Tesla (TSLA) has to switch the ‘self-driving’ laptop inside about 4 million automobiles or doubtless compensate the homeowners of these automobiles.
The legal responsibility could possibly 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} vital 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 might imply Tesla homeowners would finally obtain a software program replace that may flip their automobiles 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 a lot of the automobiles Tesla has delivered during the last decade.
Tesla’s declare that its automobiles have “all of the {hardware} vital 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 package deal.
In 2023-2024, Tesla transitioned to a different new and extra highly effective “self-driving laptop”, HW4, in its new automobiles.
In contrast to when it transitioned from HW2.5 to HW3, this time, Tesla claimed it might 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 effectively and offered internationally”. He went so far as claiming that FSD efficiency on “HW4 will lag not less than 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 usually are not highly effective sufficient to attain unsupervised self-driving functionality.
There are about 4 million Tesla automobiles on this planet with HW3 computer systems:
| {Hardware} Model | Manufacturing Timeframe | Estimated Autos 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 automobiles 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 customary 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 believe the trustworthy reply is that we’re going to need to 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 tough however we’ll get it performed. Now I’m sort of glad that not that many individuals purchased the FSD package deal.
Musk says that changing all of the computer systems might 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, however 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 presents fewer ADAS options below the FSD package deal.
Globally, it’s protected to imagine not less than one other 100,000 HW3 automobiles with the FSD package deal, which ought to deliver Tesla’s retrofit requirement to over half one million models.
Musk is correct to say that changing the computer systems in over 500,000 Tesla automobiles might be “painful.” It is going to pressure its service capability tremendously, on prime of the price, which can simply surpass $500 million.
However that 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 automobiles since 2016 had “all of the {hardware} vital 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 doubtless aimed toward weakening claims for Tesla HW4 homeowners, however the case for HW3 homeowners is extra simple.
In 2019, Musk claimed “Tesla automobiles are actually appreciating property” due to their future self-driving capabilities. After all, this proved to be utterly incorrect.
However there’s one factor that’s true concerning the worth of Tesla automobiles: they’d be price extra if they’d computer systems able to supporting self-driving, which Musk simply admitted is just not the case. That’s no matter whether or not they purchased the FSD package deal or not.
Subsequently, there’s a robust 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 automobiles had “all of the {hardware} vital for self-driving.”
In truth, 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 will subscribe to Tesla’s Full Self-Driving program with none further value. 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} vital for full self-driving functionality,” the homeowners of these automobiles have to have all of the {hardware} essential to have entry to those options.
It’s a transparent case of false promoting. Tesla says, “Your automotive has all of the {hardware} vital for full self-driving,” and when an proprietor desires to strive the options, Tesla tells them, “It’s a must to pay $1,000 for us to improve your {hardware}.” One thing doesn’t add up.
Electrek’s Take
I might be shocked if Tesla does as Musk claimed and replaces HW3 computer systems in any automotive, not to mention over half one million automobiles, or accurately, about 4 million automobiles.
It’s too sophisticated and dear. 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 automobiles is just not actually excessive, regardless of HW4 automobiles not solely having extra highly effective computer systems but additionally higher cameras.
I don’t suppose it’s life like to imagine that Tesla will allow stage 4 or 5 self-driving capabilities in what are, in some circumstances, nearly 10-year-old automobiles by way of a pc retrofit.
My 2018 Mannequin 3 Efficiency was initially a HW 2.5 car, 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 imagine Tesla will ever supply a free laptop improve.
I believe Tesla must 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 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 would supply 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 supply something primarily based 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 help unsupervised self-driving. I imagine that these lawsuits will ramp up this yr.
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