Elon Musk always gets excited about upcoming products — and this time, he’s announcing Tesla will have an epic demo later this year. Not just any demo, but the “most epic demo ever,” according to Musk. He then emphasized it by saying “Ever.” again. It certainly sets high expectations, but what could Elon be alluding to?
Given Tesla’s ambitious roadmap, there are numerous possibilities that could have Musk this excited. Given it’s coming from the Tesla Design Studio, we’re expecting this to be a physical item, rather than something software-based like FSD breakthroughs.
With the Q2 2025 Earnings Call around the corner, we may learn more about the upcoming demo soon; otherwise, we may have to wait until Elon teases it further or Tesla sends out event invites.
Let’s take a look at what Musk could be so excited about that could be part of this epic demo.
Contender 1: Optimus V3
First in the ring is Tesla’s humanoid robot, Optimus, which is expected to receive its production variant, version 3, by the end of 2025.
The production variant is supposed to bring together everything that Tesla has learned over the years on Optimus V2 and combine it with mass-manufacturable hardware for the first time.
A full-blown demonstration of Optimus V3 working in Tesla’s factories, performing complex tasks autonomously - something no other humanoid robot has done to date - would most certainly fit the bill. A truly capable humanoid robot that can understand and interact with the real world would be a game-changing technology, and an early demo showcasing that would certainly be unforgettable.
Contender 2: The New Roadster
Hiding somewhere in a corner of our ring is the next-generation Tesla Roadster. It has been years since the demonstration of the Roadster and its SpaceX-powered cold-gas thrusters. While we’ve received occasional updates on the Roadster, it’s clear it hasn’t been Tesla’s priority, nor should it be.
A demonstration of a finalized, production-ready Tesla Roadster would be a massive event—and one that people have been waiting for for years. This would be especially awesome to see in a world where the track is now dominated not by the Model S Plaid but by the Rimac Nevera and Lucid Air Sapphire.
Contender 3: More Affordable Models
While less flashy than the other two corners, this contender is probably the biggest elephant in the room. There are now two versions of “affordable” vehicles. One is a trimmed-down Model Y, while the other is the long-rumored $25k vehicle that is expected to be based on the Robotaxi.
For Tesla’s “legacy” vehicle business, a more affordable vehicle will help drive growth, while allowing the still-nascent AI and robotics businesses to get their footing.
What will be Tesla's 'most epic demo ever' later this year?
The last contender is the production variant of the Tesa Semi. With the new Semi factory in Nevada beginning to ramp up and begin volume production, there’s no better time to reveal the final production version of the Semi.
We’ve seen pilot vehicles on the road, as well as some wrapped-up test variants at Tesla’s production facilities - but we’ve yet to see the final version. A full blown demo of the Semi hauling a trailer on a long-haul route would definitely be something to show off.
While it may not be as exciting for the average consumer, the Tesla Semi is on a path to revolutionize the trucking industry and transition it to electric. Trucking accounts for 23% of greenhouse gas emissions and up to 60% of fine particulate matter emissions, despite comprising only about 10% of vehicles.
This is one of the places Tesla can have one of its biggest impacts. Many of their industrial partners are already on board to electrify their fleets.
Whatever the demo ultimately is, it’s evident that Tesla’s teams are developing something impressive. For now, we can only speculate, but we’ll be listening closely during the Q2 earnings call for any additional clues.
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The Q2 2025 Earnings Call provided us with a lot of information - and much of it related to FSD. There’s a lot of major news to unpack that impacts HW3 owners, AI4 owners, and future purchasers waiting for AI5.
Tesla addressed the previously promised upgrade for HW3 owners, talked about HW4 and also gave us dates of when to expect HW5 (AI5) and beyond.
The HW3 Upgrade
One of the biggest updates from the call was the clarification on the promised hardware upgrade for millions of owners with HW3 (AI3) vehicles. For those hoping for a path to the newer AI4 or future AI5 FSD computer, Tesla has confirmed that this upgrade is on hold until they can solve autonomy.
As we talked about in our HW3 upgrade article, Tesla will not consider offering such a complex and costly upgrade until after FSD Unsupervised is solved and becomes available to customer vehicles. The reasoning is that an upgrade could potentially involve more than just a simple computer swap, potentially requiring changes to other core vehicle components.
The key here is that the power and cooling requirements for HW4 hardware are far greater than those available in HW3 vehicles. If this trend continues with AI5, Tesla will need to build a customized solution for HW3 upgrades that falls somewhere in the middle - capable enough to perform FSD Unsupervised, but still able to fit within the required tolerances.
