On its Q1 2026 earnings call, Elon Musk confirmed that vehicles built with Hardware 3 (sold 2019–2023) cannot achieve unsupervised Full Self-Driving because HW3 carries one-eighth the memory bandwidth of Hardware 4. Rather than the long-promised free software-only upgrade, Tesla is replacing that commitment with a discounted trade-in program and plans to build urban microfactories to handle the retrofits — which require new cameras, a new computer, and rewired harness; the AI4+ computer needed for the upgrade isn't expected in production until mid-2027. The disclosure affects approximately 1.28 million active FSD purchases and subscriptions, some purchased for up to $15,000, and may expose Tesla to legal challenges based on prior representations to buyers.