Tesla (TSLA) saw its biggest jump in more than a year on June 29. The stock rose by more than 8% after the company began rolling out a major software update to millions of older cars.

The reason was Full Self-Driving (FSD) v14 Lite. It is a new version of Tesla’s self-driving software for older cars that have not received any important update for more than 14 months.

Why did Tesla’s stock rise?

Tesla has sold millions of cars with the promise that they will get self-driving features. If the company can deliver an important upgrade to these cars without customers having to buy a new vehicle, Tesla shows that it can keep even older customers.

Owners also have a reason to start subscribing to Tesla’s FSD service, which costs $99 per month. The subscription has become a growing revenue stream for Tesla. The rise on June 29 also came when the market had higher expectations ahead of Tesla’s Q2 report.

Morgan Stanley raised its forecast to 413,000 delivered vehicles in Q2. This is higher than the Wall Street average. The bank cited recovered sales in Europe and China.

Investors following the entire Elon Musk portfolio have also seen how market sentiment has shifted between Tesla and SpaceX since the June introduction.

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. The system handles much of the driving, lane changes, traffic lights, and parking, but the driver always needs to stay alert and maintain control.

The v14 Lite update applies to cars with Tesla’s older Hardware 3 (HW3) chip, sold from about 2019 onward. Those cars used FSD version 12.6 since early 2025. Meanwhile, newer Tesla models received version 14, which includes features such as automatic parking and gear shifting.

Tesla’s AI-chef Ashok Elluswamy presented the update on X on June 29. He said that the new version “collects driving behavior from AI4’s v14 series” into the older hardware, where “clearly improved safety” is the biggest news.

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 config of AI3. It includes destination…

— Ashok Elluswamy (@aelluswamy) June 29, 2026

Whether the stock keeps rising likely depends on Tesla’s delivery figures coming later this week, as well as the first results from FSD v14 Lite.