Firmware
Tesla could be sitting on a $1.2 trillion vehicle software market by 2030
The advent of fully autonomous cars could result in vehicle software revenues hitting as high as $1.2 trillion per year by 2030. This is according to recent statements from Elmar Degenhart, who serves as chief executive of Continental, one of the world’s biggest auto parts’ suppliers.
An emerging market
According to the auto parts exec, ensuring that self-driving vehicles will work correctly requires a lot of software mastery. Software is a key component for self-driving, as it will determine how well a vehicle processes signals and input from its suite of sensors. During the Auto Motor und Sport industry congress in Stuttgart, Germany on Tuesday, Degenhart noted that software is something the auto industry is lacking in. “Software competence is mission critical for successful car companies but the industry lacks scale in this competence,” he said.
Despite the emergence of companies like Tesla that use software as a key component of its vehicles, veteran carmakers still have a long way to go before they could reach parity with the electric car maker. This is particularly prominent in a number of Tesla competitors that have emerged over the past year. A perfect example of this is the Jaguar I-PACE, an excellent electric car save for its slow infotainment system and substandard range. Both these problems (particularly the infotainment system) could have been addressed through software optimizations.
Mastery of software, or lack thereof
The lack of mastery on the software front could become a huge liability for traditional automakers. Today, vehicle software generates annual revenues of about $280 billion a year, and Degenhart estimates that the market would grow more than four times by 2030. That’s $1.2 trillion a year. The Continental executive argues that this scenario presents a great opportunity for those that are proficient in vehicle software, since veteran carmakers can adapt to the autonomous driving trend by working with tech companies.
“Car companies are good at validation and homologation and lack software development skills, while software companies have the opposite problem. The IT industry has always valued speed of development more than perfecting the product, while the auto industry has tended to veer toward perfecting a product over rushing it out. The software and the auto industry will have to work more closely together to develop autonomous vehicles and this will lead to a change in approach on both sides,” he said.
A perfect fit
It could be said that the $1.2 trillion scenario described by Degenhart is a perfect fit for Tesla, which is arguably the most prominent automaker that currently develops both its vehicles’ hardware and software in-house. This vertical integration allows Tesla to develop technologies and features that are fully compatible with its vehicles. As shown by the success of companies that adopt the same strategy, such as Apple, Tesla’s synthesis of software and vehicle hardware could be a key advantage over other automakers that are stepping into the autonomous driving field.
Tesla’s potential in the full self-driving market is a key thesis for one of the company’s biggest bulls, Cathie Woods of ARK Invest. ARK has a long-term price target of $4,000 per share for Tesla, provided that the company taps into the autonomous mobility-as-a-service market. This is something that Elon Musk has actually discussed in the past. Dubbed the Tesla Network, the system would allow owners to have their vehicles be part of a self-driving ride-sharing service. Musk outlined Tesla’s advantage in this upcoming market during the Q3 2018 earnings call. “The advantages that Tesla will have is that we’ll have millions of cars in the field with full autonomy capability, and no one else will have that. So, I think that will end up putting us in the strongest competitive position long-term,” Musk said.
Elon Musk
Tesla confirmed HW3 can’t do Unsupervised FSD but there’s more to the story
Tesla confirmed HW3 vehicles cannot run unsupervised FSD, replacing its free upgrade promise with a discounted trade-in.
Tesla has officially confirmed that early vehicles with its Autopilot Hardware 3 (HW3) will not be capable of unsupervised Full Self-Driving, while extending a path forward for legacy owners through a discounted trade-in program. The announcement came by way of Elon Musk in today’s Tesla Q1 2026 earnings call.
🚨 Our LIVE updates on the Tesla Earnings Call will take place here in a thread 🧵
Follow along below: pic.twitter.com/hzJeBitzJU
— TESLARATI (@Teslarati) April 22, 2026
The history here matters. HW3 launched in April 2019, and Tesla sold Full Self-Driving packages to owners on the understanding that the hardware was sufficient for full autonomy. Some owners paid between $8,000 and $15,000 for FSD during that period. For years, as FSD’s AI models grew more demanding, HW3 vehicles fell progressively further behind, eventually landing on FSD v12.6 in January 2025 while AI4 vehicles moved to v13 and then v14. When Musk acknowledged in January 2025 that HW3 simply could not reach unsupervised operation, and alluded to a difficult hardware retrofit.
The near-term offering is more concrete. Tesla’s head of Autopilot Ashok Elluswamy confirmed on today’s call that a V14-lite will be coming to HW3 vehicles in late June, bringing all the V14 features currently running on AI4 hardware. That is a meaningful software update for owners who have been frozen at v12.6 for over a year, and it represents genuine effort to keep older hardware relevant. Unsupervised FSD for vehicles is now targeted for Q4 2026 at the earliest, with Musk describing it as a gradual, geography-limited rollout.
