During Tesla Inc.'s TSLA third-quarter earnings call, CEO Elon Musk revealed that if Hardware 3 is not capable of unsupervised full self-driving (FSD), the EV giant will offer free upgrades to HW4 to customers who have vehicles running the older hardware.
What Happened: Musk explained that while the HW4 hardware is significantly more advanced, HW3 might not meet the safety standards required for unsupervised full self-driving (FSD). This is the first time Musk has publicly recognized the potential limitations of HW3 in achieving FSD.
"We are not 100% sure. HW4 has several times the capability of HW3," said Musk.
"It's easier to get things to work on HW4 and it takes a lot of efforts to squeeze that into HW3."
At that point, it just might be more feasible for Tesla to simply upgrade vehicles running on HW3 to HW4.
HW3 and HW4 refer to the computer systems that run Tesla's cars. From processing capabilities to cameras, HW4 offers a leap of 3x to 5x in performance compared to HW3.
Tesla is currently using both neural network nodes on HW3, originally meant for redundancy, making it difficult to achieve the promised level 4-5 autonomy. Musk assured that if HW3 cannot deliver FSD, Tesla will offer a free upgrade to customers who purchased HW3 FSD.
"If that turns out to be the case, we will upgrade those who bought HW3 FSD for free. And we have designed the system to be upgradable."
Why It Matters: The revelation of HW3’s limitations comes after Musk’s previous recommendation of HW3 over HW4 due to delays in FSD software for the latter. In August 2023, Musk mentioned that FSD on HW4 would lag behind HW3 by at least six months, focusing on making HW3 work "super well" internationally.
Earlier in March 2023, Tesla began delivering vehicles with HW4 hardware, featuring a more powerful computer board and updated cameras. However, key features were not yet operational.
In September, Tesla rebranded its FSD package to “Full Self-Driving (Supervised),” indicating a shift towards supervised driving with minimal driver intervention.
Price Action: Tesla stock soared over 12% in after-hours trading on Wednesday, rising to $239.50, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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