Tesla CEO Elon Musk announced that owners of vehicles equipped with the company's 2019 Hardware 3 system may need to trade in their cars to enable unsupervised Full Self-Driving (FSD).

Musk explained that Hardware 3 lacks the necessary memory bandwidth, which is crucial for AI systems like FSD. "Hardware 3 simply does not have the capability to achieve unsupervised FSD," he stated during the company's first-quarter earnings call.

For customers who have already purchased FSD, Tesla is offering a discounted trade-in for a vehicle with Hardware 4. An upgrade path involving replacing both the onboard computer and cameras is also available, though Musk acknowledged the significant logistical challenges, suggesting the need for specialized "micro factories" for upgrades.

He indicated that converting all Hardware 3 cars to Hardware 4 will eventually be necessary for them to join the Robotaxi fleet and achieve unsupervised FSD. This move aligns with Tesla's long-term vision of producing predominantly autonomous vehicles.

Currently, Tesla's FSD system is generally considered to be a Level 2 autonomy system, requiring constant driver supervision. The National Highway Traffic Safety Administration (NHTSA) is investigating Tesla's FSD system following several crashes involving vehicles where FSD was engaged.