I personally subscribe to “Full Self-Driving (Supervised)” for $100/month, and my car does more than 97% of my driving for me. But, the more I learn about Tesla, autonomous driving, and the industry, I think Tesla’s most brilliant move right now would be to make FSD free for every Tesla driver with a compatible vehicle.

Before we talk about FSD, let’s talk about Tesla’s competition

The era of EV = Tesla is over. While Tesla does make absolutely fantastic products, other companies make competitive EVs too, and the sales numbers reflect that. While Tesla still dominates the EV industry in the US, other companies are eating up a decent slice of that pie.

The mainstream mid-size SUV segment is the highest volume vehicle category in the US, and while performance cars and full-size SUVs matter, these are the vehicles most likely to win the hearts of average Americans. Let’s check out some of the most popular electric options in this segment.

	MSRP (excluding fees, no options selected)	EPA Range	Performance 0-60	Front Seat Legroom	Cargo Space (behind rear seats)
2026 Tesla Model Y Premium RWD	$44,990	357 miles	5.4 seconds	41.8 inches	30.2 cu ft
2026 Chevrolet Equinox EV RS FWD	$44,095	319 miles	7.7 seconds	41.7 inches	26.4 cu ft
2026 Ford Mustang Mach-E Premium Extended Range RWD	$46,245	320 miles	6.0 seconds	43.3 inches	29.7 cu ft
2026 Hyundai Ioniq 5 SEL RWD	$41.995	318 miles	7.4 seconds	41.7 inches	27.2 cu ft

As you can see, just looking at the numbers, while the Tesla does have slightly better range and quicker performance, all of these vehicles are fairly similar. Sure, the exterior design, interior features, and available options vary, but overall, all of them would be an enjoyable, practical, reliable way to get your family around, and ultimately, that’s what people buy these vehicles for.

Tesla does have some advantages that you can’t see from a spec sheet. First off, the purchase and service experience are amazing. It took me about 10 minutes to order my car on their website and then complete the financing in the app, and then a couple days later I picked it up from the factory. No wasting time at the dealership haggling about stupid add-ons like worthless ceramic coatings. Oh, and nobody else has as good of a mobile app as Tesla.

But, overall, there is a lot of competition in this space, and if you look around, you’ll see all these competing EVs. And every one of those EVs is one person who didn’t buy a Tesla. And that’s a problem, because while Tesla is awesome at scaling manufacturing, building a bunch of cars that nobody is buying is an issue.

How do car companies traditionally increase sales?

There are many ways car companies can increase sales, without actually changing anything about the car.

• Advertising – This one is super obvious. Ads on billboards, online banner ads, partnering with content creators, radio ads, and this is a big one – TV ads. Those do increase sales, but at a cost – a very high cost.
• Dealer incentives – Automakers can offer a variety of incentives to dealerships to move specific models or vehicles. Ultimately, incentivizing dealers means they can discount the car further, and everyone loves a discount.
• Rebates – Rebates are another type of incentive that is given in the form of a discount to the customer. This discount comes from the automaker, not the dealer.
• Financing incentives – Typically done their their captive finance companies (like GM Financial, Ford Credit, etc), they can buy down the rate. Whether it’s offering 0% APR to well qualified buyers to buying down the rate for buyers who might otherwise qualify but at a higher rate, these still cost the companies money. For example, on a $40,000, 60-month loan, they’re giving up almost $6,400 to give you that deal.

But there’s one thing that every item in that list has in common: it has a massive cost, and 3/4 of those cost the car company money every time they sell a car. Of course, the other way that a car company can increase sales is to make the car better. But while better is subjective, what if there was one feature that makes the customers life easier and safer, and that hardware is already on the car.

Autonomous driving: safe and convenient

The reason why self-driving cars are safer is obvious: a computer can see in every direction at once, a computer doesn’t get tired, a computer doesn’t get distracted, a computer doesn’t get angry, and a computer doesn’t get drunk.

