Tesla reports 1.74 million self-driving users using a metric tied to executive pay

Tesla has disclosed that it now counts 1.74 million active Full Self-Driving subscriptions, a figure that has grown by 67% compared to the same period last year. The company detailed this metric in its Q3 2026 shareholder letter, noting that the number follows the specific guidelines established in the 2025 CEO Performance Award. Under these rules, the total includes both customers who pay monthly and those who purchased the software as a one-time upfront cost.

This method of counting has significant implications for how investors view the company’s software business. Owners who bought the feature outright, some of them several years ago, are included in the subscriber base as long as their vehicles remain active. This approach is particularly relevant because reaching 10 million active subscriptions is a key milestone required for Elon Musk to receive his full compensation package. The metric also encompasses hundreds of thousands of customers who were originally sold the promise of unsupervised self-driving, a capability Tesla has not yet fully delivered.

The shift in how Tesla reports these numbers follows a change in its sales strategy. The company stopped selling the feature as a one-time purchase on February 14, 2026. New customers in the US can now only access it through a monthly subscription at a rate of $99. However, the 1.74 million figure still includes everyone who paid upfront before that date, with prices for the one-time purchase having reached as high as $15,000. The only group excluded from this count is those on free trials, though Tesla has not specified how many of the current users are actually paying the monthly fee.

The company applied a similar logic to its cumulative delivery figures. The letter states that Tesla has delivered 10.2 million vehicles in total. This number also includes unsupervised robotaxis placed into commercial operation, a definition that matches the 20 million vehicle milestone found in the CEO’s pay package. This consistency in counting methods suggests a deliberate effort to align reported metrics with the specific operational targets set for executive compensation.

In terms of adoption rates, Tesla reported that more than 75% of new deliveries in North America during the third quarter included the software. The company described this as a nearly 20 percentage point increase from the previous quarter and suggested that the feature is driving demand in markets where it is available. However, the letter does not define this attach rate with the same precision as the active subscription count. It is unclear whether this figure includes introductory offers or how many of those buyers continue to pay after the initial period.

The path to the 10 million subscription milestone is long. The CEO’s award structure consists of 12 tranches, each requiring both a market cap increase and an operational achievement. The operational goals include 20 million deliveries, 10 million active subscriptions, one million Optimus robots, one million robotaxis, and specific adjusted EBITDA targets. As of June 30, Tesla considered only the delivery milestone probable. The company added 260,000 net subscriptions in the third quarter, its best performance to date.

At the current pace of adding 260,000 per quarter, it would take approximately eight years to reach the 10 million target. If the company maintains the average pace of the last 12 months, which is about 700,000 per year, the timeline extends to nearly 12 years. The compensation plan remains in effect until 2035. While counting one-time buyers is not inherently incorrect, presenting the total as proof of subscription momentum may be misleading for investors trying to understand the recurring revenue of the business.

The 75% attach rate remains a point of interest, as a high take rate for a $99 monthly product would indicate a strong software business. However, the lack of transparency regarding retention and the specific composition of the subscriber base leaves questions unanswered. The board defined the metric, the CEO’s pay depends on it, and the company has yet to break down how many users are paying monthly versus those who bought the feature outright.