Elon Musk said Wednesday that millions of Tesla owners will need hardware upgrades to run a future version of its Full Self-Driving (FSD) software that does not require human supervision, reversing years of assurances that existing vehicles would be capable of supporting it.

The admission could expose Tesla to legal challenges from customers who purchased vehicles on the expectation that they were only a software update away from achieving full autonomous driving capability, News.Az reports, citing TechCrunch.

Musk made the remarks during Tesla’s quarterly earnings call, stating that vehicles equipped with the company’s third-generation driver-assistance system, known as “Hardware 3,” will require both a new computer and new cameras to support the more advanced software.

He added that the scale of the upgrades could be so large that Tesla is considering building “micro-factories” in “major metropolitan areas” to prevent service centers from being overwhelmed.

“If it’s done just at the service center, 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.

Owners of Hardware 3 vehicles, sold between 2019 and 2023, have spent years pressing Tesla and Musk for clarity on whether their cars would support the next generation of Full Self-Driving technology. Tesla has yet to release or demonstrate a fully unsupervised version of the system.

Musk acknowledged in January 2025 that Hardware 3 would not be sufficient for 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 chief financial officer Vaibhav Taneja had struck a more optimistic tone just six months earlier, saying in October 2025 that the company had not completely ruled out making the system work on existing hardware.

“We have not completely given up on HW3,” he said at the time.

On Wednesday, Tesla said it will still release incremental improvements of its current Full Self-Driving software for Hardware 3 owners, but Musk made clear that major upgrades will not be possible without new hardware.

“Hardware 3 simply does not have the capability to achieve unsupervised FSD,” he said.

News.Az 

By Nijat Babayev