As Tesla continues to redefine the automotive industry, insiders have revealed that the company's upcoming Hardware 4.0 (HW4) will not include the radar module in its Model Y vehicles, at least not initially. This marks a shift in the company's approach towards autonomous driving, relying more heavily on vision-based systems. This strategic decision builds on the recent introduction of HW4 in the luxury Model S and Model X models.
HW4 Evolution and Vision Focus:
Previously, the integration of HD radar in the Model S and Model X indicated an evolution in the company's Full Self-Driving (FSD) hardware. However, according to a trusted source, Tesla is not including HD radar in its new Model Ys with HW4. This surprising decision could mean several things, possibly indicating that Tesla views HD radar as a "ground truth" to help improve their vision systems rather than a vital component for FSD vehicles.
Ground-truth Radar: A Tool for Vision Improvement:
In this sense, ground truth refers to the objective reality or facts of a situation, typically used as a benchmark to measure the accuracy of an AI system's predictions or observations.
Last year, Tesla registered a new high-resolution radar unit with the U.S. Federal Communications Commission (FCC), a move that sparked speculation about the company's approach to FSD. The radar unit, intended for imaging similar to LiDAR, hinted at Tesla's continuing interest in using ground-truth systems to train their machine-learning algorithms for vision accuracy. Despite Elon Musk's well-documented skepticism towards LiDAR for autonomous driving, Tesla prototypes have been spotted with LiDAR sensors.
HD Radar to be Added Later?
Although Tesla may be using its radar in HW4 vehicles to improve their vision system, other possibilities could have led Tesla to this decision. New Model Ys with HW4 may only be without radar temporarily, possibly due to a supply chain issue. New owners would still better off receiving a vehicle with HW4 and without radar than a HW3-equipped vehicle due to the improved cameras and faster FSD computer that includes redundancy.
Cost Savings
Of course, HD radar inclusion could also come down to cost. With the Model Y costing almost half of Tesla's luxury models, this decision could come down to cost. If Tesla believes their FSD system could perform almost identically to vehicles with radar, they may simply decide to forego the radio technology in lower-cost vehicles.
Balancing Vision and Radar: The Trade-Off:
While HD radar and LiDAR can provide highly accurate 3D depth measurements, their high cost and potential to overwhelm the FSD system with conflicting data have led Tesla to prioritize camera-based vision systems. Musk has consistently argued that self-driving cars should navigate the world in the same manner as human drivers, using cameras and computational power to navigate three-dimensional space.
Model Y With HW4 But Without HD Radar:
While excluding HD radar from the HW4 in Model Y might seem like a setback, it could prove to be a game-changer. Tesla's strategy of using radar to enhance vision rather than as a core component of its FSD system means that these vehicles may not be as disadvantaged as initially thought.
This approach is consistent with Tesla's earlier decision to remove ultrasonic sensors from some vehicles, enabling them to run vision-based park assist code and compare vision readings to ultrasonic sensor readings. This resulted in significant improvements in vision detection, further solidifying Tesla's commitment to a vision-oriented future.
Introducing HW4 into the Model Y may suggest Tesla's potential future strategies. For instance, commercial Robotaxis may employ multi-sensor systems, including radar and possibly LiDAR, to achieve full automation. Conversely, consumer self-driving vehicles could maintain the vision-only approach to keep costs down.
Ultimately, the transition to HW4 indicates Tesla's unwavering pursuit of refining autonomous driving technology. As the landscape of self-driving vehicles continues to evolve, it will be interesting to see how Tesla's approach shapes the future of this sector.
Subscribe
Subscribe to our newsletter to stay up to date on the latest Tesla news, upcoming features and software updates.
In this article, we’ll cover Tesla’s updates on Optimus, batteries, and Tesla Energy.
Optimus
Tesla has been working away on their humanoid robot and continues to make progress in software and hardware.
First, Tesla is preparing the Fremont factory for the Optimus pilot production line, which is scheduled for completion later this year. Once it is, wider deployments of Optimus for internal use within Tesla’s facilities are expected as well. Tesla aims to have several thousand Optimus units working in its North American factories by the end of the year once the pilot production line is operational.
Tesla’s goals for production remain extremely lofty - 1 million units per year by 2030. However, they could face some challenges when ramping production.
Key components like the shoulder actuators use specialized permanent and rare-earth magnets, which are currently sourced from China. Due to recent Chinese restrictions on the overseas sale of these magnets, Tesla is seeking an exemption or alternative suppliers. They have not yet looked into modifying the shoulder actuator but will likely do so if they cannot obtain the necessary materials.
Batteries
Batteries are another item that Tesla’s teams have been working on behind the scenes for years now. The second generation of the 4680 - the Cybercell - has been IRA-compliant for some time now. This means that the Cybertruck is eligible for the US Federal EV rebate.
