The way I understand it.
If you have AP2 or AP2.5, and you have FSD, you'll get the AP3 hardware upgrade for free when it becomes available. The schedule of installs will be very long. We also heard Elon mention that the AP3 hardware upgrade is a simple upgrade. Replace the current unit with the new unit. It's behind the glove box.
In fact if you remove the side panel when the front doors are open, you can actually see it sitting right there.
Elon even mentioned that this can be done by Mobile Service. I assume that once it's done, they will (1) Upgrade to the latest TeslaOS, and (2) update your Option Code to reflect AP3 for FSD.