TLDR
- Tesla stock was up 0.1% in premarket trading at $321.78 on Thursday
- The Netherlands approved FSD but is keeping its approval data secret, complicating wider EU adoption
- An EU-wide vote on FSD could happen in October, with a UN fallback vote possible in November
- Tesla reported 1.5 million FSD subscriptions at end of Q2, up 56% year over year, generating nearly $2 billion in annual revenue
- Q2 EPS of $0.33 missed the $0.50 consensus estimate, though revenue beat at $28.24 billion
Tesla stock edged higher in premarket trading Thursday as the company pushes to get its Full Self-Driving product approved across Europe, a move that could open up a major new revenue stream.
The stock was up about 0.1% at $321.78 in premarket. That puts it down 29% year to date and up just 1% over the past 12 months.
The Netherlands approved FSD earlier this year, making it the first EU country to do so. But Reuters reported that the Netherlands is keeping the approval data secret, which could slow other EU nations from simply adopting that decision.
If other EU countries don’t follow the Netherlands, Tesla’s path runs through the European Commission. A technical file would go to the Technical Committee on Motor Vehicles.
From there, if 55% of EU countries representing 65% of the population vote in favor, FSD gets the green light across the EU. That vote could happen in October.
If that route fails, Tesla can turn to the United Nations Economic Commission for Europe. A two-thirds majority vote there would effectively approve FSD across Europe. That vote could come in November.
FSD Revenue: A North America Story, For Now
Right now, all FSD subscription revenue comes from North America. Tesla had 1.5 million active FSD subscriptions at the end of Q2, up 56% year over year.
At $99 a month, that works out to roughly $2 billion in annual revenue. Tesla also said around 55% of cars sold in Q2 came with FSD subscriptions attached.
Europe could add meaningfully to that number if approval comes through.
Tesla’s Q2 results were a mixed bag. Revenue hit $28.24 billion, up 25.5% year over year and ahead of the $26.42 billion estimate. But EPS came in at $0.33, well below the $0.50 consensus. Operating income and free cash flow also disappointed.
Analyst Targets and Institutional Activity
Wall Street is split on the stock. The consensus rating sits at Hold, with an average price target of $401.74. Deutsche Bank has a $420 target, Canaccord Genuity rates it Buy with a $410 target, and Goldman Sachs also has a Buy rating.
On the bearish end, Wells Fargo holds an Underweight rating with a $130 target.
Sanders Morris Harris raised its Tesla stake by 54.6% in Q2, bringing its holdings to 7,684 shares worth around $3.23 million. Institutional investors collectively own 66.2% of the company.
ARK Invest’s Cathie Wood reportedly added another $14.3 million in Tesla in recent weeks. On the other side, Michael Burry is maintaining short positions in the stock.
Tesla’s 52-week range is $297.38 to $498.83. The stock trades at a P/E of 297.73.
China-made vehicle sales rose 37.8% year over year in July, the ninth straight month of growth.
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