Tesla Quietly Modifies HW4 (AI4) FSD Computer Hardware

Tesla’s relentless drive to optimize its manufacturing process is a core part of its corporate identity, and a look at the newest iterations of its FSD hardware proves that no component is safe from scrutiny. In a recent analysis of the AI4 (HW4) computer from recent Model 3 and Model Y vehicles, well-known Tesla hacker Green revealed a significantly leaner design. 

Green’s overall view is that Tesla is trying hard to cut costs, but there’s definitely a lot at play here, so let’s dig in.

Removing Components

According to Green’s findings, several components have been eliminated from the new computer boards and wiring harnesses as Tesla is eliminating all non-essential components of these boards. These include the removal of various connectors and even the small batteries that power the board’s real-time clocks.

The thick copper ground wire in the wiring harness has also been removed, and the board will presumably use the vehicle’s chassis as the ground, which is a standard practice.

From a purely component-level view, removing parts directly reduces the bill of materials and, consequently, the vehicle’s cost.

More Than Cost-Cutting

However, these changes represent more than simple cost-cutting. For instance, eliminating individual ground wires and instead using the vehicle’s chassis for 100% of the electrical grounding is a move that simplifies the entire design, reduces waste, and cuts costs simultaneously, while keeping the components grounded effectively.

That not only saves on copper but simplifies the wiring harness, making it lighter, less complex, and easier for robots to install during assembly.

Similarly, removing the small, individual RTC batteries suggests that Tesla may potentially rely on the vehicle’s low-voltage battery, further reducing the components that need to be sourced, installed, and that could potentially fail over time.

While the removal of non-essential connectors may raise concerns over limiting future retrofits and vehicle modifications, from a mass-manufacturing standpoint, every unused port represents an unnecessary cost.

This leaner AI4 computer is the same unit that now includes a front bumper connector, allowing owners to retrofit a front bumper camera in the future, potentially. Soon, new Model 3s are expected to come from the factory with the front bumper camera installed.

Why Now With AI5 Coming Soon?

While the evolution of HW4 is a prime example of Tesla’s approach to vehicle architecture that reduces costs and service, the timing is peculiar. AI5, Tesla’s next-gen FSD computer, is expected to enter mass production late next year, so it seems these improvements to HW4 will be short-lived. However, Tesla could be incorporating improvements they’re learning while developing AI5. Between now and next year, Tesla is expected to sell approximately 2 million vehicles, and these cost savings may be worthwhile, even if AI5 is many times more powerful and is just around the corner.

According to a Reuters report published on Friday, the Trump administration is considering a new tariff relief package that would directly benefit automakers with major manufacturing operations in the United States.

In an interview, Republican Senator Bernie Moreno explicitly named Tesla as one of the top five domestic producers that would be “immune to tariffs” under the new plan, which would be a meaningful boost to the company’s gross margins and help alleviate recent tariff pressures.

The Tariff Proposal

The proposal seeks to extend and expand an existing tariff offset program. As announced by the Commerce Department in June, an import adjustment offset equal to 3.75% of a vehicle’s suggested retail price is in place for eligible US-assembled vehicles through April 2026. This is designed to cancel out the costs automakers pay for tariffs on imported parts used in their American factories.

According to Senator Moreno, President Trump is now considering keeping the offset at 3.75%, extending the program for a full five years, and expanding its scope to include US engine production.

Tariff Offsets

So, how does this offset actually work? It functions as a credit or rebate for the automaker, not as a direct discount to the consumer. 

The credit is calculated as 3.75% of the vehicle’s Manufacturer’s Suggested Retail Price (MSRP). For example, on a $50,000 vehicle, the offset would be $1,875. This amount is intended to cancel out or “offset” the tariffs the manufacturer paid on the various imported components, such as cells, computers, cameras, trim, or any other materials used to build the vehicle in the United States.

The result is a lower cost of goods sold for the automaker, which directly boosts the profit margin on that vehicle or lets the manufacturer lower prices.

Rewarding Made in America

The policy is explicitly designed to incentivize domestic production. 

“The signal to the car companies around the world is look, you have final assembly in the US: we’re going to reward you,” Senator Moreno told Reuters.

He listed Ford, Toyota, Honda, Tesla, and GM as the top five domestic content producers who would benefit the most.

For Tesla, which operates the massive Fremont and Gigafactory Texas facilities in the United States, this policy would strengthen its pre-existing competitive advantage. By effectively eliminating a portion of the costs associated with tariffs on imported components, Tesla could see a direct, positive impact on the profitability of every car it builds in the United States.

While a final decision hasn’t been made quite yet, Senator Moreno believes a decision could be made soon. However, a senior White House official cautioned that any discussion remains speculative until President Trump approves it.

For a company as focused on manufacturing efficiency, cost reduction, domestic onshoring, and vertical integration as Tesla, this tariff relief would be a significant financial win.

For Model 3 owners in Europe who have been struggling with the controversial steering wheel buttons, Tesla has finally launched an official solution. The Model 3 Turn Signal Stalk Retrofit is now available for purchase in the European Tesla Shop. 

The package was made available for €660 (approx. $775 USD), but quickly sold out. It includes the stalk hardware, shipping to a local service center, and the cost of installation.

Compatibility and Details

According to the product page, the retrofit is compatible with all Model 3 vehicles produced in 2023, 2024, and 2025 that were originally built without a turn stalk. That covers the full time frame since Tesla introduced the refreshed Model 3 in 2023, which means this retrofit applies to all refreshed Model 3s.

The purchasing process is straightforward. Owners can simply purchase the part directly from the Tesla Shop through their Tesla App, and it will then be shipped to their preferred Service Center. At the time of payment, you’ll also be prompted to book a service appointment for the installation.

Based on the related service procedures in the Model 3’s Service Manual, the entire process should take between 1.5 and 2 hours.

Not Just a Turn Signal Stalk

This purchase isn’t just for the addition of a turn signal stalk. While Tesla will add the new style turn signal stalk to the left side of the steering wheel, it doesn’t include all the functions a buyer may be used to with the older style stalks. The stalk is simply used for turn signals, just like the new Model Y. It can not be used for high beams, short/long presses, and it does not include the button for the windshield wiper. Those other functions remain on the steering wheel.

However, since Tesla is relocating the turn signal functionality to the stalk, the purchase also includes a new steering wheel with updated buttons that don’t have the redundant turn signal buttons.

A Welcome Course Correction

The removal of the indicator stalks on the refreshed Model 3 was one of the most contentious design decisions of the refresh. Without a yoke or steer-by-wire system that limits steering rotation, the wheel-mounted buttons were often described by users as clumsy and unintuitive. This was especially true when navigating complex European roundabouts.

This retrofit, combined with the recent news that new Model 3s shipping to Europe now include stalks by default (and front bumper camera), signals a clear and welcome course correction from Tesla in response to customer feedback.

While the retrofit provides a solution for existing owners, the question now turns to the North American market. New Model 3s produced in Fremont are still being delivered without this minor refresh, and as of now, there is no news of an official retrofit for North America.

However, we still expect this retrofit to become available for North American owners as well, likely alongside the launch of the minor refresh that also introduces the bumper camera to the Model 3.