Tesla CEO Elon Musk has made a significant admission, stating that the company's existing vehicles will need new hardware to achieve full self-driving (FSD) capabilities. This revelation contradicts Musk's previous claims that Teslas already possess the necessary hardware for autonomous driving.

The news came during Tesla's recent earnings call, where Musk interrupted Ashok Elluswamy, the company's head of Autopilot and AI software, who was discussing the development of FSD software for newer vehicles equipped with the HW4 computer. Musk stated that the HW3 computer, which has been shipped to millions of Tesla owners, will need to be upgraded for those who have purchased the FSD package.

This admission marks a significant shift in Tesla's stance on autonomous driving. In 2016, the company published a blog post claiming that all its electric vehicles (EVs) had the necessary hardware for FSD. However, that post was later deleted, and Tesla began shipping updated HW3 computers to replace older HW2.5 units. Now, Musk is acknowledging that even the HW3 computers are insufficient for achieving full self-driving capabilities.

The implications of this admission are significant. Tesla owners who purchased the FSD package, which has increased in price from $2,000 to as high as $15,000, will need to receive new hardware upgrades. However, it remains unclear whether Tesla will engineer a new retrofit upgrade or how it will handle the logistics of such an undertaking.

Furthermore, the HW3 computers currently installed in millions of Tesla vehicles are also susceptible to shorting out, a problem that has led to massive recalls in the US and China. This issue has resulted in collateral symptoms such as inoperable rearview cameras.

Musk's admission has sparked questions about the company's previous promises and its commitment to delivering on its autonomous driving ambitions. The news may also impact Tesla's reputation and customer trust, particularly among those who have invested in the FSD package.

In the midst of this controversy, Tesla is shifting its focus to its HW4 development, which is currently being shipped with the facelifted Model 3, the redesigned Model Y, and 2023 and newer Model S and X vehicles. The company's ability to deliver on its autonomous driving promises will be closely watched in the coming months.

The admission also raises questions about the regulatory environment surrounding autonomous vehicles. As the industry continues to grapple with the challenges of achieving full self-driving capabilities, Musk's concession may have broader implications for the development and deployment of autonomous vehicles.

In conclusion, Elon Musk's admission that Teslas need new hardware for full self-driving capabilities marks a significant turning point in the company's autonomous driving journey. The news has far-reaching implications for Tesla owners, the company's reputation, and the broader autonomous vehicle industry.