Tesla’s 1.74M FSD Figure Uses Pay-Package Accounting, Not Standard Metrics

Tesla reported 1.74 million active “Full Self-Driving” subscriptions in its Q3 2026 shareholder letter, a 67% increase year-over-year. However, a footnote in the document reveals that this figure is calculated according to the specific criteria outlined in the company’s 2025 CEO Performance Award. Consequently, the metric includes both upfront payments and monthly subscriptions, meaning customers who purchased the software outright years ago are counted as active subscribers alongside those paying monthly fees.

This accounting method is significant because reaching 10 million active FSD subscriptions is one of the specific milestones Elon Musk must hit to earn his 2025 compensation package. Additionally, hundreds of thousands of these users were sold unsupervised self-driving capabilities that Tesla has yet to deliver. While Tesla ended one-time purchases of FSD on February 14, 2026, to shift to a $99 monthly subscription model, all prior purchasers remain included in this total as long as their vehicles are active, with the sole exclusion being free trials.

The same methodology appears elsewhere in the shareholder letter regarding Tesla’s cumulative deliveries, which stand at 10.2 million. This figure also counts any unsupervised Robotaxis placed into commercial operation to align with the compensation package, which includes a 20 million vehicle milestone. Tesla has not disclosed how many of the 1.74 million active FSD subscriptions actually involve monthly recurring payments, despite having flagged this definition issue in April when the figure was 1.28 million.

Tesla also claims that over 75% of new deliveries in North America included FSD subscriptions in Q3, representing a nearly twenty percentage point sequential increase. The company attributes this to FSD driving demand in markets where it is available. However, the letter does not define whether this attach rate includes subscriptions started with introductory offers or clarify if the active-subscription metric excludes free trials in this specific context.

The 2025 CEO Performance Award consists of 12 tranches, each requiring a market cap milestone and one operational milestone. Operational targets include 20 million vehicles delivered, 10 million active FSD subscriptions, 1 million Optimus robots, 1 million robotaxis in commercial operation, and adjusted EBITDA targets. As of June 30, Tesla considered only one of these operational milestones probable: reaching 20 million deliveries.

Tesla added 260,000 net FSD subscriptions in Q3, its strongest quarter to date. At this pace, it would take approximately eight years to reach the 10 million subscription target. If the company maintains its current growth rate of about 700,000 subscriptions annually, it would take closer to 12 years. The compensation award remains active until 2035.

Critics note that while counting users who purchased FSD outright is not inherently incorrect, labeling them as “subscriptions” and presenting the total as evidence of momentum is problematic when the definition was created specifically for the compensation package rather than for investor analysis. The board established this definition, and Musk’s compensation is tied to it, yet the company has not revealed how many users are paying the $99 monthly fee.