For HW3 owners, the over-the-air V14-lite update is welcomed, and the discounted trade-in path at least acknowledges an old obligation. What happens next with the trade-in pricing will define how this chapter ultimately gets written. If Tesla prices the hardware path fairly, acknowledges what early adopters are owed, and delivers V14-lite on the June timeline it committed to today, it has a real opportunity to convert one of the longest-running sore subjects among early adopters into a loyalty story.
Tesla announced its Spring 2026 software update, and it’s the most feature-dense seasonal release the company has put out. The update covers twelve named changes spanning FSD, voice AI, safety lighting, dashcam storage, and pet display customization, among other things.
The centerpiece for owners with AI4 hardware is a redesigned Self-Driving app. The new interface lets owners subscribe to Full Self-Driving with a single tap and view ongoing FSD usage stats directly in the vehicle.
Grok gets its biggest in-car upgrade yet. The update adds a “Hey Grok” hands-free wake word along with location-based reminders, so a driver can now say “remind me to pick up groceries when I get home” without touching the screen. Grok first arrived in vehicles in July 2025, but each update has pushed it closer to genuine daily utility. Musk framed the broader vision clearly at Davos in January, saying Tesla is “really moving into a future that is based on autonomy.”
On safety, the update introduces enhanced blind spot warning lights that integrate directly with the cabin’s ambient lighting, building on the blind spot door warning that arrived in update 2026.8.
Dog Mode has been renamed Pet Mode and now lets owners choose a dog, cat, or hedgehog icon and add their pet’s name to the display.
Dashcam retention now extends up to 24 hours, up from the previous one-hour rolling loop, with a permanent save option for any clip. Weather maps now show rain and snow with better color differentiation and include the past hour of precipitation data along the route.
Tesla has now established a clear rhythm of two major OTA pushes per year. As with last year’s Spring update, that cycle started taking shape in 2025 with adaptive headlights and trunk customization. The 2025 Holiday Update then added Grok to the vehicle for the first time. This Spring follows that structure: the Holiday update introduces new architecture, and the Spring update broadens it across the fleet.
Two notable features still did not make it. IFTTT automations, which launched in China earlier this year, were held back from this North American release for unknown reasons, and Apple CarPlay remains absent, reportedly still delayed by iOS 26 and Apple Maps compatibility issues.
Below is the full list of feature updates released by Tesla.
— Tesla (@Tesla) April 13, 2026
It appears that Tesla may be preparing to roll out some subscription-based services soon. Based on the observations of a Wales-based Model 3 owner who performed some reverse-engineering on the Tesla mobile app, it seems that the electric car maker has added a new “Subscribe” option beside the “Buy” option within the “Upgrades” tab, at least behind the scenes.
A screenshot of the new option was posted in the r/TeslaMotors subreddit, and while the Tesla owner in question, u/Callump01, admitted that the screenshot looks like something that could be easily fabricated, he did submit proof of his reverse-engineering to the community’s moderators. The moderators of the r/TeslaMotors subreddit confirmed the legitimacy of the Model 3 owner’s work, further suggesting that subscription options may indeed be coming to Tesla owners soon.
Did some reverse engineering on the app and Tesla looks to be preparing for subscriptions? from r/teslamotors
Tesla’s Full Self-Driving suite has been heavily speculated to be offered as a subscription option, similar to the company’s Premium Connectivity feature. And back in April, noted Tesla hacker @greentheonly stated that the company’s vehicles already had the source codes for a pay-as-you-go subscription model. The Tesla hacker suggested then that Tesla would likely release such a feature by the end of the year — something that Elon Musk also suggested in the first-quarter earnings call. “I think we will offer Full Self-Driving as a subscription service, but it will be probably towards the end of this year,” Musk stated.
While the signs for an upcoming FSD subscription option seem to be getting more and more prominent as the year approaches its final quarter, the details for such a feature are still quite slim. Pricing for FSD subscriptions, for example, have not been teased by Elon Musk yet, though he has stated on Twitter that purchasing the suite upfront would be more worth it in the long term. References to the feature in the vehicles’ source code, and now in the Tesla mobile app, also listed no references to pricing.
The idea of FSD subscriptions could prove quite popular among electric car owners, especially since it would allow budget-conscious customers to make the most out of the company’s driver-assist and self-driving systems without committing to the features’ full price. The current price of the Full Self-Driving suite is no joke, after all, being listed at $8,000 on top of a vehicle’s cost. By offering subscriptions to features like Navigate on Autopilot with automatic lane changes, owners could gain access to advanced functions only as they are needed.
Elon Musk, for his part, has explained that ultimately, he still believes that purchasing the Full Self-Driving suite outright provides the most value to customers, as it is an investment that would pay off in the future. “I should say, it will still make sense to buy FSD as an option as in our view, buying FSD is an investment in the future. And we are confident that it is an investment that will pay off to the consumer – to the benefit of the consumer.” Musk said.
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