Tesla has updated the terms governing its Full Self-Driving (FSD) software in ways that indicate the company can change pricing, features, and availability. The update arrives as the company faces regulatory scrutiny in California over how it markets its driver-assistance technology. For owners who paid a premium for FSD, changes to the agreement add uncertainty about what they purchased and what it may look like going forward.
What the Updated FSD Terms Actually Say
The revised user agreement for Tesla’s FSD software includes language indicating Tesla can modify the price, features, or availability of the system. That can conflict with the common expectation that a high-cost software purchase locks in a defined set of capabilities. For buyers who spent thousands of dollars on FSD, the updated agreement underscores that the product’s scope may change over time.
This kind of blanket flexibility is unusual for consumer technology products at this price point. Software companies routinely update terms of service, but few reserve the right to strip or reshape features a customer has already paid for without any advance warning. The language effectively converts FSD from a fixed product into a subscription-like arrangement where the seller controls both the content and the cost, even after the initial transaction is complete. For prospective buyers weighing the purchase, this clause should factor heavily into any cost-benefit calculation, because it defines not just what FSD is today, but how fragile any promised feature may be over the life of the vehicle.
California Found Tesla’s Marketing Misleading
Separately, Tesla has faced regulatory action in California tied to how it describes its driver-assistance features. The California DMV adopted an administrative law judge’s proposed decision finding that Tesla violated state law through its use of the terms “Autopilot” and “Full Self-Driving Capability.” According to the DMV, the administrative law judge found Tesla’s marketing language could mislead consumers about the vehicles’ capabilities.
The DMV said the decision requires Tesla to take certain actions related to its advertising and sales practices. The DMV’s finding may carry weight beyond California because it creates an official record from a state regulator about how Tesla’s marketing could be interpreted, potentially influencing how other jurisdictions approach similar complaints.
Flexible Terms as a Regulatory Buffer
One way to read Tesla’s updated agreement is as an attempt to give the company more flexibility if regulators or other circumstances force changes to how FSD is offered. If Tesla can change features or availability under its terms, it may be able to adjust the product more quickly in response to new rules or enforcement actions. That said, how any specific dispute would play out would depend on the exact contract language and applicable law.
This strategy may stabilize Tesla’s position with regulators and investors, but it creates a clear tension with the people who actually use the software. Early adopters who purchased FSD based on promises of future robotaxi functionality or full autonomous driving now face a legal framework that explicitly allows Tesla to walk back those capabilities. The terms do not guarantee that any current feature will persist, and they do not promise that future updates will expand rather than narrow what the software can do. For a product marketed on the promise of ever-improving artificial intelligence, that is a striking concession buried in the fine print, and it highlights how contractual language can quietly undercut the more aspirational claims made in product launches and investor presentations.
What This Means for Current and Future Owners
The practical impact for Tesla owners breaks down along two lines. Current FSD purchasers may have fewer assurances that the software will retain its present capabilities if Tesla updates the product. If Tesla removes a feature, changes availability, or adjusts pricing going forward, the updated agreement could limit what customers can expect. (The exact consumer impact would depend on the specific contract language and any applicable consumer-protection rules.)
For potential buyers, the calculus has shifted. Purchasing FSD is no longer a bet on whether the technology will improve; it is also a bet on whether Tesla will choose to deliver those improvements to existing customers or restructure the product in ways that reduce its value. The absence of any price-lock or feature-lock provision means that Tesla could, in theory, move FSD to a recurring subscription model and require current owners to pay again for access they thought they had already secured. While Tesla has not announced such a move, the legal groundwork is now in place, and the updated agreement reminds buyers that ownership of software-defined features is fundamentally different from owning the physical hardware of the car.
Regulatory Pressure Is Not Slowing Down
The California DMV’s finding against Tesla could also be watched by other jurisdictions. The DMV’s decision to adopt the administrative law judge’s ruling that Tesla’s use of “Autopilot” and “Full Self-Driving Capability” was misleading may set a precedent that other states consider. If additional jurisdictions reach similar conclusions, Tesla could face a patchwork of restrictions that force further changes to how FSD is sold and described.
Those developments would unfold against a broader backdrop in which state-level authorities oversee consumer protection and transportation issues. In California, the state government portal serves as a hub for public information and links to agencies. Tesla’s decision to build more flexibility into its FSD terms suggests the company is trying to preserve room to adjust how the product is offered. Whether courts or consumer-protection agencies would accept certain contractual limits if disputes arise remains an open question.
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*This article was researched with the help of AI, with human editors creating the final content.
