Tesla Stock Jumps on Plan to Allow FSD Subscription Gifting
The move opens a new high-margin revenue channel for its Full Self-Driving software ahead of the holiday season, even as the technology faces scrutiny.
Tesla Inc. (TSLA) shares climbed more than 2.5% in Tuesday trading after the company revealed plans to allow customers to gift its Full Self-Driving (FSD) subscriptions, a strategic move to bolster high-margin software revenue ahead of the holiday shopping season.
Shares of the electric vehicle maker rose to $468.37 after a senior executive confirmed the upcoming feature, which creates a novel sales channel for its most advanced driver-assistance software. The initiative, expected to launch in the U.S. before Thanksgiving, is designed to accelerate the adoption of FSD and build a more robust stream of recurring revenue—a long-held goal for the company and a key focus for investors.
The new gifting option represents a fresh attempt to monetize Tesla's vast fleet of vehicles and deepen its software ecosystem. The FSD package, which offers features like Autosteer on city streets and traffic light recognition, is a critical component of Tesla's valuation and its vision for an autonomous future. By turning the subscription into a giftable product, Tesla is tapping into its loyal customer base to expand the software's reach.
This strategic push comes at a complex moment for the automaker. While Tesla reported record vehicle deliveries in the third quarter of 2025, it is facing stiffer competition and signs of market saturation in some regions. Recent data from October showed a significant plunge in Tesla sales in key European markets, including a 50% drop in Norway and an 89% decline in Sweden, according to reports. Sales have also slumped in Australia. In contrast, the company has maintained a dominant 43.1% EV market share in the United States as of October.
The FSD software itself is not without its challenges. The latest version, FSD V14, has drawn criticism from some users for erratic behavior. Reports have surfaced of "phantom braking" and other issues, with the system's performance still falling short of the reliability needed for fully unsupervised driving, as detailed by Electrek.
Despite these headwinds and technical critiques, Wall Street analysts have remained largely constructive on the stock's long-term potential, focusing on Tesla's AI and software ambitions. In late October, analysts at B of A Securities raised their price target on Tesla to $471, while Cantor Fitzgerald set an even more bullish target of $510, citing the company's innovative capabilities. This optimism underscores a belief that the value of Tesla's data and software will eventually outweigh manufacturing-related challenges.
The FSD gifting program can be seen as a direct effort to accelerate that transition, leveraging the holiday season to drive both revenue and user engagement. As Tesla continues to navigate a competitive global EV landscape, its ability to successfully market and scale its software offerings will be a critical factor for investors monitoring its path to future growth.