Tesla's $99-a-Month FSD Plan Is on Pace to Generate $1.8 Billion a Year. Is This New Profit Lever a Signal to Buy the Elon Musk-Led Stock?

Published August 1, 2026 · Category: Finance

Overview

Tesla (NASDAQ: TSLA) is not having a good year. The company's shares took a major dip after it reported its second-quarter earnings on July 22, and they are down 28% to date. Tesla's results weren't terrible, but the company's capex is growing rapidly and squeezing profits and margins. Many investors fear that this spending won't yield the return Tesla expects. However, several aspects of the business are progressing steadily, including its supervised Full Self-Driving (FSD) subscriptions. Is that a good enough reason to buy the stock?

Image source: The Motley Fool.

Tesla ended the second quarter with 1.48 million active FSD subscriptions, up 56% from the year-ago period. At $99 per month, that works out to about $1.8 billion per year. That still represents a fairly small percentage of the company's annual revenue, which was about $94.8 billion last year. However, Tesla's FSD subscriptions generate significantly higher margins than its core electric vehicle (EV) business. So, this segment should represent a larger share of operating profits than it does revenue. Further, there are at least two reasons to be excited about the future of this business.

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Originally published at www.fool.com.

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