Camera Upgrades Might Be Needed
In addition, while Tesla has stated that they don’t intend to swap the cameras, this may become a requirement for two reasons. HW3 already has considerable difficulty reading signs, and HW4 is marginally better at doing so. Complex signs, such as “No Right Turn on Red,” could indicate that HW3 vehicles may require a camera upgrade, at least for the primary cameras, if not the side repeaters, bi-pillar, and rear cameras, to comply.
These changes will also require extensive rewiring, as the wiring in HW3 vehicles is not capable of the higher bandwidth required for higher-res cameras. The lack of future-proofing for HW3 vehicles is definitely becoming apparent here.
The second reason is the inclusion of the forward bumper camera on more of Tesla’s fleet. Today, every new vehicle except the Model 3 comes with a bumper camera. While Tesla does not use it for FSD yet, we believe that it will be necessary for low-speed maneuvers in crowded locations and parking lots - the key to making Summon and Banish truly autonomous.
Essentially, for the foreseeable future, HW3 vehicles will continue to be developed on a lagging, separate FSD software branch. Tesla intends to release updates for HW4 vehicles first, then take the time to optimize them, and then release updates for HW3 vehicles once they are ready. Realistically, while HW3 vehicles will still receive FSD updates, it seems that they have reached their physical operational limits and will not achieve the same performance or have all the same features as AI4 or future AI5 vehicles.
HW4’s Unsupervised Capabilities
The earnings call yesterday reinforced the capability of the current-generation HW4 hardware, which is included in all new Tesla vehicles. This is the same hardware that is powering the current Robotaxi FSD fleet that is currently operating and expanding in Austin. This confirms that HW4 is fully capable of supporting a true, driverless experience.
The question going forward will be what the limits of HW4 are, and how soon Tesla is approaching them. Will Tesla provide a smoother path to upgrade HW4 to AI5?
Given the ongoing situation with HW3, we don’t expect that they will. Tesla is contractually bound to provide Unsupervised FSD (autonomy) with the purchase of FSD, but it’s not required to upgrade vehicles so that they can achieve a higher level of safety and comfort. As long as a vehicle is capable of autonomy, then Tesla has met their commitment.
At this point, we don’t expect a clean upgrade path to AI5 - Elon has previously mentioned that it will consume nearly 2-3x the energy of AI4, which means an entirely new electrical and cooling package will be required for AI5, which AI4 vehicles won’t be able to easily support, short of a major retrofit.
However, if you want Unsupervised FSD and are satisfied with not getting a potential upgrade in the future, AI4 is a very compelling choice today. It is already demonstrably capable of Unsupervised FSD, which means you’re getting a vehicle that can and will do autonomy in the future.
If you’re still undecided about a purchase, a 48-month lease could be the most sensible option. Tesla is not intending to introduce AI5 until the end of 2026, and it will likely take months or years for the software divergence between HW4 and AI5 to occur.
AI5 is a Performance Jump; AI6 is a Leap
Tesla also provided the first concrete details on its next-generation FSD hardware, which will be known as AI5. The new computer is projected to be 3 to 5 times more capable than the already powerful HW4 hardware. That’s a massive leap in processing power, which will enable more complex neural networks and faster, more human-like decision-making.
This next-generation hardware isn’t expected to reach mass production until at least the end of 2026 - and the first vehicles receiving it will likely be Tesla’s Cybercab.
Going forward, Tesla intends to use AI6 as a means to closely integrate the training hardware and the vehicle hardware. That means that its Dojo supercomputer chip will live in AI6 vehicles. Two chips in a vehicle or on board an Optimus humanoid robot, while hundreds will live in a training cluster.
Tesla already uses HW4 hardware in Cortex, its Supercompute training cluster at Giga Texas. However, the vast majority of the training hardware is built around Nvidia’s H200 chip, which means Tesla needs to build the training software for the H200, then rebuild the trained models for HW4 hardware.
This change to Dojo training compute and Dojo in-vehicle compute means that Tesla will be able to further optimize the process, simplifying the entire training pipeline.
Closing One Door, Opening Another
The Q2 call was filled with interesting facts that drew solid lines in the sand for what Tesla’s future hardware path will look like. For owners of HW3 vehicles, the path to next-generation hardware is on hold, but at least there’s some clarity.
However, Tesla is offering FSD transfers in many regions worldwide, including North America and Europe, as a way to upgrade customers to newer vehicles equipped with hardware capable of running the latest FSD version.
For current HW4 owners, their vehicles are already equipped with the hardware capable of running in an Unsupervised future, and can look forward to support for at least another few years. In the future, Tesla vehicles will be equipped with even more powerful hardware, including AI5 in late 2026 or early 2027, and AI6 several years later.
If you missed any part of Tesla’s earnings call and its Q&A session, be sure to check out our recap, where we cover everything Tesla talked about, including FSD Unsupervised, the Robotaxi, and much more.
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