Tesla has still not announced a clear upgrade plan for millions of HW3-equipped vehicles that were promised full self-driving years ago. Elon Musk pointed to next-generation AI hardware as a solution.
Tesla CEO Elon Musk brought up the years-long debate surrounding vehicles equipped with Hardware 3 (HW3) at the company's Q2 2026 financial results meeting. Musk did not give a definitive answer to investors' questions about whether these vehicles would receive a hardware upgrade to run the next-generation Full Self-Driving (FSD) software. This indicates that Tesla still has no clear plan for HW3 vehicles.
When asked if a hardware upgrade was planned for HW3 vehicles, Musk stated that it "would make sense" and "would become financially viable at some point." However, he made no commitment regarding when the upgrade would occur, what hardware would be used, or how Tesla would cover the cost.
Next-Generation Hardware Instead of HW4?
The most striking point in Musk's statements was his reference to a next-generation artificial intelligence computer, still under development, rather than a direct upgrade of HW3 vehicles to the Hardware 4 (AI4) platform.
Musk said the company is working on an improved version of AI4, and production of this hardware could begin in mid-next year. Additionally, he expressed hope that the more powerful AI5 platform would enter mass production next year. However, he stated that AI5 would initially be used in Tesla's humanoid robot, Optimus.
This statement indicates that the solution awaited by HW3 owners depends on hardware that is not yet in production.
Tesla's Long-Debated FSD Promise
Since 2016, Tesla began selling vehicles by stating that all vehicles produced had all the necessary hardware for full autonomous driving, and based on this claim, offered the FSD package to customers, with prices sometimes reaching up to $15,000.
However, Elon Musk later admitted that HW3 hardware was not capable of reaching unsupervised FSD level. According to Musk, HW3's memory bandwidth is only one-eighth that of Hardware 4. Even HW4 or AI4 hardware is not considered sufficient, as it was previously claimed that the Cybercab model featured an advanced AI4 hardware with more RAM.
One of the biggest obstacles facing Tesla is the scale of the hardware upgrade. Industry estimates suggest that the company may need to replace the computers in approximately 4 million vehicles or compensate vehicle owners to fulfill its promises. In this process, the company began offering FSD v14 Lite software with restricted features to HW3 vehicles, instead of the full version.
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