Tesla Model 3 Update: Project Highland Promises to Reinvigorate the Iconic Electric Vehicle

Under the name of Project Highland, Tesla is developing the second generation of the Model 3, a renewed version that will reduce production costs and recover the attractiveness - somehow lost - during the five years it has been on the market.

The Tesla Model 3 will receive a major update that aims to reduce its production costs, as well as make it more attractive and recover the logical decline in demand that it has suffered during the five years it has been on the market. Among the objectives of this second generation: improve its performance, reduce the number of components, and moderate the complexity of the parts that make it up. The Model 3 redesign project has been code-named "Highland" and is expected to go into production in the third quarter of 2023.

Those who buy a Tesla Model 3 as of today - 2022 - get virtually the same electric car that went on sale in back July 2017. The Model 3's bodywork and mechanical components haven't actually changed much since it was launched over five years ago. Even though, the software that manages the car has indeed been modified thanks to several updates, which have improved the performance of the battery and the electric motors, in turn resulting in greater range. There are also modifications to the FSD autonomous driving software, which has been reviewed and updated regularly during these five past years.

But five years is really a long time in the automotive industry, so almost all models receive the so-called mid-life update (a basic restyling) to make way a few years later for a new generation. Tesla believes that the time has come to face this change, so the Model 3 will receive a major update aimed at reducing production costs and making it more attractive to car buyers, according to Reuters; this is not based on official information but in sources "with knowledge of Tesla's plans", who have preferred to remain anonymous. Tesla has not made any official announcement for now.

The Model 3 redesign project is code-named "Highland". Tesla aims to improve performance and reduce the number of its components and also its mechanical complexity, as well as satisfying the demands of customers for its operation as a regular electric car, and for the functions of the infotainment system, that are managed through the central touch screen.

The redesign of the Model 3 will also help Tesla to face the competition that in recent years has won a lot of space in the segment in which this electric sedan is included. The redesigned Model 3 will be built at both Tesla's Fremont, California, and Giga Shanghai factories, according to Reuters. Tesla aims to start production of the new Model 3 in the third quarter of 2023 in China, that is, it could reach its first owners in 2024. However, no information about the dates of its entry into production in Fremont or at Giga Berlin is mentioned.

The redesign of the Model 3 will build on the facelift of the Model S and Model X that Tesla launched last year. The conventional steering wheel was eliminated and a new, highly controversial, yoke-type was incorporated, in which in addition to the ring, the levers were replaced by tactile buttons. The information screens were also modified, with the central touch screen having a horizontal format.

The Tesla Model 3 is Tesla's cheapest electric vehicle; it is also the best-seller in its range, although it is now being surpassed by the Model Y. With only four models in its catalogue, the changes the manufacturer makes to them have much more impact than those made by traditional car manufacturers.

According to Ed Kim, president of AutoPacific Group, a consultancy that tracks market trends, “The upcoming changes that potential customers can see and feel will be very important to ensure they keep Tesla in mind as alternatives are starting to flood the market".

Elon Musk, CEO of Tesla, is clearly working to simplify the design and production of his electric cars. The firm has pioneered the use of large casting machines (Giga Press), built by IDRA Group in Italy, to manufacture larger parts and thus reduce assembly costs and at the same time speed up production. It has also designed a structural battery pack that dispenses with modules, increases space for active material, and reduces battery cost. "Over and over again, we found pieces that weren't needed. They were put there just in case or by mistake. We removed multiple pieces that didn't do anything", Musk explained in an interview.

This approach is part of the reason Tesla is the most profitable EV maker, while many of its rivals continue to run at a loss. The updates to the Model 3 will be necessary to maintain its position on the market in the face of competition, and also to continue being the leader in the electric vehicle market. Whatever the changes, Tesla hopes that this second generation of the Model 3 will help it reduce costs and boost the attractiveness of its iconic electric vehicle.

Source: reuters

All images courtesy of Tesla Inc.

Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.