Tesla To Upgrade HW3 Cars If Needed: What To Expect

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At the Q3 2024 Investor Call, Elon Musk discussed the future of autonomy. One question that came up was what about FSD Hardware 3? Today, Hardware 3 has been lagging behind Hardware 4, now dubbed AI4.

Given what has been previously said at We, Robot, Elon and Tesla fully believed that autonomy - Unsupervised FSD and Robotaxi, would be possible on HW3. Now, that statement has been backtracked. Elon and Tesla’s top-notch engineers are no longer sure whether HW3 will be capable of meeting the expectations of a safe, autonomously driven vehicle.

With AI 5 entering into production in 2026, even AI4 has a short lease on production life. But what does that mean for HW3 vehicles today? Let’s dig in.

Tesla Will Upgrade HW3 If Needed

Elon has confirmed for the first time that if Tesla can not make autonomy work on HW3, they will upgrade the affected vehicles. That upgrade, of course, would be free for customers who purchased FSD on their HW3 vehicles. For the early Model 3 that came with Hardware 2.5, owners should also be able to get a free upgrade to newer hardware after they purchase FSD. Elon didn’t go into a lot of detail, but it’s not clear whether FSD subscribers would also get a free upgrade if needed, but it sounds like they would.

There are a few things to note here.

Elon didn’t provide a date for this potential future upgrade or any expectation of when HW3 will be officially considered legacy. Elon said that Tesla isn’t 100% sure whether FSD would be possible on HW3. Tesla’s approach to FSD will now be to make it work on HW4, then backport or find ways to make it work on HW3. At some point, it sounds like they may determine this to not be possible.

It’s in Tesla’s best interest financially to delay that decision as long as possible and instead move HW3 owners to AI4 or newer hardware through free FSD transfer opportunities.

However, if Tesla decides that HW3 doesn’t have enough compute power, there will always be a large number of vehicles that need to be upgraded. The Tesla drivetrain—motors and batteries—are built to last, and with less than 2% annual degradation being tracked by third parties, we can expect to see 2018 Model 3s still on the road in 2030 and beyond.

There is some chance that HW3 does not achieve a safety level that allows for unsupervised FSD

What’s the Upgrade?

Here’s the thing—Hardware 3 has lower-resolution cameras and uses a different wiring harness. AI4 and beyond use a unified harness and improved cameras. On the earnings call, Elon said that the upgrade would be an inference computer upgrade only.

That means better and faster processing and an improved FSD experience for users. It can also save Tesla money by having the AI team spend less time backporting FSD to HW3.

No Camera Upgrades

The unified wiring harness and the cameras in HW3 vehicles will remain since Tesla doesn’t see them hindering progress. The harness in HW3 vehicles isn’t capable of carrying more data or power, making upgrades to cameras or hardware difficult.

Tesla is already approaching autonomy-level capabilities on Hardware 3, so in their eyes, it's just a matter of improving the models and decision-making rather than increasing the raw pixel count coming in. According to Tesla, there will be no camera upgrades.

No Bumper Camera

We expect to see the front bumper camera added to more vehicles in the near future. The Cybercab and Cybertruck both already have front bumper cameras, while the Model Y Juniper Refresh has been seen with one as well. The Models S and X are also expecting a bumper camera whenever they get a refresh.

We’re not sure how much of an impact this will have on the robotaxi or Unsupervised FSD, but given that the refreshed Model 3 Highland didn’t come with the bumper camera last year alongside the Cybertruck, it may not be necessary.

HW 3.5 Upgrade

Many users are speculating that HW3 will be upgraded to HW4, but that is unlikely to be the case. As we mentioned, HW4 has a different wiring harness and cameras and those won’t easily fit into a HW3 vehicle due to space and power constraints.

Instead, Tesla will likely create a new inference chip and board made specifically for HW3 vehicles. It’ll need to be as powerful as HW4’s computer but much more efficient.

Tech progresses quickly, and what was once cutting-edge in 2017 is now left behind in the dust. So, this process of getting an HW4-capable computer working with the constraints of an HW3 vehicle will get easier the more time goes on. Tesla will likely start engineering the process in the future, using smaller transistors with a smaller process node, newer chipset-style processor designs, and overall better energy efficiency.

One thing to look out for is redundancy. This lets the FSD computer work on two separate chips, making sure they both reach the same conclusion before the vehicle acts on it. Redundancy helps with errors due to component failures, errors in processing or other issues. Hardware 3 was built with redundancy in mind, but Tesla has since removed it in order to use both nodes for processing power instead of redundancy. If and when Tesla releases the HW3 retrofit computer, it’ll be interesting to see if they include this back in.

When?

Right now, Tesla isn’t even sure whether an upgrade for HW3 will be needed. It sounds like that may be the case, but for now, Tesla isn’t for sure. They simply want to reassure owners that an upgrade will be available for HW3 if needed.

Tesla also doesn’t want to have to upgrade vehicles twice, so this upgrade will be the absolute last-ditch effort to get HW3 vehicles up to a safe level of autonomy. Even Tesla can’t be sure what it will take to completely solve autonomy yet, so they can’t build an upgrade until they know what it’ll take.

Don’t expect a HW3 upgrade before FSD is solved. Once Tesla knows the computing power and potentially other hardware required, then they can start thinking about retrofitting vehicles that don’t meet those requirements. Our best guess is that a HW3 upgrade is still years away.

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Tesla Plans Massive 10x Robotaxi Expansion: A Look at the Potential New Area

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With Tesla’s first major expansion of the Robotaxi Geofence now complete and operational, they’ve been hard at work with validation in new locations - and some are quite the drive from the current Austin Geofence.

