Tesla (TSLA) has to replace computer in ~4 million cars or compensate their owners
Tesla (TSLA) has to replace the ‘self-driving’ computer inside about 4 million vehicles or likely compensate the owners of those vehicles.
The liability could be more significant than the largest automotive recall in terms of cost.
In 2016, Tesla claimed that all its vehicles in production going forward have “all the hardware necessary for full self-driving capability.”
Tesla’s use of the term “full self-driving” has changed over the years, but at the time and for years later, CEO Elon Musk claimed that it would mean Tesla owners would eventually receive a software update that would turn their vehicles into “robotaxis” capable of level-4-5 self-driving, which means unsupervised autonomous driving even with no one in the cars.
Almost 10 years later, this has yet to happen and won’t happen soon in most of the cars Tesla has delivered over the last decade.
Tesla’s claim that its vehicles have “all the hardware necessary for full self-driving capability” quickly proved untrue.
At the time, Tesla was producing its vehicles with cameras, a front-facing radar, ultrasonic sensors, and a “self-driving” computer, called HW2.5.”
Tesla quickly started building new vehicles with a new “HW3 self-driving computer” and admitted that its HW2.5 computer was not powerful enough to achieve self-driving capability.
The automaker started retrofitting existing HW2.5 vehicles for free with new HW3 computers owned by drivers who bought Tesla’s ‘Full Self-Driving’ (FSD) software package.
In 2023-2024, Tesla transitioned to another new and more powerful “self-driving computer”, HW4, in its new vehicles.
Unlike when it transitioned from HW2.5 to HW3, this time, Tesla claimed it would still be able to deliver its robotaxi self-driving capability to HW3 vehicles.
Musk even claimed that FSD will get better on HW3 first, as Tesla’s “focus needs to be on getting FSD on HW3 working super well and provided internationally”. He went as far as claiming that FSD performance on “HW4 will lag at least 6 months behind HW3” because of this.
That didn’t last long.
In 2024, we started to report that Tesla was reaching the limits of the HW3 computer, while the capabilities were nowhere near the promised unsupervised robotaxi-level autonomous driving.
It took another 6 months, but in January 2025, Musk finally admitted that HW3 computers are not powerful enough to achieve unsupervised self-driving capability.
There are about 4 million Tesla vehicles in the world with HW3 computers:
| Hardware Version | Production Timeframe | Estimated Vehicles Produced (Global) | Rollout & Overlap |
|---|---|---|---|
| HW3 (FSD Computer) | Apr 2019 – Late 2023 (phased out) | ~4 million (approx.) | Standard in all models from 2019–2022; remained in some cars through 2023. Overlap with HW4 during 2023. |
| HW4 (FSD Computer) | Jan 2023 – Present (ongoing) | ~2.5–3 million (approx.) | Introduced Jan 2023 (S/X first); became standard across all models by early 2024. Overlapped with HW3 in 2023. |
When admitting the computer won’t support the promised self-driving capabilities, Musk said that Tesla would retrofit the computers of all HW3 car owners who purchased the FSD package:
I mean, I think the honest answer is that we’re going to have to upgrade people’s Hardware 3 computer for those that have bought full self-driving, and that is the honest answer and that’s going to be painful and difficult but we’ll get it done. Now I’m kind of glad that not that many people bought the FSD package.
Musk says that replacing all the computers will be “painful,” and he is “glad” that “not that many people bought the FSD package.”
Tesla never disclosed the official take rate of its Full Self-Driving (FSD) package, but it did disclose having 400,000 FSD beta testers in North America by the end of 2022.
The take-rate is believed to be much lower globally due to the limited value in other markets where Tesla offers fewer ADAS features under the FSD package.
Globally, it’s safe to assume at least another 100,000 HW3 vehicles with the FSD package, which should bring Tesla’s retrofit requirement to over half a million units.
Musk is right to say that replacing the computers in over 500,000 Tesla vehicles will be “painful.” It will strain its service capacity tremendously, on top of the cost, which will easily surpass $500 million.
But that might just be the beginning.
Tesla promised self-driving hardware in all cars
Musk and Tesla not only made promises to those who bought the FSD package, but they promised anyone buying Tesla vehicles since 2016 had “all the hardware necessary for full self-driving capability.”
As we previously reported, Tesla removed the claim from its website last year and changed the language around the FSD package, which was likely aimed at weakening claims for Tesla HW4 owners, but the case for HW3 owners is more straightforward.
In 2019, Musk claimed “Tesla vehicles are now appreciating assets” because of their future self-driving capabilities. Of course, this proved to be completely wrong.
But there’s one thing that’s true about the value of Tesla vehicles: they would be worth more if they had computers capable of supporting self-driving, which Musk just admitted is not the case. That’s regardless of whether they bought the FSD package or not.
