Tesla (TSLA) has to switch the ‘self-driving’ pc inside about 4 million autos or seemingly compensate the homeowners of these autos.
The legal responsibility could possibly be extra vital than the most important automotive recall when it comes to price.
In 2016, Tesla claimed that every one its autos in manufacturing going ahead have “all of the {hardware} obligatory for full self-driving functionality.”
Tesla’s use of the time period “full self-driving” has modified over time, however on the time and for years later, CEO Elon Musk claimed that it could imply Tesla homeowners would ultimately obtain a software program replace that may flip their autos into “robotaxis” able to level-4-5 self-driving, which implies unsupervised autonomous driving even with nobody within the automobiles.
Virtually 10 years later, this has but to occur and received’t occur quickly in many of the automobiles Tesla has delivered during the last decade.
Tesla’s declare that its autos have “all of the {hardware} obligatory for full self-driving functionality” shortly proved unfaithful.
On the time, Tesla was producing its autos with cameras, a front-facing radar, ultrasonic sensors, and a “self-driving” pc, known as HW2.5.”
Tesla shortly began constructing new autos with a brand new “HW3 self-driving pc” and admitted that its HW2.5 pc was not highly effective sufficient to attain self-driving functionality.
The automaker began retrofitting current HW2.5 autos at no cost with new HW3 computer systems owned by drivers who purchased Tesla’s ‘Full Self-Driving’ (FSD) software program package deal.
In 2023-2024, Tesla transitioned to a different new and extra highly effective “self-driving pc”, HW4, in its new autos.
In contrast to when it transitioned from HW2.5 to HW3, this time, Tesla claimed it could nonetheless be capable of ship its robotaxi self-driving functionality to HW3 autos.
Musk even claimed that FSD will get higher on HW3 first, as Tesla’s “focus must be on getting FSD on HW3 working tremendous properly and offered internationally”. He went so far as claiming that FSD efficiency on “HW4 will lag at the least 6 months behind HW3” due to this.
That didn’t final lengthy.
In 2024, we began to report that Tesla was reaching the bounds of the HW3 pc, whereas the capabilities have been nowhere close to the promised unsupervised robotaxi-level autonomous driving.
It took one other 6 months, however in January 2025, Musk lastly admitted that HW3 computer systems aren’t highly effective sufficient to attain unsupervised self-driving functionality.
There are about 4 million Tesla autos on this planet with HW3 computer systems:
| {Hardware} Model | Manufacturing Timeframe | Estimated Automobiles Produced (International) | Rollout & Overlap |
|---|---|---|---|
| HW3 (FSD Laptop) | Apr 2019 – Late 2023 (phased out) | ~4 million (approx.) | Normal in all fashions from 2019–2022; remained in some automobiles by means of 2023. Overlap with HW4 throughout 2023. |
| HW4 (FSD Laptop) | Jan 2023 – Current (ongoing) | ~2.5–3 million (approx.) | Launched Jan 2023 (S/X first); turned customary throughout all fashions by early 2024. Overlapped with HW3 in 2023. |
When admitting the pc received’t assist the promised self-driving capabilities, Musk mentioned that Tesla would retrofit the computer systems of all HW3 automobile homeowners who bought the FSD package deal:
I imply, I believe the trustworthy reply is that we’re going to should improve folks’s {Hardware} 3 pc for those who have purchased full self-driving, and that’s the trustworthy reply and that’s going to be painful and tough however we’ll get it executed. Now I’m type of glad that not that many individuals purchased the FSD package deal.
Musk says that changing all of the computer systems will probably be “painful,” and he’s “glad” that “not that many individuals purchased the FSD package deal.”
Tesla by no means disclosed the official take price of its Full Self-Driving (FSD) package deal, but it surely did disclose having 400,000 FSD beta testers in North America by the tip of 2022.
The take-rate is believed to be a lot decrease globally as a result of restricted worth in different markets the place Tesla gives fewer ADAS options below the FSD package deal.
Globally, it’s protected to imagine at the least one other 100,000 HW3 autos with the FSD package deal, which ought to carry Tesla’s retrofit requirement to over half one million models.
