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Tesla’s HW3 Dilemma: What Support Awaits HW3 Owners?

Review Report June 6, 2025
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Review Point

  • Tesla admitted that its Hardware 3 (HW3) compute platform cannot deliver on earlier full-self-driving promises, leaving millions of owners without the capability they paid for. Four months on, the company has yet to announce a clear compensation or retrofit program beyond hints at a hardware swap. In the interim, HW3 vehicles continue to receive incremental software updates but lack the full autonomy initially marketed.
  • This summary draws on multiple reports showing no formal plan for HW3 owners (d1: doc14, d2: doc15), mounting owner dissatisfaction (d3: doc7, d4: doc10), and Elon Musk’s own acknowledgment of a ‘painful’ hardware swap (d5: doc25). It also considers the latest FSD software releases that still apply only limited improvements to HW3 (d6: doc8, d7: doc9).

1. The HW3 Promise and Its Fallout

  • Tesla's commitment to full self-driving capabilities for vehicles equipped with its Hardware 3 (HW3) platform has been described as a significant promise, made to millions of customers since its inception in 2016. However, the company's January 2025 acknowledgment that HW3 cannot support the expected full autonomy has left an estimated four million owners in a precarious position. Many paid up to $15, 000 for the Full Self-Driving (FSD) package, banking on Tesla's earlier assurances.

  • The lack of a clear support plan has sparked widespread backlash among HW3 owners. Reports indicate a growing sense of betrayal and frustration, particularly as more than four months have elapsed since the admission without any concrete steps outlined by Tesla. This disappointment is compounded by the current market context, where owners feel that they may be coerced into purchasing new vehicles, as Tesla has not provided retrofitting options for the HW3 hardware.

  • Legally, Tesla faces increasing scrutiny as multiple lawsuits are emerging related to its self-driving claims. Some complainants argue that the promises made at the point of sale were misleading, resulting in potential liabilities amounting to billions in settlements. The implications hint at broader ramifications not only for Tesla's reputation but also for the overall credibility of self-driving technology within the automotive industry.

  • Despite the acknowledgment of HW3's limitations, Tesla continues to roll out incremental software updates aimed at improving the driving experience for existing vehicles, but these updates have consistently failed to deliver on the full autonomous capabilities initially promised. While Tesla maintains that it will upgrade the HW3 systems for some owners, there is no visible plan for implementing this upgrade, adding to the existing uncertainty.

  • The overall sentiment among HW3 owners remains one of dissatisfaction and uncertainty. As the market observes how Tesla resolves this sticking point, the broader electric vehicle industry watches closely, recognizing the potential impacts on consumer trust and future innovations in self-driving technology.

2. Owner Backlash and Legal Pressure

  • The announcement in January 2025 by Elon Musk, confirming that the Hardware 3 (HW3) system would not support full self-driving capabilities, has ignited significant backlash among Tesla owners. Approximately four million vehicles equipped with HW3 are affected, with many owners having invested as much as $15, 000 for the Full Self-Driving (FSD) package. This investment was predicated on the expectation of receiving advanced self-driving features that, as it stands, will not be delivered. Reports indicate a widespread sentiment of betrayal among owners, resulting in numerous complaints and frustrations that are beginning to materialize into legal actions.

  • Tesla's lack of a comprehensive support plan has further exacerbated these grievances. Owner dissatisfaction is evident, not just in informal discussions but also through organized legal actions. At least several lawsuits have already emerged, targeting Tesla over allegations of misleading practices regarding self-driving promises. Key issues raised include accusations that Tesla's marketing misrepresented the capabilities of HW3 and its viability for full autonomy, leading to claims that could translate into billions in liability for the company.

  • The legal landscape continues to evolve as more individuals come forward, representing a collective stance against Tesla's purported failures to deliver on its commitments. In addition to allegations related to self-driving capabilities, there are serious claims regarding the company’s warranty practices and how it manages customer data. The cumulative effect of these lawsuits is not only a source of financial risk for Tesla but also poses a significant threat to the company's reputation, potentially undermining consumer confidence in the broader autonomous vehicle market.

  • As Tesla grapples with these mounting pressures, the company's responses—or lack thereof—have attracted scrutiny. While the firm continues to release incremental software updates in an attempt to address driver conveniences, these updates have not remedied the core complications nor fulfilled the promises tied to the FSD package. Tesla's ongoing silence regarding a well-defined, supportive strategy for HW3 owners leaves many feeling uncertain about their future with the brand, and whether further investment into new hardware or vehicles is warranted.