Therefore, there’s a strong argument to be made that Tesla needs to replace computers in all HW3 cars or at the very least, compensate the owners for falsely claiming that the vehicles had “all the hardware necessary for self-driving.”
In fact, there’s already legal precedent for this.
In 2022, a judge ordered Tesla to upgrade a customer’s self-driving computer for free so that they can subscribe to Tesla’s Full Self-Driving program without any additional cost. It created a precedent for Tesla owners who don’t purchase the FSD package.
Based on Tesla’s statement that “all cars produced since 2016 have the hardware necessary for full self-driving capability,” the owners of those vehicles need to have all the hardware necessary to have access to these features.
It’s a clear case of false advertising. Tesla says, “Your car has all the hardware necessary for full self-driving,” and when an owner wants to try the features, Tesla tells them, “You have to pay $1,000 for us to upgrade your hardware.” Something doesn’t add up.
Electrek’s Take
I would be surprised if Tesla does as Musk claimed and replaces HW3 computers in any car, let alone over half a million cars, or as it should be, about 4 million vehicles.
It’s too complicated and costly. It would add hundreds of thousands of work hours to Tesla’s already ultra-busy service operations, and it may not even work.
After being wrong about HW2.5 and HW3, the level of confidence in Tesla achieving unsupervised self-driving on HW4 vehicles is not really high, despite HW4 vehicles not only having more powerful computers but also better cameras.
I don’t think it’s realistic to believe that Tesla will enable level 4 or 5 self-driving capabilities in what are, in some cases, almost 10-year-old vehicles through a computer retrofit.
My 2018 Model 3 Performance was originally a HW 2.5 vehicle, and I purchased the FSD package. Tesla upgraded my computer to HW3 in 2019. We are now in 2025, and Musk finally admitted that the computer I bought 6 years ago won’t enable the self-driving capacity I was promised.
My car will never be self-driving, and I don’t believe Tesla will ever offer a free computer upgrade.
I think Tesla will have to compensate every Tesla HW3 owner worldwide. That would mean about 4 million vehicles and a liability of several billion dollars.
At first, instead of the computer retrofit, I think Tesla will use this as an opportunity to encourage people to upgrade, like it did with the “FSD transfer windows.” Maybe it will offer buybacks at a higher rate to compensate owners.
As for those who didn’t buy the FSD package, I don’t think Tesla will offer anything based on Musk’s messaging. It will have to go through the courts.
There are already several lawsuits filed against Tesla over its self-driving claims, and that was before Musk’s admission that HW3 won’t support unsupervised self-driving. I believe that those lawsuits will ramp up this year.
FTC: We use income earning auto affiliate links. More.
Employees stand inside a supermarket without lights in Burgos on April 28, 2025, during a massive power cut affecting the entire Iberian peninsula and the south of France.
Cesar Manso | Afp | Getty Images
A catastrophic power outage affecting much of Spain, Portugal and the south of France has thrust the role of renewables and energy security into the spotlight.
An abrupt and widespread blackout, one of Europe’s worst in living memory, affected the entire Iberian Peninsula on April 28.
The outage, which lasted for several hours, plunged much of the region into darkness, stranded thousands of train passengers and left millions without phone or internet coverage or access to cash from ATMs.
Spanish authorities have since launched several investigations to determine the root cause of the incident, including a probe into whether a cyberattack could be to blame.
Alongside Spanish opposition parties, some external observers have flagged renewables and net-zero emissions targets as possible reasons for the outage, particularly given Spain and Portugal both rely on high levels of wind and solar for their electricity grid.
“It’s very sad to see what’s happened to Portugal and Spain and so many people there, but you know, when you hitch your wagon to the weather, it’s just a risky endeavor,” U.S. Energy Secretary Chris Wright told CNBC’s “Power Lunch” on April 28.
Spanish Prime Minister Pedro Sanchez and the country’s grid operator Red Electrica de Espana (REE) have both said record levels of renewable energy were not at fault for the blackout.
People queue at a bus stop at Cibeles Square in downtown Madrid as subway and trains are totally out of service due to a massive power outage in Spain, on April 28, 2025.
Thomas Coex | Afp | Getty Images
European Union energy chief Dan Jorgensen, meanwhile, said that there was “nothing unusual” about the sources of energy supplying electricity to the system at the time of the outage.
“So, the causes of the blackout cannot be reduced to a specific source of energy, for instance renewables,” he added.
‘Europe needs more energy’
European energy technology companies called for observers to refrain from drawing their own conclusions in the absence of a formal explanation from authorities.
Henrik Andersen, CEO of Danish wind turbine manufacturer Vestas, said he’d encourage “a degree of statesmanship” over the blackout, particularly as Spanish policymakers continue to investigate.
“First of all, energy security means that you can run societies without having blackouts. That’s stating the obvious,” Andersen told CNBC’s “Squawk Box Europe” on Tuesday.
