Last night Tesla rolled out update 2024.26.15 which included FSD v12.5.1.4. Although the release notes remain the same with this update, the big news is that Tesla has finally added support for hardware 3 vehicles to this FSD 12.5 version.
Once the release went out, we heard rumblings early on that update 2024.26.15 may add support for hardware 3, however, today we’ve been able to confirm that Tesla has HW3 vehicles running this latest FSD update.
Elon Musk initially said that FSD 12.5 was expected to be available for HW3 in about 10 days after it rolled out to AI4. Although that date has come and passed, it finally arrived for employees last night. Although It’s only been about three weeks, it felt like an eternity for HW3 owners who have been anxiously awaiting this update. Many owners weren’t sure whether their vehicles would be able to run the latest version of FSD once the original goal of 10 days was missed. This is one area where Tesla can stand to improve — consumer communication.
Rollout Plan
Although Tesla has internal HW3 vehicles running update FSD 12.5.1.4, their public rollout plan may not go to HW3 vehicles initially. Tesla may choose to roll out the update to vehicles with HW4 first to confirm there are no regressions before proceeding with the launch on HW3 vehicles.
Keep in mind that not every release that goes to employees ends up going out to the public. However, most releases usually start rolling out to early-access customers within a few days if there are no major issues.
HW3 vehicles are currently running FSD v12.3.6, while most HW4 (AI4) vehicles are running FSD v12.5.1.3. FSD v12.5 in general includes a huge array of optimizations and is supposed to be as big an improvement as the capability jump between v11 and v12.
We don’t expect any new features in FSD v12.5.1.4 besides HW3 support as that would complicate solving any potential regressions. However, we’re still awaiting several new features that come in a later version of FSD v12.5 such as nag-less FSD using sunglasses, FSD support on the Cybertruck, improved lane changes, end-to-end neural networks on the highway, and even Actually Smart Summon.
What’s Included & Who’s Eligible
This update is based on Tesla’s 2024.26 code branch, meaning that everyone who subscribes or owns FSD will be eligible to receive it. Tesla is already testing update 2024.32, but it hasn’t gone out to customers yet.
FSD V12.5 rolled out to AI4 vehicles much earlier than hardware 3 vehicles – as code optimization was required to have the FSD model run on the older hardware. It seems that the extra compute offered by AI4 vehicles has allowed Tesla to release V12.5 faster, which also helps them gather more data.
Now that HW3 support has been released, this could set the new tempo for new updates. Major FSD updates – V12.6 or V12.7 will likely also have AI4 support before hardware 3 support, as it seems easier to develop with more hardware power and then later optimize code once you have a working product. However, Tesla has committed to maintaining hardware 3 support, even if the code requires optimization to function on older hardware.
Divergence
AI4 only really started rolling out in the middle of last year, with most customer vehicles arriving with AI4 near May 2023. The optimization gap has been a surprise, especially since AI4 is still running hardware 3 in emulation mode. There will be a divergence between AI4 and Hardware 3, and Elon has mentioned that the new supercomputer cluster will be dedicated to preparing for AI4, and in the future, AI5.
This is going to be a big one for most people – after all, we’re estimating that nearly 85% of Tesla’s current fleet, if not more, is still on hardware 3. Did Tesla manage to fit the complete AI model, with all its parameters – a 6x increase over V12.3.6 – onto Hardware 3?
If there were compromises, we’ll need to watch and see. Hopefully, some enterprising Tesla X or YouTube owners will record a test drive on v12.5.1.4 on both, a HW3 and AI4 vehicle for us to compare the differences. We’re hoping that since the official divergence of hardware hasn’t happened yet, at this point, we won’t see any differences.
Upcoming Features
Once FSD v12.5 rolls out to hardware 3 vehicles, we can look forward to the upcoming list of features, including more natural and better-planned turns, the E2N highway stack, and vision-only monitoring with sunglasses. Of course, there are a few other hotly anticipated features we’re waiting for, but which aren’t on the Upcoming Improvements list provided in the patch notes – including Park Seek and Banish Autopark, as well as vehicle-to-fleet communications and FSD understanding hand gestures.
We’re hoping to see these features come in point releases of FSD V12.5, which means they should arrive at similar times for HW3 and AI4 vehicles.
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Tesla is rolling out a fairly big update for its iOS and early-access-only Robotaxi app, delivering a suite of improvements that address user feedback from the initial launch last month. The update improves the user experience with increased flexibility, more information, and overall design polish.
The most prominent feature in this update is that Tesla now allows you to adjust your pickup location. Once a Robotaxi arrives at your pickup location, you have 15 minutes to start the ride. The app will now display the remaining time your Robotaxi will wait for you, counting down from 15:00. The wait time is also shown in the iOS Live Activity if your phone is on the lock screen.
How Adjustable Pickups Work
We previously speculated that Tesla had predetermined pickup locations, as the pickup location wasn’t always where the user was. Now, with the ability to adjust the pickup location, we can clearly see that Tesla has specific locations where users can be picked up.
Rather than allowing users to drop a pin anywhere on the map, the new feature works by having the user drag the map to their desired area. The app then presents a list of nearby, predetermined locations to choose from. Once a user selects a spot from this curated list, they hit “Confirm.” The pickup site can also be changed while the vehicle is en route.
