After over a decade of promising that fully autonomous driving is right around the corner, Tesla CEO Elon Musk has yet to bring his ambitious vision to fruition.

In early 2019, Tesla started installing a system called Hardware 3 (HW3) in its cars, which according to Musk would enable what the company continues to misleadingly refer to as “Full Self-Driving” (FSD). (As it currently exists, the feature still requires owners to be ready to take over the wheel at any point.)

Over the next four years, Tesla sold millions of vehicles with the hardware, only for Musk to finally admit in January 2025 that HW3 actually wasn’t good enough after all, and that a retrofit would be required to enable fully autonomous driving.

The news came to the dismay of countless owners who shelled out thousands of additional dollars to access FSD, and who claim Musk had lied to them all these years, triggering numerous class action lawsuits.

During Wednesday’s earnings call, the mercurial CEO put it as bluntly as ever.

“Unfortunately, Hardware 3 — I wish it were otherwise — but Hardware 3 simply does not have the capability to achieve unsupervised FSD,” he said, saying that its “memory bandwidth” is the “chokepoint.” Tesla introduced a confusingly-named version of the software, called “FSD (Supervised)” in April 2024, while an “unsupervised” version would seemingly refer to actual, autonomous driving.

Despite Musk first making the concession well over a year ago, Tesla has yet to make good on its promise of providing millions of owners with the necessary hardware upgrade — a process that will be long and painful.

Musk explained during this week’s call that Tesla is now looking into constructing “microfactories” in cities to retrofit HW3 vehicles with a new computer and camera system.

“I do think over time its gonna make sense for us to convert all HW3 cars to HW4, because that’s what enables them to enter the Robotaxi fleet and have unsupervised FSD,” he said.

There are plenty of reasons to question Musk’s promises. For one, the EV maker has known about this issue for many years now, and even its latest plans sound notably vague. While the CEO alluded to a “discounted trade-in” program, he didn’t elaborate any further.

Besides, setting up entire new production lines within “major metropolitan areas” won’t come cheap, as Electrek points out. That doesn’t bode well, with Tesla revealing during its latest quarterly earnings that profitability is as thin as ever, following several years of plummeting revenues.

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