Electric Cars

During its third-quarter 2026 earnings conference call, Tesla notably sidestepped a critical question from its shareholders. This unanswered query concerned the provision of complimentary hardware enhancements for owners of vehicles equipped with Hardware 3 (HW3), specifically addressing the path to achieving full, unsupervised Full Self-Driving (FSD) capabilities. Despite its prominence, being among the top-ranked questions submitted by investors, the company chose not to address it directly, leading to heightened scrutiny regarding its transparency and its long-term strategy for customers who have invested in FSD.

The specific question, which garnered significant support from shareholders, probed when HW3 owners would receive clear communication on whether they would be eligible for a no-cost computer upgrade to support unsupervised FSD, a feature they had paid for with the understanding that their current hardware was sufficient. This omission is particularly striking given that Tesla proceeded to answer questions of lesser shareholder priority. The company's silence on this matter fueled existing concerns about its legal obligations and its customer commitment.

Tesla's head of investor relations, Travis Axelrod, navigated through various other inquiries, including those related to Cybercab scaling, FSD deployment in customer vehicles, and Optimus robot unit economics. However, the pressing issue of HW3 upgrades remained untouched throughout the call. This deliberate avoidance suggests a reluctance to provide concrete answers, possibly due to the significant financial implications of retrofitting millions of vehicles or compensating affected owners. The lack of discussion on HW3, AI3, or retrofitting solutions during the entire call left many shareholders and customers feeling overlooked.

The second question that Tesla did address, concerning the timeline for unsupervised FSD in customer cars, received a response from Ashok Elluswamy, Tesla's head of AI. He indicated that FSD version 15, which will power Model Y robotaxis and the Cybercab, is expected to roll out to customers, with some vehicles potentially joining the robotaxi fleet by the second quarter of the following year. This projection, however, primarily applies to vehicles equipped with the newer Hardware 4 (HW4), implicitly excluding HW3 owners. Elon Musk himself previously acknowledged that HW3 lacks the necessary processing power to support unsupervised FSD, creating a disparity for millions of customers who purchased the FSD package based on earlier assurances.

Tesla's ongoing legal challenges are exacerbated by its ambiguous stance on HW3. The company faces multiple class-action lawsuits globally, including in the US, China, and Australia, in addition to a collective claim in the Netherlands involving thousands of HW3 owners. These legal actions stem from the unfulfilled promise that existing hardware would be sufficient for full self-driving. Documents from Dutch regulators further reveal that Tesla only sought approval for HW4 to enable FSD in Europe, underscoring the limitations of HW3. The distribution of a scaled-back FSD v14 “Lite” to HW3 owners, functioning merely as a supervised driver assistance system, falls short of the full self-driving experience that customers initially purchased for a premium.

The decision to bypass the HW3 question during the earnings call appears to be a calculated move. Every potential answer to this question carries substantial financial implications for Tesla, possibly involving the costly replacement of computer systems and cameras in an estimated four million vehicles, or providing monetary compensation to affected customers. Furthermore, any statement made on this issue could be used against the company in ongoing legal proceedings. By maintaining silence, Tesla might be attempting to mitigate short-term financial and legal risks. However, this strategy raises concerns about Tesla's commitment to its customer base and its transparency with shareholders, especially those who invested in FSD based on the premise of future full autonomy with their current hardware. The future resolution for HW3 owners remains uncertain, with the possibility that a definitive plan may only materialize through legal mandates rather than proactive company initiatives.

Ferrari's highly anticipated first all-electric vehicle, the Luce, will enter the American market with a starting price of $560,800. This figure is approximately $80,000 less than the initially speculated $640,000. Deliveries for US customers are slated to commence in the second quarter of 2027. This adjustment in pricing stems from a clearer understanding of European tax structures and currency exchange rates, rather than a price reduction for US buyers, who will still incur local sales taxes.

Ferrari Luce EV: Market Debut and Sales Performance

The Ferrari Luce, unveiled in May, initially carried a European price tag of €550,000. Media outlets, including early reports, converted this amount directly to US dollars, arriving at an estimated $640,000. However, this estimate did not account for Europe's Value Added Tax (VAT), which in Italy stands at 22%. When VAT is excluded, the Italian price translates to approximately €450,800, or about $506,000 at current exchange rates. The US price of $560,800 is therefore about $55,000 higher than the pre-tax Italian price, partly due to a 15% US tariff on European-built vehicles. This price also excludes any optional features, which are typically a significant addition for Ferrari buyers.

Despite its premium price and a somewhat divisive design, the Ferrari Luce has already seen remarkable sales success. The entire 2026 allocation of nearly 500 units sold out in under two months, with a substantial portion of demand originating from China. Furthermore, the first production chassis fetched an astonishing $40 million at a charity auction for the Ferrari Foundation in August. The Luce boasts impressive specifications: a quad-motor setup delivering 1,035 horsepower, an 800V architecture, a 122 kWh battery pack from SK On, and a 0-100 km/h acceleration time of 2.5 seconds. It also marks Ferrari's first five-seater vehicle.

The market's enthusiastic reception of the Ferrari Luce sends a clear message to the luxury automotive industry: wealthy consumers are indeed willing to invest in high-performance electric vehicles. This success challenges the skepticism held by some luxury brands, like Maserati, which previously hesitated to launch electric supercars due to concerns about buyer willingness. Ferrari's bold move with the Luce, a four-door EV with a distinctive design and a substantial price tag, demonstrates that brand loyalty and cutting-edge performance can overcome perceived barriers in the electric vehicle market. While some initial orders may be influenced by Ferrari's allocation system, which favors loyal customers, the sheer volume of deposits underscores a significant shift in consumer preferences within the ultra-luxury segment. The true test of the Luce's enduring appeal will come in 2027 and 2028, as it moves beyond early collectors and seeks to establish its own merits in the broader market. This development could pave the way for Ferrari to explore more electric sports car models in the future, further solidifying its position in the evolving automotive landscape.