Tesla (TSLA) is navigating a period of strategic adjustments, particularly concerning its Full Self-Driving (FSD) technology, leading to revised price targets from analysts and market reactions reflecting investor uncertainty.
Tesla’s stock experienced a downturn in premarket trading following UBS’s price target adjustment and the announcement of a subscription-only model for its Full Self-Driving (FSD) feature. As of January 14, 2026, the stock price decreased by $2.77 to $444.43 in premarket trading, and is currently trading at $437.14, down $10.06 (-0.02%) from the previous close, with an intraday volume of 23,508,689.
UBS has raised its price target on Tesla to $307 from $247, yet maintains a ‘Sell’ rating on the shares. The firm cited caution heading into Tesla’s earnings report. GLJ Research analyst Gordon Johnson argues that Tesla’s move to a subscription-based model for FSD discredits the previous narrative of FSD as an appreciating asset. “That story now looks retired,” Johnson stated in a research note, referencing Elon Musk’s 2019 suggestion that the $8,000 FSD purchase would appreciate to over $100,000 once Tesla vehicles achieved robotaxi functionality. GLJ Research views the subscription model as an admission that FSD is not an asset, despite what it describes as “many on Wall Street assigning it hundreds of billions of dollars of value as if it were proprietary intellectual property with terminal economics.” As of February 14, 2026, FSD will be available exclusively as a $99 monthly subscription.
The shift to a subscription model introduces a recurring revenue stream for Tesla but simultaneously raises questions about the long-term value proposition of FSD. The market’s reaction suggests that analysts are re-evaluating Tesla’s valuation, particularly concerning the contribution of FSD.
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Tesla Analyst Summary
Bull Case
- Recurring revenue from FSD subscriptions could boost financials.
- Increased accessibility of FSD may drive adoption.
- UBS price target increase, despite ‘Sell’ rating, shows some optimism.
Bear Case
- FSD subscription model undermines asset appreciation thesis.
- UBS maintains a ‘Sell’ rating, expressing caution.
- Market reacted negatively to FSD announcement in premarket trading.
The market will be closely watching Tesla’s upcoming earnings report to assess the impact of the FSD strategy shift and other key performance indicators.