  • Ultimately, the growing discontent among HW3 owners raises critical questions about Tesla's commitment to its consumer base. The fallout may extend beyond individual grievances and lawsuits, setting a precedent in how electric vehicle manufacturers deal with promises made in the rapidly evolving landscape of autonomous driving technology. Hence, the resolution of these issues is closely watched, as they may influence brand loyalty and future innovations within the entire industry.

3. Tesla’s Official Response (Or Lack Thereof)

  • Tesla's public statements regarding the fate of Hardware 3 (HW3) owners have been scarce and vague, creating a climate of uncertainty for an estimated four million affected vehicle owners. Following Elon Musk's admission in January 2025 that HW3 will not support the promised full self-driving capabilities, he described the required hardware upgrade to HW4 as 'painful and difficult.' This acknowledgment has led to increasing frustration among customers who invested heavily in the Full Self-Driving (FSD) package, with some paying as much as $15, 000 based on Tesla's prior assurances of future software upgrades delivering autonomy.

  • Despite the significant commitment, Tesla has yet to outline a definitive plan to address the HW3 situation, leaving many wondering if they may need to buy new vehicles to access the self-driving technology they anticipated. Reports indicate that customer dissatisfaction has mounted to the point where several lawsuits are currently in progress, claiming that Tesla misled consumers about the self-driving capability of their vehicles. The financial implications for Musk's company are considerable, with potential liabilities in the billions due to these allegations and the lack of a clear resolution.

  • In the wake of these issues, Tesla has continued to issue incremental software updates for HW3 vehicles. However, these updates have provided limited improvements and have not restored the promised full self-driving functionality. The absence of a comprehensive upgrade plan raises questions about the firm’s long-term strategy toward its HW3 customers and the implications for future investments in Tesla technology. As other companies like Waymo advance in the self-driving domain, Tesla's position and reputation may be put to the test.

  • Overall, the situation highlights a critical juncture for Tesla. The lack of decisive action to support HW3 owners not only jeopardizes customer loyalty but also presents a formidable challenge as they navigate legal repercussions and an increasingly competitive electric vehicle market. Stakeholders are closely monitoring Tesla's next steps, as how they handle this situation could set important precedents for industry practices regarding customer commitments in the evolving landscape of autonomous vehicle technology.

4. Interim Software Updates for HW3 Vehicles

  • Tesla has been actively rolling out incremental software updates for its Hardware 3 (HW3) vehicles, attempting to enhance the driving experience for owners despite the acknowledged limitations in supporting full self-driving capabilities. Significant updates in recent months include FSD v12.6.1 and FSD v12.6.4, which targeted improvements in lane-changing behavior and integrated new features like speed profile options, designed to personalize driving experiences based on user preferences. However, these updates have continually underscored the reality that they do not fulfill the promises associated with the full autonomy that many owners anticipated when they purchased the Full Self-Driving (FSD) package.

  • In March 2025, Tesla released FSD v13.2.8 specifically designed for HW4 vehicles. While its deployment marks notable advancements such as improved camera visibility detection and third-party charging interactions, these enhancements remain unavailable for HW3 owners, igniting frustration and a sense of exclusion among this user base. Comparatively, the widespread application of the FSD v12.14.6 update has been observed to improve various functionalities, but benchmarks suggest that HW3 models continue to lag in performance against their HW4 counterparts.

  • Moreover, the introduction of features like 'Dynamic Routing Around Road Closures' and 'Optimized Speed Profiles' indicates Tesla’s commitment to refining its software capabilities. Yet, these features do little to alleviate the core issue facing HW3 owners: the glaring absence of full self-driving capabilities. A Twitter statement by Elon Musk indicates that HW4 models are now capable of performing previously marketed functionalities, leaving HW3 owners feeling as though they are receiving residual benefits from a technology they hoped would offer more substantial returns.

  • Despite these incremental updates, the response from HW3 owners has not been positive. Many feel their vehicles are now effectively obsolete in terms of the self-driving features that were originally promised. Reports of device calibration issues further complicate the user experience, particularly with older models, as Tesla attempts to manage the delicate balance between existing customer satisfaction and new hardware rollouts. Ultimately, while these software updates may have improved some aspects of driving comfort and utility, they have consistently highlighted the unmet expectations regarding full autonomy on the HW3 platform.

  • As we look towards the future, the implications of these updates suggest a troubling precedent not just for Tesla, but for the entire electric vehicle industry. The market is watching closely as other manufacturers advance their autonomous technologies, and how Tesla chooses to navigate these interim deliveries could ultimately shape consumer confidence and loyalty in the years to come.

