Tesla (TSLA) jumped by more than 8% after recording its highest single-day gain in over a year on June 29. This is the result of the company rolling out a large-scale software update to hundreds of millions of older vehicles.

The catalyst for this rally was FSD v14 Lite. FSD v14 Lite is Tesla’s new autonomous driving software version for older vehicles that had not received any meaningful updates for more than 14 months.

Why did Tesla’s stock surge?

Tesla has promised that as it sells millions of vehicles, more autonomous driving features will be added in the future. The fact that owners can receive meaningful upgrades to their existing vehicles without buying a new car shows that Tesla can keep existing customers as loyal customers.

This update also gives owners a reason to subscribe to Tesla’s FSD monthly $99 service. The service is growing steadily as a company revenue stream. The surge on June 29 also coincided with growing expectations ahead of Tesla’s release of second-quarter delivery results.

Morgan Stanley raised its forecast for vehicle deliveries in the second quarter to 413,000 units. The figure exceeds the Wall Street consensus and was based on signs that sales are recovering in Europe and China.

Investors who are watching broader Elon Musk investment trends are paying attention as well to how sentiment between Tesla and SpaceX may have changed following Musk’s listing in June.

Morgan Stanley's Andrew Percoco in new $TSLA note:"We now forecast 1.6M vehicle deliveries in 2026 vs. 1.58M previously. Beyond 2026, we expect auto demand to reaccelerate (mid-teens volume delivery CAGR from 2026-2030) supported by the combination of new model launches…

— Sawyer Merritt (@SawyerMerritt) April 6, 2026

What is FSD v14 Lite?

FSD is Tesla’s driver-assistance system. It can handle many driving tasks such as lane changes, recognizing traffic lights, and parking, but drivers must always stay attentive and actively operate the vehicle.

The v14 Lite update targets Tesla vehicles equipped with the older Hardware 3 (HW3) chips sold around 2019. These vehicles have been using FSD version 12.6 since early 2025. Meanwhile, the latest Tesla vehicles have been upgraded to version 14, adding features such as auto-parking and gear shifting.

Tesla AI vice president Ashok Elluswamy announced an update release on X on June 29. He said this build distills driving characteristics from the AI4 v14 series and applies them to older hardware, and called the headline upgrade “a significant improvement in safety.”

FSD v14 Lite is now rolling out to AI3 early-access customers. Based on the feedback, will rollout to more customers over the next few weeks. This build distills the driving behavior from AI4’s v14 series into both the camera and compute configuration of AI3. It includes destination…

— Ashok Elluswamy (@aelluswamy) June 29, 2026

The initial performance data for Tesla deliveries and FSD v14 Lite, expected to be announced this week, is expected to be a key factor in determining whether the stock can hold on to this upward move.