Tesla stock (NASDAQ: TSLA) surged on Thursday in a swift reversal after two major catalysts reignited investor optimism around Elon Musk’s ecosystem.
The EV maker’s stock climbed nearly 1.5% intraday, following Tesla’s announcement that it will discontinue one-time Full Self-Driving (FSD) purchases effective February 14 and shift entirely to a subscription model.
Simultaneously, renewed chatter about a landmark SpaceX initial public offering (IPO) targeting a $1.5 trillion valuation lifted sentiment across Musk’s broader business portfolio.
Tesla stock: What Elon Musk’s FSD Pivot means
On January 14, CEO Elon Musk announced via social media that Tesla will discontinue selling FSD as a one-time purchase and transition to subscription-only pricing starting February 14.
Currently, FSD costs $8,000 upfront or $99 per month in the United States.
The move appears designed to force Tesla’s customer base toward recurring revenue, a shift that Wall Street values highly.
Recurring fees are “stickier,” meaning customers who subscribe tend to stay subscribed longer than one-time purchasers abandon the product.
In investor parlance, this transforms Tesla’s business model from transaction-driven to annuity-like, boosting predictable, repeatable cash flows.
The math matters. At $99 per month, a customer would need nearly 7 years of continuous subscription to exceed the $8,000 one-time purchase price.
That threshold suggests Musk believes either the subscription price will rise or fewer customers will purchase upfront, directing revenue to a recurring revenue stream that analysts treat more favorably in valuation models.
The policy doesn’t change FSD’s technical limitations as it remains driver-assist software, not full autonomous driving, but it shifts investor focus toward monetization and margin expansion.
SpaceX IPO buzz
Separately, SpaceX developments provided a tailwind.
In early December 2025, Musk confirmed reports that SpaceX would pursue an IPO in 2026, targeting $1.5 trillion valuation, potentially the largest public offering on record.
While SpaceX is a separate company, the broader Musk ecosystem narrative lifts investor sentiment for Tesla.
Media coverage linking Musk’s multiple ventures as a unified “AI and robotics” empire has encouraged retail and some institutional capital to recycle bullish sentiment from one company to another.
Technical positioning ahead of earnings
The timing also reflects tactical positioning.
Tesla reports fourth-quarter earnings after market close on January 28.
Options traders have ramped up activity in recent sessions, with elevated volatility indicating expectations for a significant post-earnings move.
Historically, Tesla stock can swing 5-10% on earnings days depending on delivery numbers and management guidance.
Some traders were buying dips on January 14-15 to establish positions ahead of that catalyst, creating technical bounce potential that the FSD and SpaceX headlines amplified.
The skeptical view
Not all observers are convinced. Tesla faces structural headwinds: full-year 2025 deliveries declined 8.6% year-over-year, and Q4 missed Wall Street expectations.
The company’s energy business (battery storage) showed strength, 14.2 gigawatt-hours deployed in Q4, but that segment remains small relative to automotive.
Thursday’s rally reflects the intersection of product strategy (FSD monetization), ecosystem enthusiasm (SpaceX IPO), and technical positioning (pre-earnings buying).
Investors should await January 28 earnings for concrete evidence of whether these narratives translate to improved profitability.
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