Elon Musk admits millions of Tesla owners need a true ‘Full Self-Driving’ upgrade.

Elon Musk said on Wednesday that millions of Tesla owners will need a hardware upgrade to run a future version of his Full Self-Driving program that does not require public supervision – after he and Tesla spent years promising that would not be the case.

The admission could open the company up to legal challenges from customers who bought Teslas believing the cars were just one software upgrade to allow them to drive themselves.

Musk said Wednesday during Tesla’s quarterly earnings call that cars with the third version of Tesla’s driver technology, called “Hardware 3,” will need a new computer and new cameras. He also said that these areas will be so heavy that Tesla is looking to build “small factories” in “large areas” so that the company’s work areas will not fail.

“Once it’s done at the point of service, it’s too slow to do it, and it’s not very efficient. So we need, like many production lines, to change it,” Musk said on the call.

Tesla owners with Hardware 3 cars have spent years challenging the company and Musk to answer directly if they can drive a high-end model of Full Self-Driving – which, it should be noted, Tesla has not yet released, or proven that they can. Tesla sold these cars between 2019 and 2023.

Musk finally a captive the fact that the hardware 3 was not enough to drive more models of Full Self-Driving in January 2025.

“I think the honest answer is that we need to upgrade people’s computers to Hardware 3 for those who have bought Full Self-Driving,” he said. “It’s going to be painful and difficult, but we can do it.”

However, the company’s chief financial officer, Vaibhav Taneja, said otherwise six months ago in October 2025 when he said. Tesla may still be able to work. “We haven’t given up on HW3,” he said at the time.

Tesla said on Wednesday that it will still release the most advanced version of the current Full Self-Driving software for owners of Hardware 3. But Musk did not doubt that the upgrade will require anything else.

“Hardware 3 does not have the ability to implement unsupervised FSD,” he said.