Elon Musk says millions of Tesla cars require upgrades for real Full Self-Driving

Elon Musk said Wednesday that millions of Tesla owners will need hardware upgrades to run a future version of its Full Self-Driving system that does not require human supervision — a major shift from years of earlier assurances that existing vehicles would already be capable of supporting full autonomy through software updates.

The statement raises potential legal exposure for Tesla, as many customers purchased vehicles under the expectation that their cars were close to achieving full self-driving capability without major hardware changes.

Speaking during Tesla's quarterly earnings call, Musk explained that vehicles equipped with the company's third-generation driver assistance system, known as "Hardware 3," will require both a new computer and upgraded cameras. He added that the scale of the upgrade could be so large that Tesla may need to establish "micro-factories" in major metropolitan areas to handle installations more efficiently, reducing pressure on service centres.

"If it's done just at the service centre, it is extremely slow to do so, and inefficient. So we basically need, like many production lines, to make the change," Musk said during the call.

Tesla vehicles featuring Hardware 3 were sold between 2019 and 2023, and owners of these cars have repeatedly sought clarity from the company regarding whether their vehicles would support future versions of Full Self-Driving. Tesla has not yet released a fully autonomous version of the system or demonstrated that it can operate without human oversight.

Musk acknowledged in January 2025 that Hardware 3 would not be sufficient for more advanced Full Self-Driving capabilities.

"I think the honest answer is that we're going to have to upgrade people's Hardware 3 computer for those that have bought Full Self-Driving," he said at the time. "That's going to be painful and difficult, but we'll get it done."

However, Tesla's chief financial officer, Vaibhav Taneja, had offered a more cautious view just months earlier, in October 2025, stating that the company had not completely ruled out making Hardware 3 compatible. “We have not completely given up on HW3,” he said.

On Wednesday, Tesla said it will continue releasing incremental improvements to its current Full Self-Driving software for Hardware 3 vehicles. Still, Musk made it clear that meaningful future advancements will require upgraded systems.

“Hardware 3 "implies that it cannot achieve unsupervised FSD,” he said.