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After years of selling vehicles that would one day run Full Self-Driving (FSD) features, Tesla has now confirmed that the hardware isn’t up to the task on millions of cars.
The admission comes from CEO Elon Musk, who explained the situation in the latest Tesla earnings call. It impacts cars sold from 2019 through 2023 that run Tesla's Hardware 3 driver-assistance tech. Each vehicle was sold with the promise that FSD would be compatible at a later date via a software update.
However, Musk now says that "Hardware 3 simply does not have the capability to achieve unsupervised FSD. We did think at one point it would have that, but relative to Hardware 4, it has only an eighth of the memory bandwidth.”
Memory bandwidth is one of the key parts needed for autonomous driving features to work, Musk says. He also explains that older vehicles will need to replace both their computers and their camera systems for FSD features, which will require complex work on every vehicle.
He suggested Tesla would set up a “discounted trade-in for cars that have AI4 hardware.” There’s no further detail yet on how this would work or when to expect an official plan from Tesla.
Given the millions of affected Tesla vehicles, Musk also proposed introducing what he calls “microfactories” in major metropolitan areas to handle the work. "If it’s done at the service center, it’s extremely slow to do so and inefficient. We basically need mini production lines to make the change," he said. “I do think over time it’s going to make sense for us to convert all Hardware 3 cars to Hardware 4, because that’s what enables them to enter the robotaxi fleet and have unsupervised FSD.”
Musk has teased allowing Tesla owners to rent out their EVs, likening it to Airbnb for self-driving cars. (Services like Turo and Getaround do this already, but the cars are not autonomous.) "That's probably next year because we want to just make sure we've ironed out any kinks," Musk said in January 2025, though he's known for not sticking to self-imposed deadlines.
Case in point: Musk confirmed during the earnings call that Tesla would likely again push back its timeline for launching FSD for consumer vehicles. "I’m just guessing here, but probably in the fourth quarter," he said when asked about the feature.
In January, Musk said production of the Model S sedan and Model X SUV would shut down in Q2 as Tesla moves to "a future that is based on autonomy.” The Fremont, California, factory where both models were produced will be used to make its upcoming Optimus robots.