Tesla CEO Elon Musk admitted during a recent earnings call that millions of existing Tesla owners will need physical hardware upgrades to run a future, more capable version of the company's Full Self-Driving software. According to TechCrunch, this upcoming version of the software aims to operate without human supervision.
The admission follows Tesla's recent earnings report, which showed $1.4 billion in free cash flow and revenue that met or slightly exceeded analyst expectations. However, the news regarding hardware compatibility has caused concern among owners of vehicles equipped with Hardware 3, which were sold between 2019 and 2023.
Tesla has not yet released or proven the capability of this advanced software version. TechCrunch reports that owners of Hardware 3 cars have spent years seeking clarity from Musk and the company regarding whether their vehicles would support the new technology.
Potential for microfactories
Musk stated that the company would need to physically upgrade each of these affected vehicles. This process could require Tesla to establish microfactories in several major cities to manage the service demands of potentially millions of cars, TechCrunch reported.
Such a massive undertaking would likely impact Tesla's capital expenditures. The company has already expanded its capital expenditure budget to $25 billion for the current year, according to the report.
