Tesla no longer promises that all of its cars have the hardware onboard for Full Self-Driving, instead now saying that its cars are “designed for autonomy.”
The change happens amidst a growing call for Tesla to upgrade old cars, sold with the promise of complete autonomous operation, but whose hardware is increasingly becoming incapable of running the latest versions of Tesla’s driver assist software.
We’re going into a little history for this one, as way back in late 2016, Tesla stated confidently on its website that “All Tesla Cars Being Produced Now Have Full Self-Driving Hardware.”
The idea was that, even if Tesla’s software wasn’t fully up to snuff yet, the hardware on Tesla vehicles was capable of full self-driving tasks, with a suite of cameras and a brain powerful enough to theoretically be able to drive the car itself, with no human intervention.
And since Tesla’s vehicles rely heavily on software updates, then those who spent the thousands of dollars required to purchase access to Tesla’s Full Self-Driving software (which, to date, still does not fully drive itself) would eventually get full autonomous driving capability delivered to them over the air, without having to bring the car in for service to add any sensors of computers.
That blog post was written in the era of Tesla’s “hardware 2” or HW2 system. It was the first hardware platform made by Tesla, as the previous HW1 version was made in cooperation with Mobileye.
It eventually became apparent that HW2 didn’t have enough power, so Tesla started offering free computer upgrades to its newer HW3 computer those who had bought Full Self-Driving (FSD). People who didn’t buy FSD wouldn’t get the upgrade, but that’s okay, since they wouldn’t need it anyway (well, except for people who buy an FSD subscription, who Tesla charged $1,000 for hardware they already bought, and still continues to charge that fee despite having sold those cars with the promise that they contain all the hardware necessary for FSD).
That was all well and good… until Tesla introduced another version of its self-driving hardware (HW4, sometimes called AI4), with another upgrade (HW5/AI5) planned for release soon.
It’s becoming apparent that HW3 simply doesn’t have the processing power necessary, and Tesla knows it. The company knows it’s going to have to upgrade the computers in potentially hundreds of thousands of vehicles before they can accomplish full self driving tasks, but it keeps kicking the can down the road instead of offering solutions.
Instead, some of Tesla’s solutions have been to simply change the language it uses. Tesla has repeatedly backtracked from autonomy-related promises, whether it be by deleting the blog post where it promised FSD hardware, starting to call FSD “FSD (Supervised)”, and modifying how it defines FSD.
Tesla now says its cars are “designed for autonomy”
And yet another step has been made today, with Tesla now stating that all its cars are “designed for autonomy,” notably not promising that they include any hardware features that would enable it.
In Tesla’s Q3 shareholder letter, released today, the company includes this line (emphasis ours):
Our focus remains on scaling our core hardware business by maximizing our deliveries and deployments, as these products will deliver increasing value to our customers over time via services powered by AI. *Every Tesla vehicle delivered today is designed for autonomy* while every Tesla energy storage product is capable of being enhanced and optimized by our virtual power plant or Autobidder functionality.
The distinction is small, but important. Previously, Tesla promised that those cars already have the hardware for full self-driving, and then made a whole blog post detailing what exactly that meant.
Now, the company is merely saying that they were designed with autonomy in mind, but not delivered with any particular features that would enable it in the future for today’s customers. This phrasing promises less, while still making it sound like an autonomous future is coming. It enables Tesla to sell a solution later, but doesn’t tell current buyers they’re getting anything yet – or anytime soon.
This isn’t a minor feature change, it’s core to Tesla’s marketing
And this promise of self-driving has been key to Tesla’s business over the years. For the last decade, Tesla CEO Elon Musk has repeatedly stated that full autonomous drive capabilities would come soon – typically saying it would happen “by the end of this year” or “by the end of next year,” in any given year.
Musk has said that Tesla as a company is “worth basically zero” if it doesn’t solve full self-driving. More recently, he said that self-driving and Robotaxis would be worth around $5 trillion in valuation for the company.
He also said that cars would be “appreciating assets” due to FSD, such that if you bought a Tesla in the past, it would only be worth more today, because of the increasing value of self-driving software and the ability to use your car to do useful work for you (go pick up the kids, get groceries, or run your own personal Robotaxi service… something we’ve heard nothing more about even as Tesla starts to charge money for its own half-baked “Robotaxi” rides).
Legal challenges could cost a lot for Tesla
The change in language is also relevant to various brewing legal challenges over Tesla’s treatment of HW3 customers.
For years, every Tesla sold was sold with the promise of having full self-driving capability, and many customers spent up to $15,000 for access to software that still has not yet been delivered.
There are now at least three class action lawsuits over Tesla’s failure to deliver on its autonomy promises, in the US, China and Australia. Together, these lawsuits and other potential challenges could mean billions of dollars in liabilities for the company.
And so, Tesla needed to change its language to something more noncommittal. It may try to argue that cars delivered after these changes in language shouldn’t qualify for free upgrades. It may be hoping that enough HW2 cars are aged off the road by the time true autonomy comes around that there just won’t be many of them left to change out the computers of.
Or it may just be kicking the can down the road, without a plan, because its CEO is too busy doing ketamine and pretending to be good at videogames while trying to ruin his own company.
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