Tesla (TSLA) has to interchange the ‘self-driving’ laptop inside about 4 million automobiles or doubtless compensate the homeowners of these automobiles.
The legal responsibility may very well be extra important than the biggest automotive recall by way of value.
In 2016, Tesla claimed that every one its automobiles in manufacturing going ahead have “all of the {hardware} needed 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 finally obtain a software program replace that might flip their automobiles into “robotaxis” able to level-4-5 self-driving, which implies unsupervised autonomous driving even with nobody within the vehicles.
Nearly 10 years later, this has but to occur and gained’t occur quickly in a lot of the vehicles Tesla has delivered over the past decade.
Tesla’s declare that its automobiles have “all of the {hardware} needed for full self-driving functionality” rapidly proved unfaithful.
On the time, Tesla was producing its automobiles with cameras, a front-facing radar, ultrasonic sensors, and a “self-driving” laptop, known as HW2.5.”
Tesla rapidly began constructing new automobiles with a brand new “HW3 self-driving laptop” and admitted that its HW2.5 laptop was not highly effective sufficient to attain self-driving functionality.
The automaker began retrofitting current HW2.5 automobiles totally free with new HW3 computer systems owned by drivers who purchased Tesla’s ‘Full Self-Driving’ (FSD) software program bundle.
In 2023-2024, Tesla transitioned to a different new and extra highly effective “self-driving laptop”, HW4, in its new automobiles.
Not like 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 automobiles.
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 bounds 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 should not highly effective sufficient to attain unsupervised self-driving functionality.
There are about 4 million Tesla automobiles on the planet with HW3 computer systems:
| {Hardware} Model | Manufacturing Timeframe | Estimated Automobiles Produced (World) | Rollout & Overlap |
|---|---|---|---|
| HW3 (FSD Pc) | Apr 2019 – Late 2023 (phased out) | ~4 million (approx.) | Customary in all fashions from 2019–2022; remained in some vehicles by 2023. Overlap with HW4 throughout 2023. |
| HW4 (FSD Pc) | 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 gained’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 bundle:
I imply, I believe the trustworthy reply is that we’re going to should improve folks’s {Hardware} 3 laptop for people who have purchased full self-driving, and that’s the trustworthy reply and that’s going to be painful and troublesome however we’ll get it carried out. Now I’m form of glad that not that many individuals purchased the FSD bundle.
Musk says that changing all of the computer systems can be “painful,” and he’s “glad” that “not that many individuals purchased the FSD bundle.”
Tesla by no means disclosed the official take price of its Full Self-Driving (FSD) bundle, however it 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 because of the restricted worth in different markets the place Tesla presents fewer ADAS options underneath the FSD bundle.
Globally, it’s secure to imagine a minimum of one other 100,000 HW3 automobiles with the FSD bundle, which ought to deliver Tesla’s retrofit requirement to over half 1,000,000 items.
Musk is correct to say that changing the computer systems in over 500,000 Tesla automobiles can be “painful.” It’s going to pressure its service capability tremendously, on high of the associated fee, which is able to simply surpass $500 million.
However which 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 bundle, however they promised anybody shopping for Tesla automobiles since 2016 had “all of the {hardware} needed 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 bundle, which was doubtless aimed toward weakening claims for Tesla HW4 homeowners, however the case for HW3 homeowners is extra easy.
In 2019, Musk claimed “Tesla automobiles at the moment are appreciating property” due to their future self-driving capabilities. In fact, this proved to be fully unsuitable.
However there’s one factor that’s true in regards to the worth of Tesla automobiles: they’d be price extra if that they had computer systems able to supporting self-driving, which Musk simply admitted just isn’t the case. That’s no matter whether or not they purchased the FSD bundle or not.
Subsequently, 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 automobiles had “all of the {hardware} needed for self-driving.”
The truth is, there’s already authorized precedent for this.
In 2022, a decide ordered Tesla to improve a buyer’s self-driving laptop totally free in order that they’ll 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 bundle.
Based mostly on Tesla’s assertion that “all vehicles produced since 2016 have the {hardware} needed for full self-driving functionality,” the homeowners of these automobiles 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 accurately, about 4 million automobiles.
It’s too difficult and dear. It could add tons of of 1000’s of labor hours to Tesla’s already ultra-busy service operations, and it might not even work.
After being unsuitable about HW2.5 and HW3, the extent of confidence in Tesla reaching unsupervised self-driving on HW4 automobiles just isn’t actually excessive, regardless of HW4 automobiles not solely having extra highly effective computer systems but additionally higher cameras.
I don’t suppose it’s practical to consider that Tesla will allow degree 4 or 5 self-driving capabilities in what are, in some circumstances, nearly 10-year-old automobiles by a pc retrofit.
My 2018 Mannequin 3 Efficiency was initially a HW 2.5 automobile, and I bought the FSD bundle. Tesla upgraded my laptop 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 gained’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 supply a free laptop improve.
I believe Tesla should compensate each Tesla HW3 proprietor worldwide. That will imply about 4 million automobiles and a legal responsibility of a number of billion {dollars}.
At first, as a substitute 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 supply buybacks at a better price to compensate homeowners.
As for individuals who didn’t purchase the FSD bundle, I don’t suppose Tesla will supply 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 gained’t help unsupervised self-driving. I consider that these lawsuits will ramp up this yr.