Validation fleet vehicles have been spotted operating in a wider perimeter around the city, from rural roads in the west end to the more complex area closer to the airport. Tesla mentioned during their earnings call that the Robotaxi has already completed 7,000 miles in Austin, and it will expand its area of operation to roughly 10 times what it is now. This lines up with the validation vehicles we’ve been tracking around Austin.

Based on the spread of the new sightings, the potential next geofence could cover a staggering 450 square miles - a tenfold increase from the current service area of roughly 42 square miles. You can check this out in our map below with the sightings we’re tracking.

If Tesla decides to expand into these new areas, it would represent a tenfold increase over their current geofence, matching Tesla’s statement. The new area would cover approximately 10% of the 4,500-square-mile Austin metropolitan area. If Tesla can offer Robotaxi services in that entire area, it would prove they can tackle just about any city in the United States.

From Urban Core to Rural Roads

The locations of the validation vehicles show a clear intent to move beyond the initial urban and suburban core and prepare the Robotaxi service for a much wider range of uses.

In the west, validation fleet vehicles have been spotted as far as Marble Falls - a much more rural environment that features different road types, higher speed limits, and potentially different challenges. 

In the south, Tesla has been expanding towards Kyle, which is part of the growing Austin-San Antonio suburban corridor spanning Highway 35. San Antonio is only 80 miles (roughly a 90-minute drive) away, and could easily become part of the existing Robotaxi area if Tesla obtains regulatory approval there.

In the East, we haven’t spotted any new validation vehicles. This is likely because Tesla’s validation vehicles originate from Giga Texas, which is located East of Austin. We won’t really know if Tesla is expanding in this direction until they start pushing past Giga Texas and toward Houston.

Finally, there have been some validation vehicles spotted just North of the new expanded boundaries, meaning that Tesla isn’t done in that direction either. This direction consists of the largest suburban areas of Austin, which have so far not been serviced by any form of autonomous vehicle.

Rapid Scaling

This new, widespread validation effort confirms what we already know. Tesla is pushing for an intensive period of public data gathering and system testing in a new area, right before conducting geofence expansions. The sheer scale of this new validation zone tells us that Tesla isn’t taking this slowly - the next step is going to be a great leap instead, and they essentially confirmed this during this Q&A session on the recent call. The goal is clearly to bring the entire Austin Metropolitan area into the Robotaxi Network.

While the previous expansion showed off just how Tesla can scale the network, this new phase of validation testing is a demonstration of just how fast they can validate and expand their network. The move to validate across rural, suburban, and urban areas simultaneously shows their confidence in these new Robotaxi FSD builds.

Eventually, all these improvements from Robotaxi will make their way to customer FSD builds sometime in Q3 2025, so there is a lot to look forward to.

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Caught on Video: Tesla FSD Tackles a Toll Booth — Here’s How It Pulled It Off

@DirtyTesLa on X

For years, the progress of Tesla’s FSD has been measured by smoother turns, better lane centering, and more confident unprotected left turns. But as the system matures, a new, more subtle form of intelligence is emerging - one that shifts its attention to the human nuances of navigating roads. A new video posted to X shows the most recent FSD build, V13.2.9, demonstrating this in a remarkable real-world scenario.

Toll Booth Magic

In the video, a Model Y running FSD pulls up to a toll booth and smoothly comes to a stop, allowing the driver to handle payment. The car waits patiently as the driver interacts with the attendant. Then, at the precise moment the toll booth operator finishes the transaction and says “Have a great day”, the vehicle starts moving, proceeding through the booth - all without any input from the driver.

If you notice, there’s no gate here at this toll booth. This interaction all happened naturally with FSD.

FSD 13.2.9 pulls up to a toll booth, waits for me to complete my transaction, then pulls away without a gate. 😳 Incredible. https://t.co/OsH1YAY8Ty pic.twitter.com/9hWAbLNrVa

— Dirty Tesla (@DirtyTesLa) July 27, 2025

How It Really Works

While the timing was perfect, the FSD wasn’t listening to the conversation for clues (maybe one day, with Grok?) The reality, as explained by Ashok Elluswamy, Tesla’s VP of AI, is even more impressive.

It can see the transaction happening using the repeater & pillar cameras. Hence FSD proceeds on its own when the transaction is complete 😎

— Ashok Elluswamy (@aelluswamy) July 27, 2025

FSD is simply using the cameras on the side of the vehicle to watch the exchange between the driver and attendant. The neural network has been trained on enough data that it can visually recognize the conclusion of a transaction - the exchange of money or a card and the hands pulling away - and understands that this is the trigger to proceed.

The Bigger Picture

This capability is far more significant than just a simple party trick. FSD is gaining the ability to perceive and navigate a world built for humans in the most human-like fashion possible.

If FSD can learn what a completed toll transaction looks like, it’s an example of the countless other complex scenarios it’ll be able to handle in the future. This same visual understanding could be applied to navigating a fast-food drive-thru, interacting with a parking garage attendant, passing through a security checkpoint, or boarding a ferry or vehicle train — all things we thought that would come much later.

These human-focused interactions will eventually become even more useful, as FSD becomes ever more confident in responding to humans on the road, like when a police officer tells a vehicle to go a certain direction, or a construction worker flags you through a site. These are real-world events that happen every day, and it isn’t surprising to see FSD picking up on the subtleties and nuances of human interaction.

This isn’t a pre-programmed feature for a specific toll booth. It is an emergent capability of the end-to-end AI neural nets. By learning from millions of videos across billions of miles, FSD is beginning to build a true contextual understanding of the world. The best part - with a 10x context increase on its way, this understanding will grow rapidly and become far more powerful.

These small, subtle moments of intelligence are the necessary steps to a truly robust autonomous system that can handle the messy, unpredictable nature of human society.

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