Tesla stock crept up 0.1% in early trading Thursday, sitting at $321.78. The move comes as the company pursues regulatory approval for Full Self-Driving across Europe, a potential revenue unlock worth billions if it clears the bureaucratic gauntlet ahead.
The Netherlands became the first EU nation to approve FSD earlier this year, but kept its approval data locked away. That secrecy matters. Without public reasoning, other countries won't simply rubber-stamp the decision, forcing Tesla down a longer regulatory path. The European Commission now holds the keys. A technical file goes to the Technical Committee on Motor Vehicles, where approval requires 55% of EU countries representing 65% of the population voting yes. October is the likely window for that vote.
If that fails, Tesla pivots to the United Nations Economic Commission for Europe. A two-thirds majority there would effectively green-light FSD across the continent, with a November decision possible. Two shots on goal, basically. Europe's population dwarfs North America's, so approval could reshape Tesla's subscription economics overnight.
Where the money sits right now
FSD subscriptions pull in roughly $2 billion annually at current scale. Tesla logged 1.5 million active subscribers at Q2's end, up 56% year over year at $99 monthly. All that revenue comes from North America today. Q2 saw 55% of cars sold bundled with FSD attached, showing the product's grip on the customer base. Europe flipping on means potentially millions of new subscribers across mature markets with serious automotive spending power.
Earnings missed, but FSD momentum builds
Tesla's second-quarter results painted a mixed picture. Revenue crushed expectations at $28.24 billion, up 25.5% annually, but EPS landed at $0.33, well short of the $0.50 consensus. Operating income and free cash flow both disappointed investors. The stock sits down 29% year to date, up just 1% over twelve months, despite FSD subscription gains accelerating.
Wall Street stays divided. The consensus rating holds at Hold with an average price target of $401.74, though pockets of optimism exist. Deutsche Bank targets $420, while Canaccord Genuity rates the stock Buy at $410. The FSD approval timeline will likely shape near-term price action more than quarterly beats or misses.
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