gordon Johnson

Sell

maintain

2026-01-07

Reason

GLJ Research

Gordon Johnson

Price Target

2026-01-07

maintain

Sell

Reason

GLJ Research analyst Gordon Johnson raised the firm's price target on Tesla to $25.28 from $19.05 and keeps a Sell rating on the shares as the firm is adjusting Q4 estimates for "reality rather than narrative." With 418,000 in Q4 deliveries, a Q4 mix-shift toward heavily discounted Model Ys outside of China and Q4 being the first quarter in which U.S. automakers are no longer federally mandated to buy ZEV credits from Telsa, the "earnings math deteriorates quickly," says the analyst, who expects the company's decline in global deliveries to accelerate to 15.0% year-over-year in 2026.

Truist

William Stein

Hold

downgrade

$444 -> $439

2026-01-02

Reason

Truist

William Stein

Price Target

$444 -> $439

2026-01-02

downgrade

Hold

Reason

Truist analyst William Stein lowered the firm's price target on Tesla to $439 from $444 and keeps a Hold rating on the shares after the company announced it delivered 418k units in Q4 2025, below consensus and the firm's estimate. Truist interprets the stock's bounce as "better than feared." Energy storage deployments beat consensus. The firm asserts investors should be more focused on AI projects, especially FSD. Truist views AI developments as far more important than auto deliveries for Tesla's long-term cash generation and stock performance.

Morgan Stanley

Andrew Percoco

Equal Weight

maintain

$425

2026-01-02

Reason

Morgan Stanley

Andrew Percoco

Price Target

$425

2026-01-02

maintain

Equal Weight

Reason

Morgan Stanley analyst Andrew Percoco notes that Tesla delivered 418,000 vehicles in Q4 2025, a slight 1% miss versus sell-side consensus but ahead of the firm's 402,000 estimate and buy-side expectations of roughly 400,000-410,000. Morgan Stanley maintains its 1.597M vehicles unit sales and 64 GWh ESS deployment estimate in 2026. The catalyst path for Tesla remains concentrated around its robotaxi business in the first half of 2026, although advancements in personal FSD - in many ways tied to a successful robotaxi roll-out - remain important drivers of future vehicle demand to support the firm's double-digit volume growth expectations in 2027 and beyond. Morgan Stanley has an Equal Weight rating on the stock with a price target of $425.

Baird

Outperform

maintain

$548

2025-12-30

Reason

Baird

Price Target

$548

2025-12-30

maintain

Outperform

Reason

Baird says Tesla shares are up 7% in the last month as attention turns to the company's potential catalysts in 2026. These include a broader robotaxi rollout, new product launches, and incremental details on Optimus commercialization, as well as non-Tesla items such as a SpaceX initial public offering, the analyst tells investors in a research note. Baird recommends owning the stock into the new year and continues to view the company as a core holding. It keeps an Outperform rating on Tesla with a $548 price target.

About TSLA

Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.