Tesla is expected to move the Model 3 and Model Y to a steering wheel with touch-sensitive buttons
Tesla
According to Twitter user @ChrisZheng001, who has ties with the Tesla supply chain in China, the Model 3 and Model Y will be receiving a new steering wheel for the 2023 model year.
The new steering wheel will supposedly follow what has already been done with the new Model S; replacing the steering wheel stalks with touch-sensitive buttons on the steering wheel.
In a Model 3 or Model Y, the left stalk is mainly used for the vehicle's turn signals, but it can also be used to activate or flash the car's high beams. The button at the end of the stalk brings up the windshield wiper controls and wipes the windshield a single time.
As for the right stalk, it's used to shift gears, enable Autopilot and put the vehicle into park. The button can also be used to enable the vehicle's emergency brake by holding it down.
In the Model S, which the Model 3 and Model Y are likely to mimic, these functions are moved to the steering wheel and the touch screen.
The steering wheel will likely be similar to the one in the Model S. However, it'll likely be round since a major advantage of having a yoke steering wheel is to have a better view of the instrument cluster.
The upcoming steering wheel may be the one that's featured in the new Tesla Semi photos.
Like the Model S, the touch-sensitive buttons wrap around the outside of the scroll wheels on the steering wheel.
On the left side, you have the turn signals and high beam buttons, while on the right you have buttons for the windshield wipers and voice commands. On the Model 3, clicking the right scroll wheel starts a voice command, but in the Model S that's used to engage Autopilot.
There is also a button for the horn, however, unlike earlier versions of the Model S, the center of the steering wheel also functions as a horn.
Other functions that were previously available on the steering wheel stalks, such as shifting gears are moved to the center touch screen.
Since the buttons and their designs are fixed, you can't customize these buttons nor can Tesla change them through software updates.
I'd love to have seen tiny OLED screens for these buttons, similar to the Optimus keyboard that has a tiny screen for each key. That would leave room for customization or change down the road, although it would come at a cost and introduce additional complexity. Two things Tesla tries hard to reduce.
It's not clear whether existing vehicles with steering wheel stalks will also gain the ability to swipe to shift, but it's possible since Tesla could use the existing steering wheel stalks as a backup solution if the touch screen isn't working.
The backup solution in the Model S and likely future Model 3s and Model Ys are touch-sensitive gear buttons that appear underneath the wireless phone charger if the touch screen becomes unresponsive.
This upcoming change may be unexpected, but it's not surprising, as Tesla often tries to reduce costs by simplifying designs and processes. Tesla also tries to reuse as many parts throughout their models as possible. While the Model S and Model X use a different steering wheel, it looks like the Semi may utilize the same steering wheel as the Model 3 and Model Y.
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In this article, we’ll cover Tesla’s updates on Optimus, batteries, and Tesla Energy.
Optimus
Tesla has been working away on their humanoid robot and continues to make progress in software and hardware.
First, Tesla is preparing the Fremont factory for the Optimus pilot production line, which is scheduled for completion later this year. Once it is, wider deployments of Optimus for internal use within Tesla’s facilities are expected as well. Tesla aims to have several thousand Optimus units working in its North American factories by the end of the year once the pilot production line is operational.
Tesla’s goals for production remain extremely lofty - 1 million units per year by 2030. However, they could face some challenges when ramping production.
Key components like the shoulder actuators use specialized permanent and rare-earth magnets, which are currently sourced from China. Due to recent Chinese restrictions on the overseas sale of these magnets, Tesla is seeking an exemption or alternative suppliers. They have not yet looked into modifying the shoulder actuator but will likely do so if they cannot obtain the necessary materials.
Batteries
Batteries are another item that Tesla’s teams have been working on behind the scenes for years now. The second generation of the 4680 - the Cybercell - has been IRA-compliant for some time now. This means that the Cybertruck is eligible for the US Federal EV rebate.
Tesla also achieved the lowest cost-per-kWh of any of its cells with the 4680 battery - and it is potentially one of the cheapest cells being manufactured by any vehicle battery manufacturer at this point. With dry-cathode still being worked on, Tesla may be able to squeeze more optimizations and cost efficiencies from the 4680 cells.
