Elon Musk said this week that about 4 million Tesla $TSLA vehicles will require new computers and cameras to ever achieve unsupervised Full Self-Driving, an acknowledgment that came after years of assurances that the cars were capable of eventual autonomy through software updates alone.
On the quarterly earnings call, Musk explained that Hardware 4 carries eight times the memory bandwidth of Hardware 3, Tesla's previous generation of driver-assistance hardware. "Hardware 3 simply does not have the capability to achieve unsupervised FSD," he said. "Memory bandwidth is one of the key elements needed for unsupervised FSD."
Tesla installed Hardware 3 in vehicles manufactured between 2019 and early 2023. Not all of those owners paid for the Full Self-Driving software package, which Tesla sold for up to $15,000 on the promise that it would eventually allow a car to drive itself without human supervision.
Existing service centers would be too bottlenecked to handle the volume of replacements at any useful pace, Musk said, which is why Tesla is exploring the construction of "microfactories" in major metropolitan areas. "If it's done just at the service center, it is extremely slow to do so, and inefficient. So we basically need, like many production lines, to make the change." Musk gave no indication of when, or whether, any such facilities would actually be built.
Tesla announced two options for FSD purchasers: a reduced-price trade-in credit applicable toward a Hardware 4 vehicle, or a retrofit of their current car with the updated computer and camera hardware required for Hardware 4. While longer-term fixes remain unscheduled, Engadget reports that a Hardware 3-compatible build of FSD version 14 is targeted for release before July.
Musk first acknowledged in January 2025 that Hardware 3 upgrades would likely be necessary. "I think the honest answer is that we're going to have to upgrade people's Hardware 3 computer for those that have bought Full Self-Driving," he said at the time. "That's going to be painful and difficult, but we'll get it done." That stance sat awkwardly alongside comments CFO Vaibhav Taneja made just six months prior: as late as October 2025, he had publicly insisted the company still believed a Hardware 3 solution was achievable, telling investors "we have not completely given up on HW3," per TechCrunch.
The admission carries potential legal exposure for Tesla. History offers a precedent: Electrek notes that when Hardware 2 turned out to be inadequate for autonomy, Tesla responded by giving FSD buyers complimentary Hardware 3 installations. Some Hardware 3 owners have already pursued legal action over Tesla's failure to deliver on its autonomy promises.