Tesla's Model 3 is going to go through some of its biggest changes this year
Tesla
Tesla has been working on a revamp of one of its most popular vehicles, the Model 3. The project is codenamed Project Highland and the vehicle will see the most profound changes since it launched in 2017.
Despite Tesla keeping the car under wraps for months, we now have early information on the major changes coming to the best-selling electric vehicle of all time. Thanks to a trusted insider, we can confirm and provide more information about Tesla's plans for the car. Inside and out, the Highland will change.
Redesigned Headlights
Caped Model 3s have been spotted with the front bumper, rear end and dash covered. However, more recently the incognito Model 3 also had its headlights covered. The headlight openings that were clear before were now covered in what appeared to be duct tape. Turns out there is a good reason for this. The Model 3 revamp will include redesigned headlights. The new headlights will be a different shape than they are today. Tesla has been providing some models with matrix headlights, but they have yet to be enabled through software yet. Tesla will continue to offer matrix headlights through this redesign, although it's not clear whether they'll be enabled at launch either.
The revamped Model 3 is known internally as Project Highland
The Kilowatts/Twitter
Bumper Camera
A new shape of headlights also means a new front bumper. There has been a lot of speculation that the front of the car is changing after recent images show a smoother front end. Tesla is always looking for more aerodynamics to improve the drag coefficient. However, there's another good reason for redesigning a new front bumper. The front bumper will now house a single camera in the center area of the lower-vent area of the bumper.
The Cybertruck will have a camera in the center of the front bumper
Sofiaan/Twitter
Since the company removed USS, people have been wondering how the car will detect objects in what's considered a camera blind spot directly in front of the vehicle. Now we know.
Rear Bumper
The rear bumper of the vehicle is also being redesigned, although it's not clear why. We don't expect the rear camera to change position and there won't be additional cameras in the rear of the vehicle. The new rear bumper could just be to 'refresh' the car or may have cost-saving measures.
Mirrors
Updated mirrors are also joining the party. We're told that they will receive a very minor 'refresh' and will look very similar to the way they do today. It's not clear whether Tesla is changing them to match other areas of the vehicle better or to streamline manufacturing, but we've been told to expect a minor change.
Additional Cameras
Tesla recently launched hardware 4.0 on Model S and Model X cars, although many were surprised to learn that the new vehicles feature the same number of cameras as HW 3 vehicles, when hardware 4 allows for more cameras. This is where Project Highland comes in.
We can now say that more cameras will indeed be used in Project Highland. There will be three new cameras in all, one in the center of the front bumper as we discussed earlier, and two more on the sides of the vehicle.
The fender camera housing will now contain two cameras each. One will face backward as it does now, while the other will point in the other direction. It's not clear how the new camera will be oriented, but we speculate that they will be aimed off to the side to give the car a better view at certain intersections.
Some road junctions have objects such as buildings or bushes that can make it difficult for the vehicle to see with its B-pillar cameras. This often causes the vehicle to creep forward in order to gain enough visibility to proceed. Creeping too far forward sometimes causes the vehicle to be in a poor situation, where it has entered the path of other vehicles. These new cameras are likely aimed at solving this problem.
As previously reported, the repeater camera housing on the front fenders appears to be changing. It now appears to include a line that goes further back than the original. This could be part of the new design.
Project Highland will ship with Tesla's latest supercomputer, Hardware 4. The cameras themselves are expected to be the same cameras featured on HW4 Model S and Model X vehicles. They're estimated to be 5-megapixel cameras with an anti-glare coating. These cameras are significantly more advanced than the current 1.2-megapixel cameras in current HW 3 vehicles.
With the new front bumper cameras and the two additional side cameras, Tesla may now have everything it needs in order to provide a real birds-eye view that is often seen in many vehicles.
Sensors
In order to cut costs, Tesla is removing the vehicle's temperature sensor that is used to detect the temperature outside of the vehicle. Instead of using a temperature sensor, the vehicle will determine the exterior temperature based on its GPS location and weather data. This could lead to more accurate temperatures being displayed, as wind or other environmental factors can sometimes cause inaccuracies. However, owners will lose the ability to view the temperature in their immediate location, such as their garage.
Tesla is also making improvements to its GPS module which is expected to provide a more accurate location. In August 2022, Tesla applied for a patent on a multi-band Global Navigation Satellite System (GNSS) antenna. Various types of satellites and networks can be used to identify an object's location. GPS is just one of those networks. This new system allows Tesla to use other networks, besides GPS, in order to identify the vehicle's location. This could lead to faster location detection or higher precision.
Interior
Inside the vehicle, there will be some changes as well. However, don't expect a major refresh as we saw with the 2021 Model S, but it will still be noticeable. The wood trim is being removed and replaced with a fabric finish, possibly Alcantara fabric that Tesla already uses in the Model S and X.
The vehicle's dash will also receive a facelift, but we weren't given any details on what's changing with it. Again, this could be a way to simplify the manufacturing process instead of offering something new and improved.
There may be other interior changes, but these are expected to be the two bigger differences. We've been told that this refresh will be 'minor' and focuses on cost-cutting, however, it appears that Tesla is taking the time to upgrade the vehicle to its newest hardware and introduce new cameras, which will certainly be a highlight of the vehicle.
The Model Y project, codenamed Juniper is already underway as well, although it's expected to arrive after the Model 3 revamp. We expect the Model Y to undergo many of the same changes that we've outlined here.
Release Date
Overall, the Model 3 Highland's updates show that Tesla is always looking for ways to improve its vehicles and stay ahead of the competition. As is the nature of these things, some items could be subject to change. With these changes, the Model 3 will continue its success as one of the most popular electric vehicles on the market. Production for the vehicle is expected to start in the third quarter.
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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.
Tesla has released an official LED light strip upgrade for the frunk of the Model 3 and Model Y in the U.S. and Canada. The light strip, priced at $100 USD ($130 CAD), is a great addition to light up one of the most useful storage areas of an EV.
According to Tesla, the new light strip is designed for easy installation by the customer. The light strip connects directly to the vehicle’s power supply using an included adapter, eliminating the need for batteries or wiring harnesses. That makes this a clean OEM setup without the hassle of needing a separate power source.
The light is built to last, and is equipped with a constant current control module and an IP67 dustproof and waterproof rating on both the light itself as well as the adapter, so you don’t need to worry about it getting wet in the rain if you happen to leave your frunk open.
Not a Tesla App
Vehicle Compatibility
The new frunk light strip is available for all Model 3 and Model Y vehicles from model years 2020 to 2024, so it does exclude earlier Model 3s.
For newer vehicles, a revised version of the light strip is being developed, compatible with the updated wiring harness of 2025 and 2026 Model 3 and Model Y vehicles.
The revised version is already available on Tesla’s shop in China, which means its release in North America is likely not too far away.
Sign of More to Come?
This isn’t the first time Tesla has made an OEM version of a popular third-party accessory, such as the custom puddle lights. Another popular third-party accessory is a powered frunk add-on.
Currently, the Cybertruck is the only Tesla vehicle with a powered frunk, and getting an official modification that won’t risk denting your hood would be amazing to see. It would also greatly improve the utility of the frunk, as many people avoid opening it since it has to be manually closed.
This new accessory is a welcome addition to the lineup of accessories for owners looking for a simple and high-quality add-on for their Tesla and and we’re hoping to see more of this in the future.
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