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Gary Black suggests that Tesla is likely to prioritize increasing the number of Full Self-Driving (FSD) subscriptions, targeting 10 million active FSD subscriptions as part of a strategy outlined in Elon Musk's 2025 compensation plan.
The focus appears to be on maximizing recurring revenue from subscriptions rather than direct sales, as these sales are not included in Musk's compensation incentives.
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Tesla’s renewed emphasis on recurring revenue from FSD subscriptions emerges amid intensifying competition in autonomous technology, a challenge previously examined in depth in the context of how Nvidia’s AI advancements are equipping rivals with a customizable edge in the race for autonomy. These strategic shifts follow a broader pattern seen in the markets, where optimism around artificial intelligence and anticipated Federal Reserve rate cuts have contributed to stock surges and shaped investor sentiment throughout the sector.