Additionally, Tesla is progressing with its plans for lithium refining and cathode production in the US, both of which are scheduled to commence in 2025. While the company says they’re no longer supply-constrained for non-LFP vehicle batteries, on-shoring production and sourcing critical minerals from nations outside of China will be key.
LFP batteries continue to be supplied-constrained - namely for the Tesla Energy division. LFP batteries and their materials are sourced from China. Due to tariffs and limited exports, Tesla is can’t obtain enough and is considering potentially building an LFP production facility in North America.
Energy
Tesla’s energy division is still experiencing some of the highest growth of any of its divisions. Year over year, Tesla saw a 154% increase in energy storage deployments, including both Megapack and Powerwall - for a total of 10.4 GWh deployed in just Q1 2025. While deliveries in energy storage remain volatile due to the nature of Megapack installations, Tesla expects growth to continue rapidly in this segment.
Tesla also deployed 1GWh of Powerwall 3 residential storage this quarter, marking its strongest quarter. Powerwall 3 has received positive feedback from customers, many of whom appreciate its new capabilities with its built-in inverter for solar.
Megapack is continuing to see demand increases, currently highlighted by utility-scale Megapack systems, as well as data centers requiring stable power delivery. Megafactory Shanghai is also online now and producing Megapacks - with an annual production capacity of 20GWh today and up to 40GWh in the future. The site has also produced over 100 Megapacks this quarter, which are all awaiting delivery.
There was a lot of interesting news from Tesla’s Q1 2025 Earnings Call, covering everything from FSD and Robotaxi - to the less glamorous but equally important Megapack and Powerwall.
Tesla is heavily leaning into artificial intelligence, and its insurance offering is just another example of how it’s improving its product or lowering costs by leveraging AI.
Tesla recently started offering an insurance discount in select states when drivers use FSD for at least 50% of their drives and now it’s introducing an AI to help handle customer claims.
Tesla has developed an in-house voiced AI agent that can assist customers in handling simple support requests for Tesla Insurance.
For customers calling in from those states, the new AI agent provides a unique way to address the most common support calls. And it’s not just answering common questions but actually making requested changes to the owner’s account.
Policy Changes
The first key item is that it automates policy changes. Simple policy updates, including adjusting your deductible or coverage limits, are now done via AI. For policyholders who are simply looking to make quick changes and don’t have any questions, this makes the process a lot quicker by not having to wait for a representative. Tesla isn’t eliminating representatives, but this could reduce the number of representatives required or reduce wait times.
Continue Where You Left Off
The second item here, highlighted by Raj Jegannathan from Tesla’s internal IT team, is that Tesla’s AI agent is able to offer summaries of the user’s last interaction with Tesla Insurance. It will summarize your last interaction and provide assistance on that particular topic if you need to continue it. That means that you don’t have to wait for a human to review your file - the AI will kick off right where you left off.
Tesla appears to be focused on improving efficiency and making support more accessible. While actual items like claims are left up to humans due to their inherently complex nature, this helps free up employees to handle more complex items. While there’s no doubt Tesla will continue to develop this AI like they do everything else, we may soon see it take on even more tasks.
More AI
This isn’t the first AI agent that Tesla has demoed - there is now a chat-based AI sales agent available on the front page of Tesla’s website, which is able to answer common questions on Tesla vehicles.
Tesla has also been improving their AI support tool available in the Tesla App is able to provide feedback on common issues and also guide users towards either solving the problem or placing a support request.
Tesla’s strategy here is to influence the cost-heavy areas associated with having humans address simple requests and instead leverage AI, which can offer instant answers and reduce support costs.
Roll Out to More States
While this new AI is currently limited to just 12 states, it is likely to follow Tesla Insurance’s expansion. Insurance seems to have been at a bit of a standstill lately. Tesla continues to improve features such as the improvements to Safety Score V2.2, but we haven’t seen Tesla roll out support to new states since it added Minnesota in November of 2022.
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