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I took a Tesla new Model Y Demo Drive – Here’s what I learned
The new Tesla Model Y has plenty of improvements that make it much better than its past version.
As the new Tesla Model Y arrived at a local showroom for Demo Drives, I swiftly signed up for one to compare the legacy model to what the company is hoping is an even better version of its best-selling vehicle. Coming off of a Legacy Model Y Demo Drive just two months ago, as I was planning to buy one, I had a good understanding of what was improved and what was not.
To make a long story short, I’m really happy I did not pull the trigger on the Legacy Model Y in February. The new Tesla Model Y is truly a much-improved version of what was already a great vehicle, and while I still think the Cybertruck is the best vehicle in Tesla’s lineup, the new ‘Juniper’ is right up there with it.
First Impressions
The first thing I really took note of was the massively changed exterior. The addition of the light bar on the front and the taillight bar that glows were two modernized designs that Tesla chose to implement on this vehicle.
While I never disliked the look of the Legacy Model Y, this is simply better. It’s more modern, slightly cleaner, and truly starts to give off the vibes of the Cybercab, which Tesla unveiled in October 2024.
Overall, the vehicle, in terms of dimensions, is not incredibly different from the past version. The look is really what changed here, and in my opinion, it’s for the better.
Fit and finish were really great. A quick inspection showed the car had been put together very well, and the Sales Advisor, who recently took a trip to Gigafactory Texas and viewed the new Model Y line, said Tesla has been really paying attention to the condition of these vehicles as they leave the factory.
Tesla had a very distinct focus on eliminating excessive panel gaps and aesthetic issues before they leave the factory.
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Interior Changes and Higher Quality Materials
In the past, I’ve been sort of hesitant to buy Teslas because, for $35,000+, I felt like some of the interior parts were cheap. Most notably, the sliders above the storage and cupholders and the center console were things I felt should be of higher quality.
This was a big improvement. All of the compartment doors and covers felt much better in terms of overall quality. Nothing was creaky or cheap feeling, and paying $41,000 for a car (after tax credit) should come with materials that are a much better quality.
The steering wheel had a good shape, and the bottom portion of it being flat was not anything crazy, but it was nice.
My favorite tidbit of information was regarding the ambient lighting. Tesla did not run it as far back on the doors in the new Model Y as it did in the Model 3 Highland. Also, many owners apparently complained about the reflection of the ambient lighting on the windshield when they were driving.
Tesla fixed this by covering the ambient lighting and pushing it into a nook that was designed for the lights specifically. There is no longer any reflection of the ambient lighting on the windshield, so it’s important to note that Tesla didn’t take the Highland interior and put it right inside the new Y.
Suspension Improvements Were the Best Part
By far, my favorite fixes were the suspension improvements. While the fixes to overall interior quality and the look are great, the feel when driving the car is truly more important.
The Model 3 Highland had a really great improvement from its past iteration, as I was able to test it with some spirited driving on Pennsylvania backroads. I felt the same way about the new Model Y. You can truly feel a lot of the things Tesla did to make the ride more comfortable in the new version of the crossover.
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The ride feels solid but not rigid. It handles things like bumps, potholes, and other inconsistencies really well. It was never uncomfortable; it felt very sporty and responsive and hugged tight corners at higher speeds.
Room and Comfort
The vehicle was very spacious, and I had a lot of legroom in the back. I also liked the feel of the driver’s seat, and I felt like I was sitting in the cockpit of something sportier than a crossover. It was really very nice, and the seats seemed to hug you.
As far as the rear, it felt spacious and comfortable, and I wouldn’t worry about being stuck back there on a road trip that was 6-7 hours long.
The rear seats are heated, but the middle seat is not. The rear screen also gives occupants in the back of the car something to do, and Tesla even enabled multiple Bluetooth headsets the ability to connect to that center screen.
Other Tidbits
The small improvements from the new Model 3 are what really make the Model Y a great car. The previously mentioned ambient lighting fix is something that is great.
One other thing I really liked was that the trunk privacy cover now has a dedicated storage area, which is seen in the indentations here:
The trunk cover can be folded and removed and placed in those indentations, as opposed to sitting on floor of the trunk, potentially being bent and damaged by whatever you have back there.
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This was one thing that was a nice touch.
Final Thoughts
All in all, I was very impressed with the new Model Y. It is undoubtedly better than what Tesla previously offered, and that car was the best-selling vehicle globally for two straight years. I would not be surprised to see many Legacy Model Y owners trade their cars in for this new version.
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- The new Tesla Model Y taillight with no light
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- The new Tesla Model Y taillight with taillight glow
There’s something to be said about a car that fits functionality and fun. The crossover design is popular because it offers so much more space than a sedan but is not the size of a massive, full-sized SUV.
The way this car drives is more like a sedan than a crossover, though, and how the suspension improvements really shine through is where this car is excellent and matches both the wants and needs of many.
While the Cybertruck is still my favorite Tesla to drive, the new Model Y is more accessible to more people and it truly was an awesome experience getting to run around in it for an afternoon.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
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Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
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High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
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Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
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However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
