Tesla reported a decline in revenue from its Full Self-Driving software in the third quarter compared to the previous year. The company's CFO noted that only about 12% of Tesla owners are paying for the service. Despite challenges, CEO Elon Musk remains optimistic about its transformative potential.
During Tesla's third-quarter earnings call on Wednesday, CFO Vaibhav Taneja revealed that revenue from Full Self-Driving (FSD) decreased from $326 million in the same period last year. He attributed the drop to lower one-time revenue recognition after releasing features like Actually Smart Summon and a Cybertruck-specific version in the prior year. Overall, Tesla achieved record revenue of $28.1 billion for the quarter.
Taneja stated, "Total paid FSD customer base is still small, around 12% of our current fleet," highlighting limited adoption despite progress in boosting subscriptions. FSD, marketed as a driver assistance system requiring owner supervision, is priced at $8,000 outright or $99 monthly.
The company recently introduced version 14 of the software, including a "Mad Max" mode for higher speeds and more frequent lane changes. However, regulatory barriers limit availability in key markets like Europe and China, with Tesla planning launches pending approval.
In the US, FSD faces scrutiny: the auto regulator initiated a federal investigation this month over incidents of vehicles running red lights and steering into traffic. Tesla also contends with lawsuits, including an August ruling requiring $242.5 million in damages for a 2019 fatal crash involving Autopilot, though the company has challenged the verdict.
Musk emphasized FSD's importance, saying it would boost vehicle sales and position Tesla as the world's most valuable company. One milestone in his proposed $1 trillion pay package, up for shareholder vote next month, is achieving 10 million FSD subscriptions by 2035. He added, "I think people just don't quite appreciate the degree to which this will take off. Honestly, it's going to be like a shock wave."
These developments underscore Tesla's reliance on autonomy for future growth amid current hurdles.