Tesla now faces another major obstacle because it needs to either replace ‘self-driving’ computers in their 4 million vehicles or pay owners of those vehicles. Elon Musk confirmed that the HW3 computer Tesla installed in vehicles from 2019 to 2023 lacks the capability to deliver level-4 or level-5 autonomous driving even though Tesla vehicles were marketed with all necessary hardware for full self-driving.
Musk announced in 2016 that Tesla would equip all vehicles starting from that year with complete self-driving hardware capabilities. The HW2.5 computer Tesla used proved inadequate to fulfill its original promise; thus, the company started replacing vehicles with HW3 computers. The HW4 computer transition in 2023 revealed new limitations because the HW3 system failed to deliver on the promised fully autonomous driving capabilities.
The potential liability facing Tesla becomes significant because the company has well over 4 million vehicles operating worldwide. The Tesla FSD package owners face the most severe impact because they received promises of capabilities Tesla now cannot deliver. Musk admitted that the car upgrades will cause “pain” and operational challenges while estimating expenses to surpass $500 million. The legal situation against Tesla is intensifying because previous self-driving claims in their advertisements have been ruled false by certain courts.
The rising number of lawsuits against Tesla could force the company to pay compensation to its affected owners, leading to billions of dollars in financial liabilities. Many consumers lack faith that hardware improvements will deliver promised features, so they consider compensation as the only practical solution. The present circumstances challenge both the prospects of self-driving automobiles and Tesla’s capacity to fulfill its previously proclaimed standards.