Whether it’s your daily commute or an all-day road trip, even the current iteration of Tesla’s Full Self-Driving (Supervised) software enhances not just safety, but convenience. I’ve driven from the North San Francisco Bay Area to Los Angeles and back twice. The first time I did it in a regular car, and was absolutely exhausted afterward. When I did it in my Tesla with FSD, I felt like I could have done it six more times without issues.

I’m not advocating for anyone to drive when they can’t safely do so – for any reason. But if someone were to do such a thing, I’d rather they do it in a Tesla with FSD than without, even in its current state where it legally requires an attentive, competent driver.

And as the software gets better, the opportunities for your autonomous vehicle to not just save your life, but to improve it, grow. What if you have a busy schedule and simply need to catch up on sleep. Take a nap in the back seat. Getting on in years and your eyesight isn’t what it used to be, and you find driving at night or in rain difficult? No problem, just relax while the car handles it for you. Tight on funds? Let your car drive paying rideshare customers around for you while you’re spending time with your family or working at your day job for a few extra bucks.

But that’s what the future holds. What does today hold? Tesla marketshare going down, and the solution is simple – offer FSD for free.

Nobody else can offer this, especially for free

Tesla already spends a lot of time and money on developing their self-driving software, and every car they make leaves the factory with the hardware FSD needs to work. What this means is that while there may be some costs in terms of networking, storage, and compute to process all the driving data they collect, the cost to Tesla on a per-vehicle basis is minimal.

On the other hand, let’s look at two other companies, what they’re doing, and why they can’t compete with Tesla.

First, a competitor in terms of a car you can actually buy and put in their driveway: GM’s Super Cruise. This is a driver assistance feature that allows hands-free driving on certain pre-mapped highways. As long as there are no construction zones, and no, it won’t work around town. And did I mention you not only have to option your car with Super Cruise when you buy it (typically around $2,500), which includes 3 years of the service, but after that time is up, you have to pay a subscription fee (about $40/month).

Then there’s Waymo. You can hail a ride in one of their “robotaxis,” and honestly, it works well – I’ve been satisfied with every Waymo ride I’ve taken. The problem is, Waymo’s cost per car is insanely high. While we don’t have the exact data, it’s estimated that it costs Waymo $15,000 to $30,000 in parts and labor to make the base vehicle a robotaxi. Oh, and remember, that doesn’t include the car.

There are certainly regulatory hurdles in terms of making it legal to sleep, text, watch movies, or be wasted in your Tesla while it drives itself, but we’ll get there. And ultimately policy change comes from voters – and the more people ask for such changes, the quicker we’ll get it.

If Tesla makes FSD free, how much income will they lose?

As of this writing (December 23rd, 2025), Tesla includes FSD with all Model S and Model X vehicles, as well as the Cybertruck Cyberbeast. But, these are all low-volume vehicles. The mass-market vehicles that normal people can actually afford are the Model 3 and Model Y.

Based on Tesla’s Q3 2025 earnings call, only about 12% of Tesla’s global fleet consists of paid FSD customers (including both one-time purchases and subscriptions). We don’t have the data per model, but we can safely assume that while the take rate for FSD (before it was included) on S/X/CT is far higher than the take rate for FSD on the cheaper, mainstream vehicles like the 3/Y. And while I’m sure Tesla would love to sell more of those expensive vehicles, the potential for sales growth at that price point is minimal – most people who can afford a ~$100,000 car probably already have a Tesla, if they want one.

So, let’s say 15% of Model 3/Y drivers (whether owned or leased), pay for FSD. And Tesla moved a bit over 300,000 of those in the first three quarters of 2025. Extrapolating that to 400,000 cars in a year, if 15% of them pay $100/mo for FSD, that’s $6,000,000 a year that Tesla makes from FSD.

But while $6 million is a lot of money to me, in the grand scheme of things, that’s nothing for a company that large. In 2024, GM spent more than $3 BILLION just in advertising in the US. That’s INSANE. If we do the math based on how many vehicles GM sold in that same year, that’s $1,100 per vehicle in advertising expenses.

