Tesla's Project Highland will see the Model 3 get revamped
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We're nearing the end of the second quarter, and Tesla is pulling out all the stops to clear out the existing inventory of Model 3s. The buzz is intensifying about the anticipated Project Highland, Tesla's substantial redesign of the Model 3, which is speculated to commence production as early as the third quarter.
What was once a hush-hush project has now become a badly-kept secret, with rumors and piecemeal evidence sparking widespread excitement and curiosity. Here's a compilation of everything we know about the impending changes.
Exterior Overhaul: Function Meets Design
Tesla's upcoming Project Highland stands to redefine the exterior aesthetics of the Model 3, pushing the boundaries of design innovation. The most striking changes, as suggested by leaked images, include reimagining the headlights into a sleeker, more streamlined form, enhancing the car's modern appeal.
Interestingly, there are no apparent fog lights in the new design, sparking curiosity about whether they've been integrated into the headlights or entirely phased out. Further, the front bumper sees a notable transformation, with the absence of ultrasonic sensors hinting at Tesla's continued emphasis on vision-based assistance.
Alterations extend to the side mirrors, appearing slightly slimmer, and the conspicuous lack of the "T" logo on the hood aligns with Tesla's move towards reduced branding. Changes continue to the rear with a redesigned bumper and repositioned reverse lights, both indicative of a refreshed look and potential cost efficiencies.
Introducing a new front bumper camera aimed at improving blind spot visibility, along with potentially additional side cameras, demonstrate Tesla's commitment to enhancing driver safety and convenience.
Interior Innovation: Redefining Luxury and Practicality
Revamping the Model 3's interior, Tesla's Project Highland removes the iconic wood dashboard inlay, swapping it for a more modern aesthetic with the possibility of materials such as alcantara fabric, carbon fiber or brushed metal. A noteworthy addition is the supposed installation of ventilated seats — these enhance the comfort quotient, providing temperature adaptability for varying climates.
An upgraded sound system is also on the horizon, aiming to enhance the auditory experience with a more immersive sound. Improved ambient lighting within the cabin is rumored as well, adding a soothing aura to night-time drives.
Driving Revolution: The Advent of Smart Shift
Shifting gears, both literally and figuratively, in a potentially revolutionary move, Tesla may be ditching the traditional gear stalks in favor of on-screen controls for transitioning between park, reverse, and drive modes. If rumors prove accurate, this 'Smart Shift' technology could signify a paradigm shift in vehicular control interfaces, offering a futuristic and user-friendly experience that could redefine the very act of driving.
As all signs point to a fast-approaching launch, Project Highland is shaping up to be a testament to Tesla's unyielding dedication to pioneering advancements. The proposed significant transformations — an aesthetic reinvention, superior technology integrations, a luxurious and pragmatic interior, and a ground-breaking driving interface — underline Tesla's resolve in pushing the envelope of what's possible in electric mobility. As anticipation continues to mount, it's clear that Project Highland isn't just a worst-kept secret; it's a bold glimpse into the exciting future of Tesla's sustainable transport vision.
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A recent sighting at Giga Texas by drone operator and detail hound Joe Tegtmeyer has really caught our eye. A red Model Y was driving within the factory premises with its front and rear sections heavily camouflaged in Tesla’s standard black coverings. To top it off, there wasn’t just one, but two vehicles.
Tesla usually conceals vehicles when it has something to hide or test, and this timing suggests to us that a new variant of the world’s best-selling SUV is on its way. This leads us to two theories - a refreshed Model Y Performance or the anticipated, more affordable E41 Model Y.
Caught something interesting today … two heavily camouflaged cars driving on the W side of Giga Texas. Several viewers noted this in my short video on the autonomous drive.
— Joe Tegtmeyer 🚀 🤠🛸😎 (@JoeTegtmeyer) May 14, 2025
The front fascia, headlights, and hood are almost entirely obscured, with similar coverings applied to the rear, hiding the taillight design and bumper. This is a classic practice to keep new design elements under wraps before an official unveiling, and this is exactly what we saw with the Model 3 Highland and Model Y Juniper projects. The rest of the vehicle, including the central body and roofline, appear fairly consistent with the current Model Y.
Refreshed Model Y Performance?
