Tesla finds itself in hot water following false claims about self-driving capabilities made back in 2016. The electric vehicle giant might face its costliest recall ever, potentially needing to replace self-driving computers in approximately 4 million vehicles across the globe.
Back in 2016, Tesla boldly claimed that all vehicles manufactured from that point forward would come equipped with “all necessary hardware for full self-driving capability.” This statement has now come back to haunt them in a big way.
The evolution of Tesla’s self-driving hardware
The meaning of “full self-driving” in Tesla’s marketing language has shifted over the years. Initially, the CEO promised that Tesla owners would eventually receive a software update transforming their cars into “robotaxis” capable of Level 4 or 5 autonomous driving — vehicles that could drive themselves without supervision or even without passengers inside.
Almost a decade later, that promise remains unfulfilled, and the claim that these vehicles had “all necessary hardware for full self-driving” has proven false.
In 2016, Tesla was building cars with what they called HW2.5 (Hardware 2.5) self-driving computers. Later, they began producing new vehicles with the upgraded HW3 computer, tacitly acknowledging that HW2.5 wasn’t powerful enough to achieve full autonomous driving. The company started installing HW3 for free in vehicles with HW2.5, but only for customers who had purchased the Full Self-Driving (FSD) package.
During 2023-2024, Tesla moved to an even more powerful computer, HW4, in its newest vehicles. Unlike the transition from HW2.5 to HW3, this time Tesla claimed it could deliver full self-driving capability on vehicles with the HW3 system.
The broken promise
The CEO himself stated that FSD would actually work better initially on HW3 because “our priority is to make FSD work flawlessly on HW3 globally.” He even claimed that FSD performance on HW4 would lag by at least 6 months. These statements quickly proved incorrect.
By early 2024, reports emerged that HW3 had reached its limitations, while capabilities remained far from the promised fully autonomous driving without supervision. In January 2025, the CEO finally admitted that HW3 computers aren’t powerful enough to support fully autonomous driving.
There are roughly 4 million Tesla vehicles with HW3 worldwide. The CEO has stated he will upgrade the computer for all HW3 owners who purchased the FSD package:
“The honest answer is that we’ll need to upgrade the Hardware 3 computer for those who bought full self-driving. It’s a difficult and painful process, but we’ll do it. Now, in a way, I’m glad not that many people bought the FSD package.”
The financial impact
Tesla hasn’t officially disclosed the FSD package adoption rate, but they reported 400,000 FSD beta testers in North America by the end of 2022. Globally, it’s estimated there are at least another 100,000 HW3 Teslas with the FSD package, meaning at least 500,000 vehicles need upgrading.
Replacing computers in over 500,000 vehicles will significantly strain the company’s service operations, with costs expected to exceed $500 million.
This could be just the beginning
The CEO and Tesla didn’t promise “all necessary hardware for full self-driving” only to those who bought the FSD package, but to all Tesla buyers whose vehicles were manufactured from 2016 onward.
Therefore, there’s a strong case that Tesla should replace computers in all vehicles built since 2016 — or at least compensate owners for the false claim that they had “all necessary hardware for autonomous driving.”
Legal precedent already exists. In 2022, a judge ordered Tesla to upgrade a customer’s computer for free so they could subscribe to FSD without additional charges. This created a precedent for Tesla owners who hadn’t purchased the FSD package.
“Buying a car believing it will support full self-driving, and then being told you need to pay extra for a new computer, is called misleading advertising,” note multiple industry reports.
What do you think about Tesla’s handling of their self-driving promises? Have you been affected by these hardware limitations in your own Tesla? The coming months will reveal whether this becomes a full-blown crisis for the electric vehicle manufacturer or just another bump in the road.
(As someone who’s followed the autonomous driving space for years, I’m not entirely surprised by this development — the gap between self-driving promises and reality has always been wider than most companies admit!)
