Tesla still doesn’t have a solid pathway for how to give Hardware 3 cars Full Self-Driving (FSD) capabilities, based on what Elon Musk said during the company’s latest earnings call. The automaker has known for quite a while that its vehicles equipped with Hardware 3 aren’t capable of unsupervised FSD, even though the company built the system specifically to give its cars the ability. Tesla used Hardware 3 on cars manufactured from 2019 until early 2023 before Hardware 4 shipped.
During an earlier earnings call back in January 2025, Musk admitted that the company was “going to have to upgrade people’s Hardware 3 computer for those that have bought Full Self-Driving.” At Tesla’s latest earnings call, Musk said that Hardware 3 “simply does not have the capability to achieve unsupervised FSD.” Tesla thought it would be able to at one point, but Hardware 3 apparently has 1/8th the memory bandwidth of Hardware 4. Musk explained that memory bandwidth is “one of the key elements” needed for unsupervised FSD.
Tesla will be offering to upgrade and replace the computers and cameras on older vehicles, but it doesn’t have a concrete plan in place yet. “I do think over time it’s going to make sense for us to convert all Hardware 3 cars to Hardware 4,” he said. To do so at service centers would be extremely slow, Musk has admitted. Around 4 million cars or so have Hardware 3, though not everyone has paid for FSD. Still, to be able to replace its vehicles’ hardware efficiently, Musk said Tesla is going to have to set up “microfactories or small factories in major metropolitan areas.” He didn’t give any indication that Tesla has already started building those microfactories, though, or even that construction is already scheduled to begin. He did say that in the meantime, the company is going to be releasing FSD version 14 for Hardware 3 around the end of June.
Musk also said during the same earnings call that Tesla’s Fremont factory will start manufacturing the company’s humanoid Optimus robots in late July or August. The Tesla CEO is known for announcing highly optimistic and aggressive timelines. Tesla made the decision to kill off its Model X and S cars earlier this year, so that it can convert its Fremont facility into an Optimus factory. The last Model S and X vehicles will be rolling off the production line in May, which gives the company just a few months to dismantle the facility’s current equipment and put new ones in place.
