Tesla has altered its longstanding claim that all vehicles come equipped with full self-driving hardware, now stating they are merely 'designed for autonomy.' This shift appears in the company's Q3 shareholder letter amid escalating legal challenges over unfulfilled autonomy promises. Customers who purchased Full Self-Driving software face hardware limitations in older models.
In late 2016, Tesla confidently announced on its website that 'All Tesla Cars Being Produced Now Have Full Self-Driving Hardware.' This referred to the Hardware 2 (HW2) system, which included cameras and computing power intended to enable full autonomy through future software updates. Buyers of the Full Self-Driving (FSD) package, costing up to $15,000, expected over-the-air enhancements without additional hardware.
As limitations emerged, Tesla offered free upgrades to Hardware 3 (HW3) for FSD purchasers, while non-buyers did not receive them. However, with the introduction of Hardware 4 (HW4, or AI4) and plans for Hardware 5 (HW5, or AI5), HW3's processing power has proven insufficient for advanced self-driving tasks.
The company's Q3 shareholder letter, released on October 22, 2025, marks a notable change: 'Every Tesla vehicle delivered today is designed for autonomy.' This phrasing replaces explicit promises of onboard FSD hardware, emphasizing design intent over current capabilities. It allows Tesla to highlight future AI services without committing to immediate hardware adequacy.
This evolution coincides with at least three class-action lawsuits in the US, China, and Australia, alleging Tesla failed to deliver promised autonomy. CEO Elon Musk has repeatedly tied the company's value to self-driving success, stating Tesla would be 'worth basically zero' without it and that robotaxis could add $5 trillion in valuation. Musk also described FSD-enabled cars as 'appreciating assets' capable of tasks like errands or ridesharing.
The revised language may help Tesla defend against claims for free HW3 upgrades, potentially limiting liabilities that could reach billions. Critics argue it dilutes core marketing promises that drove sales for over a decade.