Musk is true to say that changing the computer systems in over 500,000 Tesla autos will probably be “painful.” It would pressure its service capability tremendously, on prime of the price, which is able to simply surpass $500 million.
However which may simply be the start.
Tesla promised self-driving {hardware} in all automobiles
Musk and Tesla not solely made guarantees to those that purchased the FSD package deal, however they promised anybody shopping for Tesla autos since 2016 had “all of the {hardware} obligatory for full self-driving functionality.”
As we beforehand reported, Tesla eliminated the declare from its web site final yr and adjusted the language across the FSD package deal, which was seemingly geared toward weakening claims for Tesla HW4 homeowners, however the case for HW3 homeowners is extra easy.
In 2019, Musk claimed “Tesla autos at the moment are appreciating belongings” due to their future self-driving capabilities. After all, this proved to be utterly incorrect.
However there’s one factor that’s true in regards to the worth of Tesla autos: they might be value extra if that they had computer systems able to supporting self-driving, which Musk simply admitted will not be the case. That’s no matter whether or not they purchased the FSD package deal or not.
Due to this fact, there’s a powerful argument to be made that Tesla wants to switch computer systems in all HW3 automobiles or on the very least, compensate the homeowners for falsely claiming that the autos had “all of the {hardware} obligatory for self-driving.”
The truth is, there’s already authorized precedent for this.
In 2022, a choose ordered Tesla to improve a buyer’s self-driving pc at no cost in order that they will subscribe to Tesla’s Full Self-Driving program with none further price. It created a precedent for Tesla homeowners who don’t buy the FSD package deal.
Based mostly on Tesla’s assertion that “all automobiles produced since 2016 have the {hardware} obligatory for full self-driving functionality,” the homeowners of these autos must have all of the {hardware} essential to have entry to those options.
It’s a transparent case of false promoting. Tesla says, “Your automobile has all of the {hardware} obligatory for full self-driving,” and when an proprietor desires to strive the options, Tesla tells them, “It’s important to pay $1,000 for us to improve your {hardware}.” One thing doesn’t add up.
Electrek’s Take
I might be stunned if Tesla does as Musk claimed and replaces HW3 computer systems in any automobile, not to mention over half one million automobiles, or correctly, about 4 million autos.
It’s too sophisticated and expensive. It will add lots of of 1000’s of labor hours to Tesla’s already ultra-busy service operations, and it might not even work.
After being incorrect about HW2.5 and HW3, the extent of confidence in Tesla attaining unsupervised self-driving on HW4 autos will not be actually excessive, regardless of HW4 autos not solely having extra highly effective computer systems but in addition higher cameras.
I don’t assume it’s practical to imagine that Tesla will allow degree 4 or 5 self-driving capabilities in what are, in some circumstances, nearly 10-year-old autos by means of a pc retrofit.
My 2018 Mannequin 3 Efficiency was initially a HW 2.5 automobile, and I bought the FSD package deal. Tesla upgraded my pc to HW3 in 2019. We at the moment are in 2025, and Musk lastly admitted that the pc I purchased 6 years in the past received’t allow the self-driving capability I used to be promised.
My automobile won’t ever be self-driving, and I don’t imagine Tesla will ever provide a free pc improve.
I believe Tesla must compensate each Tesla HW3 proprietor worldwide. That will imply about 4 million autos and a legal responsibility of a number of billion {dollars}.
At first, as an alternative of the pc retrofit, I believe Tesla will use this as a possibility to encourage folks to improve, prefer it did with the “FSD switch home windows.” Perhaps it is going to provide buybacks at a better price to compensate homeowners.
As for many who didn’t purchase the FSD package deal, I don’t assume Tesla will provide something based mostly on Musk’s messaging. It must undergo the courts.
There are already a number of lawsuits filed in opposition to Tesla over its self-driving claims, and that was earlier than Musk’s admission that HW3 received’t assist unsupervised self-driving. I imagine that these lawsuits will ramp up this yr.
