Elon Musk announced on Wednesday that millions of Tesla owners will require hardware upgrades to operate a future version of its Full Self-Driving software that won’t need human supervision, contradicting previous promises made by him and Tesla.
This statement could lead to legal challenges from customers who purchased Teslas under the belief that their cars were just one software update away from autonomous driving.
Musk revealed on Tesla’s quarterly earnings call that vehicles with the third version of Tesla’s driver-assistance system, “Hardware 3,” will need a new computer and cameras. To avoid overwhelming service centers, Tesla is considering establishing “micro-factories” in major cities.
“If it’s done just at the service center, it is extremely slow and inefficient. We essentially need many production lines to implement the change,” Musk explained on the call.
Tesla owners with Hardware 3 have been seeking clarity for years on whether they could use the advanced version of Full Self-Driving. Tesla sold these vehicles between 2019 and 2023.
Musk finally acknowledged in January 2025 that Hardware 3 was inadequate for more advanced Full Self-Driving software.
“Honestly, we will need to upgrade Hardware 3 computers for those who bought Full Self-Driving. It’s a tough and challenging process, but we’ll ensure it gets done,” he mentioned.
However, the company’s CFO Vaibhav Taneja previously claimed in October 2025 that Tesla might still find a way to make it work. “We haven’t entirely given up on HW3,” he stated at that time.
On Wednesday, Tesla announced the release of slightly more advanced versions of the current Full Self-Driving software for Hardware 3 users. However, Musk firmly stated that hardware upgrades are essential for more advanced features.
“Hardware 3 just doesn’t have the ability to achieve unsupervised FSD,” Musk asserted.
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