Tesla also achieved the lowest cost-per-kWh of any of its cells with the 4680 battery - and it is potentially one of the cheapest cells being manufactured by any vehicle battery manufacturer at this point. With dry-cathode still being worked on, Tesla may be able to squeeze more optimizations and cost efficiencies from the 4680 cells.
Additionally, Tesla is progressing with its plans for lithium refining and cathode production in the US, both of which are scheduled to commence in 2025. While the company says they’re no longer supply-constrained for non-LFP vehicle batteries, on-shoring production and sourcing critical minerals from nations outside of China will be key.
LFP batteries continue to be supplied-constrained - namely for the Tesla Energy division. LFP batteries and their materials are sourced from China. Due to tariffs and limited exports, Tesla is can’t obtain enough and is considering potentially building an LFP production facility in North America.
Energy
Tesla’s energy division is still experiencing some of the highest growth of any of its divisions. Year over year, Tesla saw a 154% increase in energy storage deployments, including both Megapack and Powerwall - for a total of 10.4 GWh deployed in just Q1 2025. While deliveries in energy storage remain volatile due to the nature of Megapack installations, Tesla expects growth to continue rapidly in this segment.
Tesla also deployed 1GWh of Powerwall 3 residential storage this quarter, marking its strongest quarter. Powerwall 3 has received positive feedback from customers, many of whom appreciate its new capabilities with its built-in inverter for solar.
Megapack is continuing to see demand increases, currently highlighted by utility-scale Megapack systems, as well as data centers requiring stable power delivery. Megafactory Shanghai is also online now and producing Megapacks - with an annual production capacity of 20GWh today and up to 40GWh in the future. The site has also produced over 100 Megapacks this quarter, which are all awaiting delivery.
There was a lot of interesting news from Tesla’s Q1 2025 Earnings Call, covering everything from FSD and Robotaxi - to the less glamorous but equally important Megapack and Powerwall.
Tesla is heavily leaning into artificial intelligence, and its insurance offering is just another example of how it’s improving its product or lowering costs by leveraging AI.
Tesla recently started offering an insurance discount in select states when drivers use FSD for at least 50% of their drives and now it’s introducing an AI to help handle customer claims.
Tesla has developed an in-house voiced AI agent that can assist customers in handling simple support requests for Tesla Insurance.
For customers calling in from those states, the new AI agent provides a unique way to address the most common support calls. And it’s not just answering common questions but actually making requested changes to the owner’s account.
Policy Changes
The first key item is that it automates policy changes. Simple policy updates, including adjusting your deductible or coverage limits, are now done via AI. For policyholders who are simply looking to make quick changes and don’t have any questions, this makes the process a lot quicker by not having to wait for a representative. Tesla isn’t eliminating representatives, but this could reduce the number of representatives required or reduce wait times.
Continue Where You Left Off
The second item here, highlighted by Raj Jegannathan from Tesla’s internal IT team, is that Tesla’s AI agent is able to offer summaries of the user’s last interaction with Tesla Insurance. It will summarize your last interaction and provide assistance on that particular topic if you need to continue it. That means that you don’t have to wait for a human to review your file - the AI will kick off right where you left off.
Tesla appears to be focused on improving efficiency and making support more accessible. While actual items like claims are left up to humans due to their inherently complex nature, this helps free up employees to handle more complex items. While there’s no doubt Tesla will continue to develop this AI like they do everything else, we may soon see it take on even more tasks.
More AI
This isn’t the first AI agent that Tesla has demoed - there is now a chat-based AI sales agent available on the front page of Tesla’s website, which is able to answer common questions on Tesla vehicles.
Tesla has also been improving their AI support tool available in the Tesla App is able to provide feedback on common issues and also guide users towards either solving the problem or placing a support request.
Tesla’s strategy here is to influence the cost-heavy areas associated with having humans address simple requests and instead leverage AI, which can offer instant answers and reduce support costs.
Roll Out to More States
While this new AI is currently limited to just 12 states, it is likely to follow Tesla Insurance’s expansion. Insurance seems to have been at a bit of a standstill lately. Tesla continues to improve features such as the improvements to Safety Score V2.2, but we haven’t seen Tesla roll out support to new states since it added Minnesota in November of 2022.
![Tesla’s B-Pillar Recording Requires HW4 [Update: New Dashcam Viewer Included on HW3 / Ryzen Vehicles]](https://www.notateslaapp.com/img/containers/article_images/tesla-screen/dashcam-viewer-hw3.jpg/ba8281c93679d2cf4a405a771e96b167/dashcam-viewer-hw3.jpg)
![Tesla Semi Keynote: New Features, 46 Charging Sites, Upgraded Battery & More [VIDEO]](https://www.notateslaapp.com/img/containers/article_images/semi/semi-new-features.jpg/c7df4e0d32f8cb0beee080ad201e943b/semi-new-features.jpg)
