Tesla Officially Announces FSD Hardware 5.0 and How It Compares to Hardware 4.0 [VIDEO] (2024)

At this year’s Tesla shareholder meeting, Elon Musk announced a slate of changes for Tesla’s FSD hardware. For the first time, Musk talked openly about details of Tesla’s upcoming FSD Hardware 5, or “AI 5” and the differences between hardware 3 and hardware 4.

Hardware 4.0 Divergence

Currently, hardware 4.0 runs Hardware 3 in emulation mode, but with the completion of Tesla’s new AI-focused Supercomputer cluster, hardware 4 will eventually diverge from Hardware 3. Emulation mode simulates hardware 3, which means that today, hardware 4 is very similar to hardware 3. Elon Musk confirmed that the new cluster will be entirely focused on hardware 4 training, rather than hardware 3.

Hardware 4’s cameras are approximately 4-5x better in terms of resolution and fidelity than hardware 3, and hardware 4.0 is about 3-5x faster and powerful in inference capabilities. These are some pretty significant numbers, and Musk said he expects hardware 4.0 to eventually be about 5x better than hardware 3.0.

Hardware 3

While hardware 3 is no longer being produced, Tesla has said in the past that it will be capable of self-driving at a level that is safer than humans. Elon Musk confirmed on stage that hardware 3 would continue to receive training and would still have new FSD versions developed for it, however, hardware 4 would eventually be “about 5 times” better than hardware 3.

At some point hardware 3 will hit the end of its service life, but that’s not expected for at least several years.

Sadly, Tesla has previously confirmed that they do not intend to have a hardware 3 to hardware 4 retrofit, as the size of the MCU and electrical harnesses differ between vehicle hardware iterations.

Hardware 5.0 - “AI 5”

Elon Musk also officially announced Tesla’s FSD hardware 5.0, which he says Tesla is now calling “AI 5”. AI 5 is expected to hit the production lines for customer vehicles in approximately 18 months - around December 2025, with a massive slate of improvements. It is expected to be approximately 10x better than hardware 4.0, and up to 50x better in terms of inference power alone.

Of course, these massive improvements don’t come without a cost – AI 5 will consume up to 800 watts of power. In comparison, hardware 3 and hardware 4 use about 200 watts today, so don’t expect any upgrades from hardware 4. Like most modern processors, AI 5 can adjust its power efficiency. It’ll be able to ramp up or down its processing power depending on the complexity of the scene and the power needed.

We can expect that AI 5 will likely run in emulation mode when it arrives, and improvements between hardware 4 and AI 5 will take some time, similar to how hardware 4 is still in emulation mode today.

Musk Talking About AI 5

Musk talks about Tesla’s FSD hardware below during Tesla’s 2024 shareholder’s meeting, where he officially talked about Tesla’s upcoming hardware 5.0 for the first time.

During Tesla’s shareholder meeting, Elon Musk was asked if FSD transfers could return for existing owners. He hemmed and hawed, but eventually gave in when an audience member asked if they could return for just one more quarter.

Final Chance?

This could be the last chance for FSD owners to transfer their FSD capability to a new vehicle. Elon Musk mentioned that it removes revenue from upcoming vehicle sales. Every time Tesla offers FSD transfers, it impacts Tesla’s potential earnings.

On the flip side, it does incentivize current owners to upgrade to newer vehicles, especially if it’s a limited-time offer. Tesla previously offered FSD transfers in Q3 of 2023. FSD transfers are expected to be limited to North America where FSD software is currently available.

When Will Tesla Offer FSD Transfers

Musk nor Tesla mentioned a timeline for when FSD transfers would begin. Tesla owners looking to upgrade their vehicles would likely wait for this offer to be available before buying their new Tesla. Since this would reduce some vehicle sales, it seems that Tesla wouldn’t want to wait too long before making FSD transfers available again.

FSD Transfers in the Future

While Elon Musk didn’t seem to be too enthused with the idea of continuing transfers but gave in to “just one more quarter”, there could be more down the road.

Musk has said that Tesla has various demand “levers” they can use to increase or slow demand as needed. FSD transfers and Tesla’s referral program are prime examples of those levers. Although Musk says Tesla will only offer FSD transfers one more time, Tesla won’t hesitate to offer it again if they need to increase sales. Tesla faced this situation when the new Model 3 was unveiled in China, but it took several months for it to be offered in North America.

Additional FSD Trials

Elon Musk confirmed that two free weeks of FSD would be given to all vehicle owners whenever a major FSD update hits. We don’t expect another trial of FSD with the upcoming update of v12.4, but perhaps with v12.5 or 12.6, especially if Tesla adds new features such as ‘Actually Smart Summon,’ which will be the first time Smart Summon is available on a vehicle without ultrasonic sensors.

With Tesla’s app update to v4.34 yesterday, it appears that Tesla may be looking to offer a live video feed of the vehicle’s various cameras while you’re summoning your Tesla.

February 18, 2024