Elon Musk Confirms HW3 Self-Driving Computers Must Be Replaced—Retrofit Limited to FSD Buyers

Tesla CEO Elon Musk has officially acknowledged that the company must replace the HW3 self-driving computer in its vehicles to meet the promised Full Self-Driving (FSD) capabilities—confirming a significant limitation in millions of Teslas produced since 2019.

After years of assurances that HW3-equipped vehicles would eventually achieve autonomous driving through software updates, Musk admitted in January 2025 that the hardware is fundamentally inadequate for unsupervised operation. Now, he has gone a step further, stating unequivocally that all HW3 computers in vehicles with the purchased FSD package will need to be replaced.

“The truth is that we will need to replace all HW3 computers in vehicles where FSD was purchased,” Musk said during a recent company update, characterizing the process as “painful” and logistically difficult.

No detailed plan or timeline for the mass retrofit has been released.

A Long-Awaited Admission

Tesla introduced the HW3 computer in 2019, positioning it as the backbone of its Full Self-Driving strategy. Despite early doubts from industry analysts and customers, Tesla continued to claim that all vehicles produced since 2016 were equipped with “the hardware necessary for full self-driving.”

That claim began to unravel in late 2023, when performance limitations became increasingly evident. While Tesla began installing the more advanced HW4 computer in 2023, Musk continued to reassure HW3 owners that the system would eventually be sufficient. In October 2024, he conceded there was “some chance” HW3 might not achieve unsupervised autonomy.

That uncertainty is now resolved—HW3 will not support Level 4 or 5 self-driving, and Tesla will move forward with replacements for those who paid for the feature.

Legal and Technical Challenges Loom

The commitment to replace computers is currently limited to customers who purchased the FSD package—an option that has cost up to $15,000. Yet this narrow scope could prove problematic, as Tesla’s public claims dating back to 2016 suggested that all customers, not just FSD buyers, were receiving cars ready for autonomy.

This messaging already contributed to at least one legal loss for Tesla. In 2022, a judge ruled in favor of an owner with a HW2.5 vehicle who wanted to subscribe to FSD. Tesla had attempted to charge for a necessary computer upgrade, despite having claimed the car was self-driving ready. The court sided with the plaintiff and ordered Tesla to retrofit the vehicle at no additional cost.

With nearly 4 million HW3-equipped Teslas on the road, the company could face widespread legal exposure under similar claims, unless a broader retrofit or compensation policy is adopted.

Technical Complexity Raises Further Questions

Adding to the complexity, the HW4 computer—Tesla’s current self-driving platform—is not backwards-compatible with HW3-era vehicles. This means Tesla cannot simply install the newer system in older models; it must instead design a new retrofit solution specifically for HW3 platforms.

Further complicating matters, many HW3 vehicles also rely on lower-resolution cameras, which limit visual recognition capabilities. Even with a new computer, those vehicles may still fall short of FSD performance offered by newer hardware configurations.

“The older cars have lower-res cameras,” one Tesla owner noted. “Even with a computer swap, the system would still be constrained by the image quality, especially when reading LED signs or navigating complex traffic environments.”

Safety concerns are also emerging around hardware reliability. Reports of HW4 board failures underscore the risks associated with relying on single-point computing architectures for autonomous functions. Critics argue that such vulnerabilities further undermine the feasibility of achieving true full autonomy in older vehicles, even with retrofits.

What’s Next?

So far, Tesla has offered no public roadmap for the HW3 retrofits. The scope of the replacements—expected to involve hundreds of thousands of vehicles—poses a serious strain on the company’s already overburdened service infrastructure. The financial cost could exceed $500 million, and legal pressure may force Tesla to extend retrofits or offer compensation to a broader base of affected owners.

In the absence of a proactive response, legal action may again set the precedent. Several class-action lawsuits are already underway, and Musk’s latest admission could strengthen the case for millions of HW3 vehicle owners who feel misled by Tesla’s early self-driving promises.