In 2016, Elon Musk announced that all Tesla vehicles produced henceforth would possess the necessary hardware for full autonomy. However, the initial hardware versions, HW2.0 and HW2.5, fell short of this promise. Tesla introduced HW3 in 2019, claiming it would fulfill the FSD vision. Despite this, by 2023, Tesla began installing HW4, acknowledging that HW3 lacked the computational power for true autonomy. Musk conceded that HW3-equipped vehicles would require upgrades, a process he described as “painful and difficult.”

Tesla faces legal challenges over its FSD claims. In one case, a judge ruled in favor of a Tesla owner who was misled about the vehicle’s self-driving capabilities, ordering Tesla to cover the upgrade costs. Additionally, the California Department of Motor Vehicles has accused Tesla of misleading advertising regarding its Autopilot and FSD features.

Owners with HW2.0 or HW2.5 hardware are eligible for a complimentary upgrade if they purchase the FSD package. However, those subscribing to FSD must pay an additional $1,000 for the necessary hardware upgrade. This is on top of the $10,000 upfront cost or $199 monthly subscription fee for FSD. Despite these expenses, the FSD system still requires active driver supervision and does not deliver the fully autonomous experience initially promised.

The hardware shortcomings and ensuing legal issues have cast a shadow over Tesla’s reputation for innovation. As the company navigates these challenges, it faces increased scrutiny from regulators and consumers alike, potentially affecting its position in the competitive electric vehicle market.