Elon Musk’s Tesla forced to fix one mistake in 4,000,000 vehicles that could end up costing $10,000,000,000

Tesla Might Face Billions in Costs After New Legal Decision on Self-Driving Tech

Tesla may be on the hook for a massive expense following a recent court ruling tied to the company’s self-driving system.

A judge has opened the door for Elon Musk’s company to potentially replace the onboard computers in millions of Tesla vehicles—a move that could come with a price tag in the billions.

The issue traces back to 2016, when Tesla announced that all vehicles manufactured from that point onward would be equipped with the necessary hardware for fully autonomous driving.

While the definition and implementation of Tesla’s “Full Self-Driving” (FSD) have evolved, Musk assured customers that a software update would eventually activate advanced autonomous capabilities, including level 4 or 5 autonomy—meaning vehicles would be able to operate without human supervision, even without anyone in the car.

Fast forward nearly a decade, and that promise remains largely unfulfilled.

A 2022 legal case set a precedent when a judge ordered Tesla to provide a free hardware upgrade for a customer so they could use the FSD service they had paid for—without any additional charges.

Tesla’s previous claims suggested these vehicles already had everything needed for full autonomy, so the court determined that owners shouldn’t have to pay again to access features they were promised.

Adding to the controversy, Elon Musk acknowledged earlier this year that Tesla’s HW3 computer—installed in around 4 million vehicles—is not sufficient to support full unsupervised self-driving.

This has opened the possibility of widespread hardware replacements or financial compensation for affected owners.

Replacing the outdated HW3 computers across Tesla’s lineup, from the Model 3 to the Model X, would be a massive undertaking—both technically and financially. Industry experts estimate that this could cost Tesla upwards of $10 billion.

Alternatively, the company could choose to offer financial settlements to customers instead of performing the upgrades. But even that option presents challenges, such as determining fair payouts, especially for early adopters who paid for FSD years ago.

If Tesla fails to handle the situation appropriately, it could face additional legal battles and risk damaging its reputation with consumers.