Tesla reports 1.74 million FSD users by counting all upfront buyers

Tesla has disclosed that it now manages 1.74 million active Full Self-Driving subscriptions, a figure that represents a 67 percent increase over the previous year. The company detailed this metric in a footnote within its third quarter 2026 shareholder letter. The specific accounting method aligns with the 2025 CEO Performance Award. This agreement defines the subscription count to include both monthly recurring payments and upfront purchases.

Under this definition, owners who bought the software outright years ago are still classified as subscribers. This inclusion is significant because reaching 10 million active FSD subscriptions is a key milestone for Elon Musk. It is one of the operational targets he must meet to earn his 2025 pay package. The company stopped selling FSD as a one-time purchase on February 14, 2026. New customers in the US now pay a monthly fee of $99. However, those who paid upfront at prices up to $15,000 remain in the active count as long as their vehicles are operational. Only free trials are excluded from this total.

Tesla added 260,000 net FSD subscriptions during the third quarter. This marks the company's best performance in a single quarter to date. Despite this growth, Tesla has not disclosed how many of the 1.74 million users are currently paying the monthly fee. In April, the company reported 1.28 million active subscriptions using the same definition. Six months later, the breakdown between recurring and upfront payments remains unclear to investors.

The same accounting approach appears in other parts of the report. Tesla's cumulative deliveries figure stands at 10.2 million. This number includes any unsupervised Robotaxis placed into commercial operation. This inclusion matches the pay package, which sets a milestone of 20 million vehicles. The company also claimed that more than 75 percent of new North American deliveries in the third quarter included FSD subscriptions. This represents a nearly twenty percentage point sequential increase. Tesla stated that it believes FSD is driving demand in markets where the technology is available.

The 75 percent attach rate is a substantial figure, but the company did not define the metric in the letter. It did not specify whether the count includes subscriptions started with introductory offers. Nor did it clarify how many of those buyers continue to pay after a few months. While the active subscription metric excludes free trials, Tesla did not state the same for the attach rate. This lack of definition makes it difficult for analysts to gauge the true retention of the software service.

Musk's 2025 award consists of 12 tranches. Each tranche requires the company to hit a specific market cap milestone and an operational milestone. The operational list includes delivering 20 million vehicles and achieving 10 million active FSD subscriptions. It also includes producing 1 million Optimus robots and operating 1 million robotaxis. As of June 30, Tesla considered only the 20 million delivery milestone to be probable. The other targets remain uncertain.

If Tesla maintains its current pace of adding 260,000 subscriptions per quarter, it would take about eight years to reach the 10 million target. Based on the pace over the last 12 months, which averaged about 700,000 per year, it would take closer to 12 years. The compensation package runs until 2035. This timeline suggests that the FSD milestone is a long-term goal rather than an immediate achievement.

The definition of the metric has become a central focus for investors. The board wrote the definition, and Musk's compensation depends on it. The company knows the number of people paying $99 a month but has not shared it publicly. The 75 percent take rate is a strong claim if it holds up. A high adoption rate for a recurring revenue product would indicate a solid business model. However, the company has yet to provide retention data for North American buyers who started subscriptions in the second quarter.