Tesla doesn’t typically do any traditional advertising, but if you divide the $6 million number we came up with by how many cars they sell in a year. That’s just $10 per vehicle. Now, I’m not an expert in manufacturing or supply chains, but I asked Grok to determine how much a hypothetical automaker would save due to the economies of scale, if they went from producing 400,000 cars per year to increasing that by 10%. A little over 3 minutes later, I was given a number of $1,091. Now, like I said, I can’t validate the accuracy of this number, but it sounds reasonable enough to me.

So, if including FSD for free on Tesla’s mainstream vehicles increased sales by 10%, Tesla would actually make an additional $1,081 per vehicle.

And if they really felt so inclined to increase subscription revenue by other means, there is plenty of opportunity for that. Premium Connectivity is currently $10/month – I don’t think anyone would be too upset if that became $15/month. Or, what if they added Starlink hardware to their vehicles, and offered a WiFi Hotspot feature for, let’s say $30/month? I’d subscribe to that for sure!

Safety over politics

So, all that said, is a 10% sales increase by including FSD in the Model 3 and Y realistic? I think so. While there are still plenty of people on the fence about EVs and self-driving cars, if you go on the social media platform of your choice, plenty of people who have current Teslas without FSD who are trying the latest version using the free trial Tesla rolled out, are describing it as “magical,” “awesome,” or “the future.”

And even my own mother, who is by no means a fan of the Tesla CEO’s political involvement over the last year or so, loves FSD from the few times she’s been a passenger in my car, and despite not having home charging, is considering purchasing a Tesla for that feature.

So ultimately, while some people may have a poor perception of the Tesla brand, electric cars in general, or even both of those things, the inclusion of an awesome safety and convenience feature might just matter more to people than the fuel type or brand image of the vehicle. Because a news headline of “Tesla makes Full Self-Driving free with all their vehicles, making them up to 10x safer” would be better marketing than any billboard or TV ad GM pays for.

And remember that brand loyalty is a thing, especially when they have an awesome experience with the car. According to the S&P Global Mobility 2024 Automotive Loyalty Awards (announced in February 2025, based on full 2024 calendar-year data), Tesla ranked #1 overall for “Loyalty to Make” (the highest brand-level retention when owners return to market and buy another from the same make). This was Tesla’s third consecutive year winning that category. If you can get a hesitant customer into a Tesla, they’ll probably love it and when it’s time for their next car, choosing another Tesla is a no-brainer.

A note on HW3

If you paid up front for FSD on an older Tesla running HW3, you’re probably upset that your car can’t accept the latest FSD updates, and will likely never actually be able to completely drive itself, like you were promised when you gave up $8,000 more under that promise. But while I understand this is frustrating, we need to look at modern cars, especially EVs, more like smartphones, and less like a traditional car.

This is something I’ve mentioned before – you should buy a product for what it can do today, not what it might do for in the future. Even my AI4 (aka HW4) Model 3 will be outdated eventually – AI5 (with 8x the compute power of AI4) will go into mass production in 2027 and AI6 is already on the roadmap.

But, it would be very easy for Tesla to make HW3 owners happy – simply give them an additional trade-in credit equal to their purchase price for a new or used Tesla with AI4 (that will be including FSD for free as we’ve discussed). This moves more new vehicles, while turning disgruntled customers into happy customers. And then just give up on future FSD updates for those older vehicles. They’ve said they’re working on a “v14 lite” which brings some of the v14 improvements to HW3 cars. I’ll be honest, that’s probably a waste of time. Just offer the base Autopilot features on those used cars and move on.

In the future, if FSD is a free, included feature, it’s simple to state that every vehicle has X years of software support after that particular version of the self-driving hardware is end of life. Maybe 2 years would be a reasonable amount? Remember that this is how other tech devices – smartphones, computers, smart home products, etc all work – you buy it with the knowledge that eventually, it’ll be outdated, and then you have to buy a new one if you want the latest features, and that’s perfectly acceptable.

In Conclusion

Tesla’s mission is “sustainable abundance” and nothing pushes that goal forward more than selling more safe, zero-emissions vehicles, and that’s why I think Full Self-Driving should be free.

If you’re at all curious about a new Tesla, feel free to use my referral link. Currently, depending on what Tesla product you’re interested in, you’ll either receive a discount or a few free months of FSD (since for now, it isn’t free).