Tesla CFO Backs Estimate That FSD Is Near US$1B in Annual Revenue

Credit: Tesla

Tesla’s chief financial officer agreed with an estimate from New Street Research analyst Pierre Ferragu that Full Self-Driving now brings in close to US$1 billion a year in recurring revenue. Vaibhav Taneja made the comment on Tesla’s Q3 2026 earnings call on October 21, the same afternoon Tesla reported that FSD was included in over 75% of new North American deliveries.

Ferragu, who did his own math, said a new Tesla probably makes about US$7,000 in gross profit on the day it is sold, while FSD brings in more than US$1,000 a year. “I’m thinking it’s probably now approaching” US$1 billion “of ARR,” he said, using the short form for annual recurring revenue, and asked whether that was “the right order of magnitude.”

“Yeah, I think the numbers which you shared are correct,” Taneja replied. “As it scales further, we will start sharing more metrics around FSD, not just the revenue, but also other key metrics around it.” Tesla has not published its own FSD revenue figure.

When Ferragu followed up on how many subscribers stay on after a few months, Taneja said churn rates will be among the metrics Tesla shares later, and that it is holding off for now because of free trials and new countries being added. He also clarified the 75% figure. “This is every car which we’re delivering comes with a month of free FSD subscription,” he said. “Still, people are signing up even though they have that free available.”

Tesla’s customer count shows up in two places, and the numbers line up. In his opening remarks, Taneja said FSD reached “over 1.7 million paid customers globally, of which for the first time, 50% is based on subscriptions.” The Q3 Update lists 1.74 million “Active FSD Subscriptions,” up 67% from a year ago, but a footnote says that metric “includes both upfront payment and monthly subscriptions and excludes free trials.” That means the 1.74 million figure covers everyone paying for FSD, and about half of them pay monthly rather than buying it outright.

Taneja also said FSD is now what brings people into US stores. “Customers are now coming in and saying, ‘Can we get into an FSD drive?’ They’re not asking for 3/Y or Cybertruck. They’re saying, ‘Can we get an FSD drive?'” he said.

That echoes what Tesla said on its Q2 call in July, when Musk said many buyers are “buying Tesla full self-driving with a car attached,” and Taneja said about 55% of North American deliveries had an FSD subscription at delivery, with paid customers approaching 1.5 million, as we reported in our story on buyers wanting FSD first and the car second.

Are you paying for FSD monthly, or did you buy it outright?