5. Possible Upgrade Paths and Industry Implications

  • In light of Tesla's recent challenges with Hardware 3 (HW3), a critical aspect that remains uncertain is the potential upgrade paths for the millions of owners affected by the inability of HW3 to support full self-driving capabilities. With over four million cars expected to require hardware upgrades to achieve the originally promised functionality, Tesla's approach to rectifying this situation could involve both significant costs and strategic implications for the broader electric vehicle (EV) market.

  • Reports indicate that the transition from HW3 to Hardware 4 (HW4), which is deemed necessary for full autonomy, may not only involve logistics but also substantial financial implications for Tesla. Given the estimated number of vehicles impacted, Electrek suggests potential retrofit costs could reach into the hundreds of millions of dollars, a scenario Musk has described as 'non-trivial.' This presents a complex financial challenge for Tesla, especially amid a backdrop of slowing sales and heightened competition.

  • While Tesla has indicated it plans to provide upgrades to eligible vehicles free of charge, the absence of a clear timeline or detailed guidance on how this process will unfold raises ongoing concern among HW3 owners. Many invested heavily in the Full Self-Driving (FSD) package expecting significant advancements in technology, and the lack of clarity on retrofitting options has left them feeling uncertain about Tesla's commitment to their needs. Therefore, the potential for dissatisfaction continues to escalate, particularly as competitors like Waymo advance their offerings with fully operational driverless systems.

  • As we look towards the future, Tesla’s handling of these upgrade pathways could set critical precedents for the EV industry. The approach taken here may influence how other manufacturers navigate customer commitments regarding autonomous technology. A lack of transparency and uncertainty could lead to increased scrutiny, not only affecting Tesla's reputation but also the consumer trust in self-driving vehicles as a whole. The way Tesla addresses these hardware limitations will, therefore, be pivotal in shaping the industry's future landscape and customer expectations.

  • Overall, the transition from HW3 to HW4 represents a crucial juncture for Tesla. Its resolution will not only affect the company's standing with its current customer base but also echo throughout the autonomous vehicle industry, impacting future innovations and the approach manufacturers take towards promised technologies.

Key Takeaways

  • Unfulfilled HW3 Promises

  • Tesla's third-generation Hardware 3 (HW3) was marketed as capable of full autonomy, but a recent admission reveals it can't deliver on these promises, leaving many owners frustrated and feeling misled.

  • Growing Legal Concerns

  • With numerous lawsuits surfacing due to Tesla's self-driving claims, the company faces serious legal scrutiny that could result in substantial financial liability and damage its reputation in the automotive market.

  • Incremental Updates Fall Short

  • Although Tesla continues to issue incremental software updates aimed at improving driver experience, these updates are insufficient and do not restore the anticipated full self-driving features that HW3 owners initially expected.

  • Potential Hardware Upgrades Looming

  • Tesla’s vague plans about potential hardware swaps from HW3 to the newer HW4 raise concerns over costs and timelines, leaving owners uncertain about their options for regaining promised self-driving capabilities.

  • Industry Implications of Tesla's Approach

  • The way Tesla handles HW3 issues is being closely monitored, as it may set critical precedents for how the entire electric vehicle industry approaches customer commitments regarding autonomous technologies.

Glossary

  • 🔍 HW3: HW3 refers to Tesla's third-generation hardware platform designed to support self-driving capabilities in their vehicles. Unfortunately, it has been revealed that HW3 cannot deliver on the full self-driving promises made by Tesla.

  • 🔍 Full Self-Driving (FSD): Full Self-Driving (FSD) is a premium package that Tesla sells, which was intended to give vehicles the ability to drive themselves autonomously. However, many features promised under this package for HW3 owners have not materialized.

  • 🔍 Incremental Software Updates: Incremental software updates are small, gradual improvements made to a device’s software. For HW3 vehicles, these updates aim to enhance driving behavior but do not fulfill the original promise of full self-driving capabilities.

  • 🔍 Retrofit: A retrofit is the process of adding new technology or features to existing equipment. In this context, it refers to upgrading HW3 vehicles to support newer self-driving capabilities.

  • 🔍 Legal Scrutiny: Legal scrutiny refers to close examination and investigation of a company’s actions, often arising from lawsuits or consumer complaints. Tesla faces legal scrutiny regarding its marketing and promises related to HW3.

  • 🔍 Autonomous Vehicles: Autonomous vehicles are cars or trucks that can travel without human input. They use a combination of sensors and software to drive themselves, something Tesla aims to achieve with their FSD package.

  • 🔍 Hardware Swap: A hardware swap is a proposed option where existing hardware, like HW3, would be replaced with newer technology, such as HW4, to regain lost capabilities. This process can be complex and costly.

Source Documents