Here’s why Elon Musk halted Tesla FSD sales

Tesla now offers its full self-driving (FSD) features only through a subscription plan.

Elon Musk, the chief executive, revealed that purchasing FSD upfront is ending next month, beginning February 14.

On social media, fans of Musk and skeptics engaged in debates about the rationale for this transition. 

As is often the case, the discussion lacked substance. Supporters saw it as another instance of the Tesla CEO's intelligence. Meanwhile, critics argued it was a sign of FSD's underperformance and potential demise.

However, the truth is likely more nuanced. According to Business Insider, Tesla’s actions are driven by what they evaluate. 

The recently approved pay package for Musk, agreed upon by shareholders last year, contains rigorous targets to be met before he can achieve the $1 trillion mark.

Tesla's shareholder report lists four product goals. The second goal specifies: "10 Million Active FSD Subscriptions."

An efficient route for Tesla to accomplish this is by eliminating the purchase option for FSD. Therefore, starting mid-February, potential customers will be directed towards the subscription.

Why did Tesla's board consider this important for Musk? Subscription services generate a more predictable revenue flow. 

Investors typically prefer steady revenue from subscriptions over unpredictable income from large, one-off sales. 

With an exclusive subscription model for FSD, Tesla gains the flexibility to adjust prices more readily in the future.