Tesla Navigates Legal Challenges and Strategic Pivots

As the week concluded, Tesla found itself at the intersection of strategic realignment and legal turbulence. The electric vehicle maker is attempting to revitalize its lagging energy division while its CEO faces a significant courtroom battle. Concurrently, a fundamental shift in how it sells its autonomous driving software promises to reshape the company's future revenue streams.

A major strategic shift is underway in Tesla's approach to its "Full Self-Driving" (FSD) software. The company has confirmed it will eliminate the option for a one-time purchase of the system after February 14, 2026. Moving forward, new customers will only be able to access the Autopilot features through a monthly subscription, currently priced at $99.

While this move eliminates the immediate recognition of substantial revenue—approximately $8,000 per one-time sale—it is designed to build a foundation of stable, recurring income. Market observers note this transition aligns with CEO Elon Musk's compensation goals, which are tied to achieving milestones such as "10 million active FSD subscriptions."

CEO Musk Faces Courtroom Showdown

Adding a layer of uncertainty, a legal proceeding involving Elon Musk is moving forward. On Friday, U.S. District Judge Yvonne Gonzalez Rogers denied motions from OpenAI and Microsoft to dismiss a lawsuit filed by Musk. The case, in which Musk accuses OpenAI of betraying its original non-profit mission, is now headed for a jury trial scheduled for spring.

Investors are viewing this development as a potential distraction, concerned that a protracted legal process could divert management's focus, particularly that of the CEO, from day-to-day operational responsibilities.

Should investors sell immediately? Or is it worth buying Tesla?

Energy Division Seeks Revival with New Hardware

On the operational front, Tesla is launching an offensive to counter declining sales in its solar business. The company began selling new high-performance solar panels for the residential market on Friday. These black panels, with outputs of 415 W and 420 W, aim to stimulate demand ahead of an anticipated late-2025 market recovery.

The hardware launch is strategically supported by updated leasing offers. Tesla intends to make the combined package of solar panels and its Powerwall battery storage system more attractive to consumers, seeking to reignite growth in this segment.

Mixed Signals from Asian Markets

Tesla's performance in international markets presents a contrasting picture. The company is grappling with significant sales challenges in India, where only 225 Model Y units were sold throughout the entire 2025 calendar year. In response, Tesla is now offering discounts on inventory vehicles in that market.

Conversely, in competitive markets like China and Malaysia, Tesla is focusing on model refreshes to maintain appeal. For the 2026 model year, the Model Y received updates including larger screens, implemented without an increase to the base price.

All eyes are now on the upcoming earnings call. Tesla's management will need to provide clarity on how the shift away from high-margin, one-time FSD payments will impact short-term profitability, and whether the new solar products can initiate the hoped-for turnaround in the energy business. The stock, currently trading at $438.57, is likely to remain sensitive to any new developments regarding the OpenAI trial calendar in the interim.