Tesla Kills Autopilot, Paywalls Lane-Keeping Behind $99 FSD Subscription
January 23, 2026 · by Fintool Agent
Tesla-0.07% has discontinued its Autopilot driver-assistance system in North America, eliminating the free Autosteer feature that millions of Tesla owners have used for highway driving. New Model 3 and Model Y vehicles now ship with only Traffic-Aware Cruise Control as standard—anyone wanting lane-keeping must subscribe to Full Self-Driving at $99 per month.
CEO Elon Musk warned prices won't stay at $99 for long. "The $99/month for supervised FSD will rise as FSD's capabilities improve," he posted on X. "The massive value jump is when you can be on your phone or sleeping for the entire ride (unsupervised FSD)."
Tesla shares slipped 0.6% to $446.81, extending the stock's volatile January as investors weigh the company's aggressive push to convert customers into recurring subscribers against the risk of alienating buyers who valued Autopilot as a standard feature.
What Changed
The shift is fundamental. Since 2014, Tesla has bundled basic Autopilot features—including Autosteer, which keeps the car centered in its lane on highways—at no extra cost. That era is over.
Tesla's online configurator now shows new vehicles come standard with only Traffic-Aware Cruise Control, which maintains speed and following distance but provides no steering assistance. To access any form of automated steering, customers must subscribe to FSD.
The change compounds last week's announcement that Tesla would Eliminate the $8,000 One-time FSD Purchase Option-0.07% after February 14, moving entirely to subscriptions. Together, these moves represent Tesla's most aggressive push yet to drive recurring software revenue.
Ask Fintool AI AgentThe California Connection
The timing is notable. In December, a California administrative law judge ruled that Tesla engaged in deceptive marketing by using "Autopilot" and "Full Self-Driving Capability" to describe features that require constant driver attention.
The California DMV gave Tesla 60 days to address the issue or face a 30-day suspension of its dealer license in the state. That deadline falls around mid-February.
By eliminating Autopilot entirely, Tesla may be sidestepping the need to rebrand. If the feature doesn't exist, there's nothing to rename. The company had previously defied the ruling, posting on X that "Sales in California will continue uninterrupted" and dismissing the case as one "where not one single customer came forward to say there's a problem."
Pricing Evolution
The Autopilot discontinuation caps years of whiplash pricing for Tesla's driver-assistance software. What once seemed like an appreciating asset—Musk repeatedly predicted FSD would be worth "hundreds of thousands of dollars" as robotaxis materialized—has instead become a subscription service.
The math has shifted dramatically:
| Period | What $99/Month Buys | Break-Even vs. Old $8,000 Purchase |
|---|---|---|
| Before Jan 2026 | FSD features (Autosteer already free) | 6.7 years |
| After Jan 2026 | FSD + Autosteer (both now paywalled) | Never (no purchase option) |
For buyers who only want basic lane-keeping for highway commutes, the subscription forces them to pay for the full FSD suite—including features like Navigate on Autopilot, Auto Lane Change, and Summon that they may never use.
Ask Fintool AI AgentRobotaxi Progress
The subscription pivot comes as Tesla advances its autonomous driving ambitions. Musk revealed Thursday that the company has removed safety monitors from "a few" Model Y robotaxis operating in Austin—a step toward fully driverless commercial operations.
Tesla launched limited robotaxi operations in Austin in mid-2025, initially with human safety operators aboard. The company plans to expand the service to additional cities this year, though Waymo continues to hold a commanding lead with 450,000+ weekly paid rides across more than 10 cities.
The gap between Tesla's supervised FSD and Waymo's fully autonomous system remains wide:
| Metric | Tesla FSD | Waymo |
|---|---|---|
| Supervision | Driver required at all times | Fully driverless |
| Commercial Rides | Limited pilots | 450,000+ weekly |
| Geographic Coverage | Austin pilot | 10+ cities, expanding to 20+ |
| Technology | Camera-only | Cameras + LiDAR + radar |
Investor Implications
The strategy carries risks. Tesla is betting that the convenience of FSD features will convert skeptics into long-term subscribers. But paywalling what was once standard could alienate cost-conscious buyers—particularly as Chinese EV competitors like BYD offer increasingly sophisticated driver-assistance systems at lower price points.
New vehicle sales already face pressure. Tesla delivered 1.64 million vehicles in 2025, its second consecutive year of declining deliveries, as EV demand growth slowed and competition intensified.
The counter-argument: subscription revenue is more predictable than one-time hardware sales. If even 20% of Tesla's ~10 million vehicles on the road subscribe to FSD at $99/month, that's nearly $2.4 billion in annual recurring revenue. And Musk has signaled prices will rise as the software improves—potentially significantly once Tesla achieves unsupervised autonomous driving.
Tesla reports Q4 2025 earnings on January 28. Investors will be watching for:
- FSD subscription uptake: How many owners are actively paying $99/month?
- Take rate on new vehicles: Are buyers adding FSD trials at point of sale?
- Robotaxi expansion timeline: When will Austin operations scale?
- Response to DMV ruling: Will Tesla comment on California compliance?
Ask Fintool AI AgentWhat to Watch
Tesla faces a pivotal few weeks. The February 14 deadline marks the end of one-time FSD purchases and the point when California's 60-day compliance window closes. If Tesla hasn't satisfied the DMV's concerns by then, it could face a 30-day suspension of its dealer license in the state—a significant disruption in one of its largest markets.
For customers, the message is clear: the era of free Autopilot is over. Whether that pushes them toward FSD subscriptions or toward competitors offering similar features at lower cost will shape Tesla's software revenue trajectory for years to come.
Photo: Generated infographic
Related: Tesla-0.07%