This specific implementation raises an interesting question: Why limit users to predetermined spots? The answer likely lies in how Tesla utilizes fleet data to improve its service.
Here is the new Tesla Robotaxi pickup location adjustment feature.
While the app is still only available on iOS through Apple’s TestFlight program, invited users can download and update the app.
Tesla included these release notes in update 25.7.0 of the Robotaxi app:
You can now adjust pickup location
Display the remaining wait time at pickup in the app and Live Activity
Design improvements
Bug fixes and stability improvements
Nic Cruz Patane
Why Predetermined Pick Up Spots?
The use of predetermined pickup points is less of a limitation and more of a feature. These curated locations are almost certainly spots that Tesla’s fleet data has identified as optimal and safe for an autonomous vehicle to perform a pickup or drop-off.
This suggests that Tesla is methodically “mapping” its service area not just for calibration and validation of FSD builds but also to help perform the first and last 50-foot interactions that are critical to a safe and smooth ride-hailing experience.
An optimal pickup point likely has several key characteristics identified by the fleet, including:
A safe and clear pull-away area away from traffic
Good visibility for cameras, free of obstructions
Easy entry and exit paths for an autonomous vehicle
This change to pick-up locations reveals how Tesla’s Robotaxi Network is more than just Unsupervised FSD. There are a lot of moving parts, many of which Tesla recently implemented, and others that likely still need to be implemented, such as automated charging.
Frequent Updates
This latest update delivers a much-needed feature for adjusting pickup locations, but it also gives us a view into exactly what Tesla is doing with all the data it is collecting with its validation vehicles rolling around Austin, alongside its Robotaxi fleet.
Tesla is quickly iterating on its app and presumably the vehicle’s software to build a reliable and predictable network, using data to perfect every aspect of the experience, from the moment you hail the ride to the moment you step out of the car.
The massive legislative effort titled the "Big Beautiful Bill" is taking direct aim at what has become one of Tesla’s most critical and profitable revenue streams: the sale of US regulatory credits. The bill could eliminate billions of dollars from Tesla’s bottom line each year and will slow down the transition to electric vehicles in the US.
The financial stakes for Tesla are absolutely immense. In 2024, Tesla generated $2.76 billion from selling these credits. This high-margin revenue was the sole reason Tesla posted a profit in Q1 2025; without the $595 million from regulatory credits, Tesla’s reported $409 million in profit would have been a $189 million loss.
How the ZEV Credit System Works
Zero-Emission Vehicle (ZEV) credits are part of state-level programs, led by California, designed to accelerate the adoption of electric vehicles. Each year, automakers are required to hold a certain number of ZEV credits, with the amount based on their total vehicle sales within that state. Under this system, automakers that fail to sell a certain percentage of zero-emission vehicles must either pay a significant fine or purchase credits from a company that exceeds the mandate.
Automakers who fail to sell enough EVs to meet their quota have a deficit and face two choices: pay a hefty fine to the state government for each missing credit (for example, $5,000 per credit in California) or buy credits from a company with a surplus.
As an all-EV company, Tesla generates a massive surplus of these credits. It can then turn around and sell them to legacy automakers at prices cheaper than the fine, creating a win-win scenario: the legacy automaker avoids a larger penalty, and Tesla gains a lucrative, near-pure-profit revenue stream.
This new bill will dismantle this by eliminating the financial penalties for non-compliance, which would effectively make Tesla’s credits worthless. While the ZEV program is a state law, the Big Beautiful Bill will fully eliminate the penalties at a federal level.
A Multi-Billion Dollar Impact
The removal of US ZEGV credits would be a severe blow to Tesla’s financials. One JPMorgan analyst estimated that the move could reduce Tesla’s earnings by over 50%, representing a potential annual loss of $2 billion. While Tesla also earns similar credits in Europe and China, analysts suggest that 80-90% of its credit revenue in Q1 2025 came from US programs.
Why the Program Exists
While the impact on Tesla would be direct and immediate, the credit system has a wider purpose. It creates a strong financial incentive for legacy automakers to develop and accelerate their zero-emission vehicle programs, whether it’s hydrogen, electric, or another alternative.
Eliminating the need for these credits would remove that financial pressure. This could allow traditional automakers to slow their EV transition in the US without the fear of a financial penalty, potentially leading to fewer EV choices for consumers and a slower path to vehicle electrification in the country.
Big, But Not Beautiful
On Sunday Morning TV, Elon Musk was asked his thoughts on the Big Beautiful Bill. They were pretty simple. A bill could be big, or it could be beautiful - I don’t know if it can be both, Musk stated.
Elon Musk in new interview: "I was disappointed to see the massive spending bill, frankly, which increases the budget deficit and undermines the work the DOGE team is doing. I think a bill could be big, or it could be beautiful—I don't know if it can be both." pic.twitter.com/DnyjHN7xCY
The bill poses a threat to Tesla’s bottom line and to the adoption of EVs in the US market, where automakers will no longer have a financial incentive to transition to cleaner vehicles, a market they’ve regularly struggled in when competing against Tesla.
Tesla will have to work carefully in the future to cut expenses to remain profitable after the elimination of these regulatory credits.
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