Countless Tesla Inc customers who paid thousands of dollars for autonomous-driving capability lack the necessary hardware in their vehicles, leading Elon Musk to outline options for redress that likely will be costly for the company.
The chief executive officer acknowledged during Tesla’s quarterly earnings call Wednesday that millions of cars were built with computers and cameras that aren’t up to the task of driving without human supervision. The shortcomings apply to an older set of equipment, called Hardware 3, that Tesla installed in vehicles from early 2019 through early 2023.
"I wish it were otherwise, but Hardware 3 simply does not have the capability to achieve unsupervised FSD,” Musk said, referring to the suite of features Tesla markets as Full Self-Driving.
To make amends with customers who bought FSD for cars that are deficient, Tesla will offer two options. The first will be to trade in their vehicle for a new model with upgraded hardware, Musk said. Alternatively, owners will be able to take their car in to small factories the company will set up in major metropolitan areas for retrofits.
"If it’s done just at the service centre, it is extremely slow to do so and inefficient,” Musk told analysts. Tesla will need "many production lines” to replace the computer and cameras on board the vehicles, he said.
Musk didn’t address how many customers will be eligible for the trade-ins or retrofits, or offer details including where the microfactories will be located. He and several other Tesla executives didn’t respond to emailed follow-up questions.
Tesla shares erased after-hours gains during the company’s earnings call and fell as much as 3.6% before the start of regular trading Thursday. The stock has fallen 21% from a record high in mid-December. – Bloomberg
