Tesla (TSLA) has to interchange the ‘self-driving’ laptop inside about 4 million autos or seemingly compensate the homeowners of these autos.
The legal responsibility might be extra important than the biggest automotive recall when it comes to value.
In 2016, Tesla claimed that each one its autos in manufacturing going ahead have “all of the {hardware} essential for full self-driving functionality.”
Tesla’s use of the time period “full self-driving” has modified through the years, 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 vehicles.
Virtually 10 years later, this has but to occur and received’t occur quickly in many of the vehicles Tesla has delivered over the past decade.
Tesla’s declare that its autos have “all of the {hardware} essential 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” laptop, referred to as HW2.5.”
Tesla shortly began constructing new autos with a brand new “HW3 self-driving laptop” and admitted that its HW2.5 laptop was not highly effective sufficient to realize self-driving functionality.
The automaker began retrofitting current HW2.5 autos without 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 laptop”, HW4, in its new autos.
In contrast to when it transitioned from HW2.5 to HW3, this time, Tesla claimed it could nonetheless have the ability to 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 a minimum of 6 months behind HW3” due to this.
That didn’t final lengthy.
In 2024, we began to report that Tesla was reaching the boundaries of the HW3 laptop, whereas the capabilities had 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 usually are not highly effective sufficient to realize 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.) | Commonplace in all fashions from 2019–2022; remained in some vehicles by way 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 commonplace throughout all fashions by early 2024. Overlapped with HW3 in 2023. |
When admitting the pc received’t help the promised self-driving capabilities, Musk stated that Tesla would retrofit the computer systems of all HW3 automotive homeowners who bought the FSD package deal:
I imply, I feel the trustworthy reply is that we’re going to should improve individuals’s {Hardware} 3 laptop 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 finished. Now I’m form of glad that not that many individuals purchased the FSD package deal.
Musk says that changing all of the computer systems will likely be “painful,” and he’s “glad” that “not that many individuals purchased the FSD package deal.”
Tesla by no means disclosed the official take fee of its Full Self-Driving (FSD) package deal, nevertheless it did disclose having 400,000 FSD beta testers in North America by the top of 2022.
The take-rate is believed to be a lot decrease globally because of the restricted worth in different markets the place Tesla provides fewer ADAS options beneath the FSD package deal.
Globally, it’s protected to imagine a minimum of one other 100,000 HW3 autos with the FSD package deal, which ought to carry Tesla’s retrofit requirement to over half 1,000,000 models.
Musk is true to say that changing the computer systems in over 500,000 Tesla autos will likely be “painful.” It’ll pressure its service capability tremendously, on prime of the associated fee, which is able to simply surpass $500 million.
However that may simply be the start.
Tesla promised self-driving {hardware} in all vehicles
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} essential for full self-driving functionality.”
As we beforehand reported, Tesla eliminated the declare from its web site final 12 months 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 are actually appreciating belongings” due to their future self-driving capabilities. After all, this proved to be utterly fallacious.
However there’s one factor that’s true concerning the worth of Tesla autos: they’d be value extra if that they had computer systems able to supporting self-driving, which Musk simply admitted shouldn’t 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 robust argument to be made that Tesla wants to interchange computer systems in all HW3 vehicles or on the very least, compensate the homeowners for falsely claiming that the autos had “all of the {hardware} essential 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 laptop without cost in order that they will subscribe to Tesla’s Full Self-Driving program with none extra value. It created a precedent for Tesla homeowners who don’t buy the FSD package deal.
Primarily based on Tesla’s assertion that “all vehicles produced since 2016 have the {hardware} essential for full self-driving functionality,” the homeowners of these autos have to have all of the {hardware} essential to have entry to those options.
Electrek’s Take
I’d be shocked if Tesla does as Musk claimed and replaces HW3 computer systems in any automotive, not to mention over half 1,000,000 vehicles, or correctly, about 4 million autos.
It’s too difficult and expensive. It might add tons of of 1000’s of labor hours to Tesla’s already ultra-busy service operations, and it could not even work.
After being fallacious about HW2.5 and HW3, the extent of confidence in Tesla attaining unsupervised self-driving on HW4 autos shouldn’t be actually excessive, regardless of HW4 autos not solely having extra highly effective computer systems but additionally higher cameras.
I don’t suppose it’s life like to consider that Tesla will allow stage 4 or 5 self-driving capabilities in what are, in some instances, virtually 10-year-old autos by way 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 laptop to HW3 in 2019. We are actually 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 automotive won’t ever be self-driving, and I don’t consider Tesla will ever provide a free laptop improve.
I feel Tesla should compensate each Tesla HW3 proprietor worldwide. That might imply about 4 million autos and a legal responsibility of a number of billion {dollars}.
At first, as a substitute of the pc retrofit, I feel Tesla will use this as a possibility to encourage individuals to improve, prefer it did with the “FSD switch home windows.” Possibly it’s going to provide buybacks at the next fee to compensate homeowners.
As for individuals who didn’t purchase the FSD package deal, I don’t suppose Tesla will provide something based mostly on Musk’s messaging. It should undergo the courts.
There are already a number of lawsuits filed towards Tesla over its self-driving claims, and that was earlier than Musk’s admission that HW3 received’t help unsupervised self-driving. I consider that these lawsuits will ramp up this 12 months.
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