One compelling possibility is that Tesla is preparing for the launch of the refreshed Model Y Performance. This speculation gains traction when we look at the launch of the refreshed Model 3 Performance. The Performance variant launched several months after the Long Range AWD and RWD variants and came with a bespoke front fascia. That fascia included air ducts for improved aerodynamics and brake cooling, helping to differentiate it both visually and by performance from other refreshed Model 3s.
It stands to reason that Tesla is preparing to launch the refreshed Model Y Performance. The extensive covering on the front fascia could be hiding a more aggressive, aerodynamically optimized bumper and air ducts to match the Model 3 Performance.
More Affordable Model Y?
Alternatively, this mystery vehicle could be the prototype of the previously discussed affordable variant of the Model Y, known as E41. Tesla has been working on further cost reductions for its highest volume vehicle, which includes cost-cutting components and features, as well as working on manufacturing efficiencies.
Tesla is focusing on making its existing models, like the Model Y, more affordable. In this case, the camouflage might be concealing simplified exterior features designed to help reduce production costs. This could include a revised front-end design, along with different headlights or taillight assemblies. Tesla could even forgo the distinctive front lightbar, as well as the afterburner-style rear lightbar, if it contributes to worthwhile savings.
This would be a step beyond the recently introduced Model Y Long Range RWD, which improves the vehicle’s range and lower the price by $4,000.
For now, the identity of this camouflaged Model Y remains a mystery. The fact that it is out and about at Giga Texas suggests that whatever changes Tesla has incorporated are significant enough to warrant covering up the front and rear of the vehicle.
Tesla’s FSD has made some truly incredible strides since V11, and since FSD V12.5, the experience has been hands-free for vehicles with a cabin camera.
However, a persistent point of frustration for many users is the strictness of the Driver Monitoring System (DMS), often referred to as the “nag.” In a recent interaction on X, Mike P detailed his grievances about how strict the DMS was.
This post drew a response from Elon Musk, who said, “You’re right.” Just a few days and a relatively unassuming point release later, Tesla has already decided to take action to improve its DMS.
The core issue here, which many who use FSD can attest to, isn’t about wanting to be irresponsible. Instead, it is about the current system’s sensitivity. The DMS can feel overly punitive for brief, normal interactions with the vehicle’s center display.
User Experience Woes
Mike P’s experience was common - you can’t even glance at the display to change the song or add a nav stop without the DMS warning you to pay attention.
If you continue, then you risk receiving a FSD strike. This leads to most drivers disabling FSD and typing their destination in while manually driving. For the casual observer, you can tell that it is clearly far more dangerous.
This highlights a safety paradox: a system designed to ensure attentiveness can sometimes lead to less safe workarounds. One must acknowledge that Tesla is in an odd position, being incredibly cautious about safety and ensuring it stays within NHTSA guidelines. However, the nag today is overkill in some situations, such as glancing at the center screen.
Tesla Confirms Change
Musk’s relatively concise answer resonated with his previous outlook on the matter. During Tesla’s Q1 2025 Earnings Call, he acknowledged that the DMS can be too strict and mentioned that Tesla is actively looking into ways to loosen those restrictions. He also pointed out the irony between the current system encouraging users to disengage FSD for simple tasks, only to re-engage it moments later - a less-than-safe cycle.
In a post on X, Ashok Elluswamy, Tesla’s VP of Autopilot AI, delivered welcome news. He confirmed that the latest FSD update, V13.2.9, includes a loosening of the cabin camera nag. This is an undocumented change, and one that we’re very excited to see.
This undocumented change is the latest step in Tesla’s overall plan forward Unsupervised FSD, which would drop the DMS completely. Previous updates, like the shift to vision-based driver attention monitoring in V12.4 and V12.5, aimed to balance safety with user experience.
What Does This Mean?
While the full extent of changes in V13.2.9 will become clearer as Software Update 2025.14.6 rolls out to more FSD users, the confirmation of loosened cabin camera nag suggests a few things.
This likely means greater tolerance for brief glances at the screen for essential tasks, whether it be adjusting climate settings, inputting a nav destination, or changing the current song. It could also include a potentially more forgiving threshold for looking away, especially in low-speed scenarios. The DMS does not ding you for using the display or looking away while the vehicle is waiting at a red light today, but Tesla could expand this to driving under 10 mph (16 km/h).
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