“Everyone is grasping quick root causes and blaming each other, and I simply just don’t want to go there because until we know the root cause of why grids can fail across Spain and Portugal, let’s not second guess or try to blame someone at cybersecurity or blame individual energy sources,” he added.
“Europe needs more energy — and we probably also need a stronger grid. That goes without saying,” Andersen said.
Siemens Energy CEO Christian Bruch, meanwhile, said the German energy tech group was holding talks with the relevant transmission and utility operators following the blackout.
“What you do see is that when you build an energy system, you need to think about the generation, like solar, wind, gas, whatever, but you also need to think about how the overall system on the grid side [is[ operating and how you stabilize that,” Bruch told CNBC on Thursday.
Solar panels on the Seat Cupra SA plant in Martorell, Spain, on Thursday, March 13, 2025.
Bloomberg | Bloomberg | Getty Images
“This is sometimes underestimated in its complexity, and this is why products from us for grid stabilizations are in demand at the moment to balance these things out,” he continued.
“It’s possible to solve it but it will require investments and it’s not easy. It’s not just a couple of solar cells and some batteries. It’s a little bit more complex than this,” Bruch said.
‘Cash suddenly becomes really important’
For those on the ground at the time of the outage, the lack of power underlined the challenges of a digital society.
“Cash suddenly becomes really important,” Roseanna, a resident of the southern Spanish city of Málaga, told CNBC. She said she only had 40 euros ($45.16) available when the power cut just after midday.
“Obviously you can’t get money out and you can’t pay with card, so it’s certainly important to have a little bit of cash in your pocket at all times,” she continued.
“We’ve gone all digital but the system’s ruined if there’s no electricity,” Roseanna said.
— CNBC’s Karen Gilchrist contributed to this report.
Lease deals get all the hype, but most people still want to own the car after they’re done making all those payments on it. If that sounds like you, and you’ve been waiting for the interest rates on auto loans to drop, you’re in luck: there are a bunch of great plug-in cars you can buy with 0% financing in May, 2025!
As I was putting this list together, I realized there were plenty of ways for me to present this information. “Best EVs ..?” Too opinion based. “Cheapest EVs ..?” Too much research. “Best deal ..?” Too opinion based. In the end, I went with alphabetical order, by make. And, as for which deals are new this month? You’re just gonna have to check the list. Enjoy!
Acura ZDX
New for 2024, Acura ZDX uses a GM Ultium battery and drive motors, but the styling, interior, and infotainment software are all Honda. That means you’ll get a solidly-built EV with GM levels of parts support and Honda levels of fit, finish, and quality control. All that plus Apple CarPlay and (through June 2nd) 0% financing for up to 72 months makes the ZDX one the best sporty crossover values in the business.
All the electric Chevrolet models
Chevrolet is offering 0% financing for up to 60 months on all three of its Ultium-based EVs – and they’re all winners. The Silverado can be spec’ed up to a 10,500 lb. GVWR, making it capable enough to tow whatever horse, boat, or RV you put behind it.
On the crossover side, both the Chevy Blazer EV and Equinox EV each offer their own takes on the five-passenger family SUV, with the cost of base model Equinox LT FWD models with 319 miles of EPA-rated range dropping to just $27,500 after you apply the $7,500 Federal tax credit (which, for now, is still a thing).
Dodge Charger
As Stellantis flip-flops its way towards some kind of electrified future, Dodge is hoping that at least a few muscle car enthusiasts with extra cash will find their way to a Dodge store and ask for the meanest, loudest, tire-shreddingest thing on the lot without caring too much about what’s under the hood.
For them, Dodge has the new electric Charger. And if you still owed money on the Hemi you just totaled, Dodge will help get the deal done on its latest retro-tastic ride with a $3,000 rebate plus 0% financing for up to 72 months!
GMC Hummer EV
The biggest Ultium-based EVs from GM’s commercial truck brand are seriously impressive machines, with shockingly quick acceleration and on-road handling that seems to defy the laws of physics once you understand that these are, essentially, medium-duty trucks. This month, GMC is doing its best to move out its existing inventory of 2024s and ’25s so if you’re a fan of heavy metal you’ll definitely want to stop by your local GMC dealer and give the Hummer EV a test drive.
Honda Prologue
The Honda Prologue was one of the top-selling electric crossovers last year, combining GM’s excellent Ultium platform with Honda sensibilities and Apple CarPlay to create a winning combination. Even so, there’s still some remaining 2024 inventory out there. To make room for the 2025 models, Honda is offering 0% APR for up to 72 months on the remaining 2024s.
Hyundai IONIQ 6
From some angles, the Porsche influences in the Hyundai IONIQ 6′ design are obvious – but not so much so that it seems like a copy of anything. It’s aerodynamically efficient, comfortable, quick, offers up to 361 miles of range, can charge just about anywhere, and now through June 2nd, it’s available with 0% financing for up to 48 months.
