Musk confirms Tesla HW3 chip cannot support unsupervised FSD

Source: Global Market Report

Tesla CEO Elon Musk confirmed on Wednesday that vehicles equipped with Tesla’s Hardware 3 (HW3) chip will not be able to achieve unsupervised Full Self-Driving (FSD).

During Tesla’s Q1 2026 earnings call, Musk confirmed this news and stated that Tesla will offer a “trade-in discount” for vehicles equipped with AI4 chips.

For owners who have already purchased the FSD feature, Tesla will provide an option to trade in for new cars equipped with AI4 hardware (i.e., Hardware4) at a discounted price, and will open up hardware upgrade services, including replacement of the onboard computer and camera systems. “We need to set up micro-factories in major metropolitan areas,” Musk said, adding, “Upgrading all HW3 vehicles to HW4 is the smart thing to do.”

In the earnings call, Tesla also confirmed that a “lite version” of FSD v14 will be offered to HW3 owners.

After the release of this information, Tesla investor and Gerber Kawasaki Wealth Management partner Ross Gerber expressed his disappointment on social media platform X. “This is not a good sign for Tesla owners,” he said, adding that all HW3 owners have been “badly let down” by Tesla. “They’ve sold about 3 million Teslas, of which roughly 285,000 are equipped with FSD (Full Self-Driving),” he said, further noting that the related liability could be “in the billions of dollars.”

It’s worth noting that Gerber had previously called on Tesla to refund customers for missing autonomous driving features. He demanded that if the latest v14.3 FSD system fails to deliver driverless capability, Tesla should refund $10,000 to each affected owner.