Tesla CEO Elon Musk has admitted that millions of Tesla owners will need hardware upgrades to run a future version of the company’s Full Self-Driving software that works without human supervision.
Speaking during Tesla’s quarterly earnings call, Musk said vehicles equipped with Tesla’s third-generation driver-assistance system, known as Hardware 3, will require a new computer and upgraded cameras. He said the replacement process could be so large that Tesla may build “micro-factories” in major cities to handle installations faster and avoid overwhelming service centers.
Musk said relying only on service centers would make the process too slow and inefficient, adding that Tesla would need multiple production-line style operations to complete the upgrades.
The statement is significant because Tesla and Musk spent years suggesting many existing vehicles were only a software update away from becoming fully self-driving. Tesla sold Hardware 3 vehicles between 2019 and 2023.
Owners of those cars have long questioned whether their vehicles would support more advanced versions of Full Self-Driving. Musk first acknowledged in January 2025 that Hardware 3 was not powerful enough for unsupervised driving.
At the time, Musk said Tesla would need to upgrade the computers of customers who purchased Full Self-Driving, describing the process as painful and difficult.
Tesla’s latest comments also appear to differ from remarks made in October 2025 by chief financial officer Vaibhav Taneja, who said the company had not completely given up on Hardware 3.
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Tesla confirmed it will continue releasing slightly improved versions of its current Full Self-Driving software for Hardware 3 vehicles. However, Musk was clear that the platform does not have enough capability to achieve unsupervised Full Self-Driving.
