Tesla’s self-driving dream could cost the company billions. Elon Musk’s car brand might have to replace the ‘self-driving’ computer in about 4 million vehicles or pay the owners some cash.
Back in 2016, Tesla claimed that all cars from that point on would have “all the hardware necessary for full self-driving capability.” Nearly 10 years later, that hasn’t happened, and it doesn’t seem likely to anytime soon.
Tesla promised full self-driving cars years ago
Back in 2016, Tesla made a pretty big claim: that all cars going forward would have “all the hardware necessary for full self-driving capability.” Over the years, the company has changed how it defines ‘full self-driving.’
But back then, and even for years after, Musk was telling people that Tesla owners would eventually get a software update that would turn their cars into “robotaxis.” The kind that could drive completely by themselves — level 4 or 5 autonomy. That’s unsupervised, no human required, driving — even without anyone in the car.
The promise hasn’t been fulfilled nearly a decade later
But, well… here we are. Almost ten years later, and that “self-driving future” doesn’t seem any closer. And it doesn’t look like it’ll be here anytime soon, either.
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A judge’s ruling adds pressure on Tesla
Back in 2022, a judge stepped in and made things interesting. He told Tesla they had to upgrade a customer’s self-driving computer — for free — so they could subscribe to Tesla’s Full Self-Driving (FSD) program without coughing up more cash.
The judge based this on Tesla’s original promise that cars made since 2016 would already have the hardware to run these features. So, the owners of those cars should’ve been able to use them, no extra cost.
Musk admits the hardware isn’t enough
Then, in January this year, Musk kind of threw in the towel. He admitted that the HW3 computers in these cars just don’t have the power to handle true, unsupervised self-driving.
So yeah, that pretty much confirms the gap between what Tesla promised and what’s actually possible right now.
Tesla faces a potential multi-billion-dollar fix
So, what does this mean for Tesla? Well, the company could be facing a big, expensive fix. They might have to replace the computers in around 4 million cars around the world.
These cars use the HW3 computer, and they span models from the Model 3 to the Model X. Each replacement is going to take a lot of precise work and could end up costing Tesla $10 billion — or maybe even more. That’s a lot of cash.
Tesla’s options: replace or compensate?
Tesla has a couple of ways to handle this mess. They could replace the hardware in millions of cars, but that would be a huge financial burden. Or, they could just pay owners directly.
The second option sounds easier, but it has its own problems. Like, how do you decide what’s fair for everyone? Some owners have had their Full Self-Driving for years now. How do you make that right?
Lawsuits and brand damage could follow
If Tesla doesn’t fix this properly, it could face even more lawsuits. And that’s not all.
If this drags on too long or doesn’t get handled well, it could seriously hurt Tesla’s reputation. People trust the brand, but if they feel like the company isn’t keeping its promises, that trust could start to fade.
A high-stakes decision for Tesla
At the end of the day, Tesla’s got a tough choice ahead of it. Whether they replace the hardware or pay owners, either way, they’re looking at a massive cost.
And how they handle it could have a big impact on their future.
