Elon Musk said Wednesday that millions of Tesla owners will need hardware upgrades to run a future version of its Full Self-Driving software that doesn’t require human supervision — after he and Tesla spent years promising that wouldn’t happen.
The admission could open the company to legal challenges from customers who bought Teslas believing the cars were just one software update away from being able to drive themselves.
Musk said on Tesla’s quarterly earnings call on Wednesday that cars with the third version of Tesla’s driver-assistance technology, known as “Hardware 3,” will need a new computer and new cameras. He also said those replacements will be so onerous that Tesla is considering building “micro-factories” in “major metropolitan areas” so the company’s service centers aren’t overwhelmed.
“If it’s just in the service center, it’s extremely slow and inefficient. So basically we need, like a lot of production lines, to make the switch,” Musk said on the call.
Tesla owners with Hardware 3 cars have spent years asking the company and Musk for a straight answer about whether they could run this advanced version of Full Self-Driving — which, it should be noted, Tesla has yet to launch or prove it can. Tesla sold these cars between 2019 and 2023.
Musk finally faced the reality that Hardware 3 was insufficient to run more advanced versions of Full Self-Driving in January 2025.
“I think the honest answer is we’re going to have to upgrade people’s Hardware 3 PC for those who have bought Full Self-Driving,” he said. “This will be painful and difficult, but we will do it.”
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However, the company’s CFO, Vaibhav Taneja, made a different claim just six months ago, in October 2025, when he said Tesla may still be able to make it work. “We haven’t completely abandoned HW3,” he said at the time.
Tesla said Wednesday that it will still release slightly more advanced versions of its current Full Self-Driving software to owners of Hardware 3. But Musk was adamant that upgrades would be needed for anything more.
“Hardware 3 simply doesn’t have the ability to achieve unattended FSD,” he said.
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