Thursday, May 29, 2025

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Tesla to Replace Self-Driving Hardware After Years of ‘Future-Proof’ Claims

Elon Musk has finally admitted Tesla (Nasdaq: TSLA) needs to replace the self-driving computers in cars sold with its Full Self-Driving package. 

During Wednesday’s earnings call, the Tesla CEO acknowledged what many had long suspected: “The truth is that we will need to replace all HW3 computers in vehicles where FSD was purchased.” 

He later added that the process would be “painful and difficult.”

Also read: Tesla Misses Earnings Estimates In Q4 2024, EPS Crashes 53%

The announcement affects every Tesla made between April 2019 and early 2023 that came with Hardware 3 (HW3) computing systems. Tesla had repeatedly assured buyers during this period that their cars would achieve autonomous driving capabilities once the software was ready.

Making the upgrade work won’t be simple. Tesla’s engineers can’t just install the newest Hardware 4 computers into older vehicles — the systems aren’t compatible. Instead, Tesla must design an entirely new solution from scratch. The company has done this before, when it created special hardware to upgrade older vehicles from HW2.5 to HW3, but this time the scale is much larger.

During the earnings call, Musk appeared to acknowledge the scale of the problem, saying he was “kind of glad that not that many people bought the FSD package.” 

Tesla plans to provide free upgrades only to customers who purchased the FSD package, which has varied dramatically in price from an initial cost of $2,000 to as high as $15,000. 

But, as Electrek CEO Fred Lambert notes, it’s not just for the cars whose users bought FSD. “​​The truth is that anyone who bought a Tesla with HW3 is owed the capacity for their vehicle to become self-driving. Don’t let them lie to you,” he wrote.

This promise appears in a now-deleted blog post which claimed Tesla’s electric vehicles would eventually offer autonomous rides and could serve as robotaxis when owners weren’t using them. 

Claims like these have already led to legal consequences — Tesla lost a court case when an owner sued after being charged for hardware upgrades needed for the FSD subscription service. The judge sided with the owner, requiring Tesla to pay for the retrofit based on the company’s claim that “all cars produced since 2016 are capable of Full Self-Driving.”


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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