Kia EV9
If you were waiting for a three-row SUV from a mainstream brand with a great warranty and normal doors, you’ve probably already checked out the Kia EV9. You’re not alone. Kia keeps setting EV sales records, and the EV9 is helping to drive those sales forward.
Kia’s electrified sales train doesn’t seem to be slowing down anytime soon, either. In addition to seeing some substantial discounts out there, you can finance a Kia EV9 at 0% for 72 months through Memorial Day.
Lexus RZ
Starting at $55,175, the Lexus RZ promises up to 266 miles of EPA-rated range from a 72.8 kWh battery back in the “base” RZ300e (and 224 from the top-shelf RZ450e). With up to 308 hp and over 195 lb-ft of instant, all-electric torque, the RZ promises to be one Lexus’ zippier rides in any trim.
US News is reporting that remaining 2024 and ’25 Lexus RZ models qualify for 0% financing for up to 72 months in some regions.
Nissan Ariya
I’ve already said that the Nissan Ariya didn’t get a fair shake. If you click that link, you’ll read about a car that offers solid driving dynamics, innovative interior design, and all the practicality that makes five-passenger crossovers the must-haves they’ve become for most families. With up to 289 miles of EPA-rated range, Tesla Supercharger access, and 0% interest from Nissan for up to 72 months, Nissan dealers should have no trouble finding homes for these.
Subaru Solterra
Despite being something of a slow seller, this mechanical twin of the Toyota bZ4X EV seems like a solid mid-size electric crossover with some outdoorsy vibes and granola style that offers more than enough utility to carry your mountain bikes to the trail or your kayaks to the river. Add in 227 miles of range, some big discounts, and 0% financing for up to 72 months, and this should be a great month for electric Subaru fans to drive home in a new Solterra.
Volkswagen ID.4
One of the most popular legacy EVs both in the US and Europe, the ID.4 offers Volkswagen build quality and (for 2024) a Chat-GPT enabled interface. To keep ID.4 sales rolling, VW dealers are getting aggressive with discounts, making this fast-charging, 291 mile EPA-rated range, 5-star safety rated EV a value proposition that’s tough to beat.
This month, get a Volkswagen ID.4 with 0% financing for up to 72 months or a $5,000 customer cash bonus to stack with it.
Disclaimer: the vehicle models and financing deals above were sourced from CarsDirect, CarEdge, and (where mentioned) the OEM websites – and were current as of 11MAY2025. These deals may not be available in every market, with every discount, or for every buyer (the standard “with approved credit” fine print should be considered implied). Check with your local dealer(s) for more information.
FTC: We use income earning auto affiliate links. More.
Mercedes high-performance arm is about to hurl an all-electric, 1,000 hp GT squarely into Porsche Taycan territory – but will world-beating performance and a bespoke EV chassis be enough to convince the AMG faithful to pony up for an EV?
Despite excellent driving dynamics, screens for days, and acceleration that makes you feel like the finger of God is pressing into the seat, Mercedes-AMG’s EQE and EQS models were also cursed with jellybean styling and saddled with a confusing “is it an S class or isn’t it an S class” sub-brand that, together, probably turned more people off to EVs than on.
But Mercedes is making changes to right the ship. First, it’s dumping the EQ sub-brand and merging the styling language so that its next-generation EVs will be at least as good-looking or ugly as their ICE-powered cousins – and, second, it’s giving AMG a chassis of its own to lay down a marker and, the company hopes, make the latest generation of international super saloon buyers forget all about Xiaomi.
The newest, as-yet unnamed AMG GT will be based on an entirely bespoke platform called AMG.EA, rather than being based on an existing Mercedes-Benz EV. AMG.EA reportedly makes use of several new (to AMG, at least) technologies, including a pair of axial flux electric motors that are lighter and more powerful than the radial motors used in most EVs, while being smaller, as well.
Those AMG motors are expected to receive power from a flat, low-slung battery pack and put out at least enough power and torque to chase Porsche’s super-powered Taycan Turbo GT, which itself is good for over 1,000 hp and 0-100 kmh (62 mph) in just 2.2 seconds.
The overall proportions and rakish, sloping windshield are already clearly visible, despite the heavy camo, and it looks great. If there’s anything here to really criticize, though, it’s the bizarre echoing of Mercedes’ three-pointed star motif baked into the head- and tail-lights – which just doesn’t work for me, at all.
That said, I think Mercedes lost its way the first time they ever made the star light up. That made it a fashion brand in my book, and not the engineering powerhouse I grew up with. If you’re like me, and there’s a bunch of rowdy kids playing on your lawn, head on down to the comments and let me know.
Electric AMG image gallery
SOURCE | IMAGES: Mercedes-AMG.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway