During Tesla’s first quarter 2026 (Q1 2026) earnings call, it finally officially admitted a fact that has long worried early car owners: Hardware 3 (HW3) vehicles will not be able to achieve “Unsupervised Full Self-Driving” (Unsupervised Full Self-Driving). Elon Musk publicly confirmed the news at the financial report meeting on April 22, 2026, and simultaneously announced hardware upgrade plans and trade-in options for HW3 owners.
Tesla confirms HW3 cannot achieve unsupervised full autonomous driving
Prior to this, Tesla CEO Elon Musk and company executives have claimed for years that all vehicles produced after April 2019 will be equipped with hardware sufficient to achieve “full self-driving.” This promise has left many car owners paying anywhere from US$8,000 to US$15,000 (NT$260,000 to NT$490,000) for a “full self-driving” package.
Anyone who purchased full self-driving will get FSD computer upgrade for free. This is the only change between Autopilot HW2.5 & HW3. Going forward “HW3” will just be called FSD Computer, which is accurate. No change to vehicle sensors or wire harness needed. This is v important. https://t.co/lICMpT7xnX
— Elon Musk (@elonmusk) March 29, 2019
However, as the demand for FSD’s AI models increases, the performance gap of HW3 vehicles gradually widens, eventually stopping at the FSD v12.6 version in January 2025 (Musk earlier claimed that it would only be six months later, but in fact it has not been updated for nearly a year and a half), while AI4 vehicles have already been upgraded to v13 and v14 versions.
Anyone who purchased full self-driving will get FSD computer upgrade for free. This is the only change between Autopilot HW2.5 & HW3. Going forward “HW3” will just be called FSD Computer, which is accurate. No change to vehicle sensors or wire harness needed. This is v important. https://t.co/lICMpT7xnX
— Elon Musk (@elonmusk) March 29, 2019
Musk’s announcement marks a major shift for Tesla’s early owners. HW3 owners have long been told that their vehicle’s hardware is sufficient to support “future” fully autonomous driving features, but now these owners must face the fact that the hardware has been officially deemed “inadequate.” The admission is undoubtedly a major blow to Tesla’s credibility.
Why can’t HW3 support unsupervised FSD?
According to Tesla, the computing power and camera resolution of HW3 hardware cannot reach the level to safely operate autonomous driving without human intervention. To achieve “unsupervised” Robotaxi services, vehicles require higher data processing capabilities and clearer environmental awareness, and the design of HW3 has fundamental limitations in both aspects.
Tesla also announced a new AI4+ computer, which has double the memory and stronger computing power. It is speculated that this new hardware is likely to be used to upgrade HW3 vehicles, but mass production is not expected until mid-2027.
Upgrade plan: Transform HW3 to AI4 level
For HW3 owners who have purchased the FSD kit, Tesla has planned a hardware upgrade program to upgrade their vehicles to the AI4 (HW4) standard. This is not a simple computer swap job, but a complete operation:
- Replace car computer: Upgrading from HW3 to AI4 computers
- Update camera system: Replaced with HW4’s high-resolution camera
- rewiring: Due to the need to support higher data transmission bandwidth, the internal wiring of the vehicle must be significantly updated
Since the modification project requires a lot of manpower and involves partial vehicle disassembly, Tesla will not have existing service centers undertake this work. Instead, it will set up dedicated “micro-factories” (Micro-Factories) in major cities to handle the upgrade needs of HW3 vehicles.
Another option: Trade in a new car
For car owners who don’t want their vehicles to undergo such a large-scale modification, Elon Musk also provides another option: Tesla will provide a trade-in discount, allowing HW3 owners to trade in their vehicles for new cars equipped with AI4 hardware. Although Tesla did not disclose the specific discount amount, outside estimates are about US$4,000 to US$6,000 (NT$130,000 to NT$195,000). This number must be lower than the purchase price of the FSD, otherwise it would be more cost-effective for Tesla to simply refund the owner.
The emergence of the trade-in program shows that Tesla is well aware of the expectations of HW3 owners for “fully autonomous driving” over the years. This is a kind of “compensation” to a certain extent, allowing car owners who are unwilling to accept modifications to have a reasonable way out. However, the final amount of the supplement and whether it is worth it still depends on Tesla’s final announcement.
Paid upgrade: also available to non-FSD car owners
Tesla is currently prioritizing HW3 owners who have paid for FSD, but the upgrade program will later be expanded to the entire HW3 fleet. After the initial transformation of FSD owners is completed, Tesla expects to allow HW3 owners (including those who subscribe to FSD) to upgrade for a fee. Taking into account the extensive work required to dismantle the interior, rewire the cables, and install new cameras, the cost is expected to fall between US$3,000 and US$5,000 (NT$98,000 to NT$163,000).
V14 Lite Update: Just in Time for HW3 Owners
The good news is that HW3 owners aren’t completely abandoned until the hardware upgrade is completed. Ashok Elluswamy, director of Tesla’s autonomous driving division, confirmed at the earnings call that HW3 vehicles will receive the FSD V14 Lite update at the end of June 2026, which will bring V14 features currently running on AI4 hardware to HW3 vehicles. This software update is undoubtedly a significant update for HW3 owners who have been stuck on the v12.6 version for more than a year.
However, V14 Lite is still an autonomous driving function that “requires supervision”, and car owners still need to continue to pay attention to road conditions and be ready to take over the vehicle at any time. To achieve “unsupervised” autonomous driving, the timetable is expected to be in the fourth quarter of 2026 or later, and will be gradually expanded and limited to specific regions.
The advent of the Robotaxi era
This decision is closely related to Tesla’s Robotaxi layout. Tesla’s Robotaxi service has been officially launched in Austin, Texas, and is being expanded to Dallas and Houston. It has accumulated zero accident records so far. In order for more vehicles to join the Robotaxi network, it is necessary to ensure that every vehicle in the fleet can meet the “unsupervised autonomous driving” standard. By upgrading from HW3 to AI4, Tesla can significantly increase the size of its eligible fleet and convert its aging fleet into revenue-generating assets.
Elon Musk emphasized during the earnings call that this HW3 upgrade plan is “absolutely critical” to the company’s long-term financial goals. From a business perspective, if the FSD fees paid by HW3 owners over the years can be exchanged for the opportunity to join the Robotaxi network after upgrading, it will not only be an explanation to the owners, but also a key step for Tesla to expand the coverage of Robotaxi services. As for Taiwan, it is currently rumored that Taiwan has not sent any documents to the government, nor has it announced how to update the hardware in the future. We will continue to report any news.
Q1 2026 Earnings Call at 4:30pm CT https://t.co/pkYIaGJ32y
— Tesla (@Tesla) April 22, 2026