Tesla Plans Microfactories, Trade-Ins for Millions of FSD Hardware Upgrades

Tesla will build microfactories across U.S. cities to retrofit millions of Hardware 3 vehicles (sold 2019-2023) with new computers and cameras for unsupervised Full Self-Driving, or offer discounted trade-ins to owners who paid up to $15,000 for FSD. This follows Elon Musk's April 22, 2026 earnings call admission that HW3 lacks capability for true FSD, despite prior CFO hints it might work. The plans could strain costs, hit resale values, boost service revenue but raise regulatory risks, pressuring shares amid execution challenges.