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Tesla will produce AWD Model 3 Performance before dual-motor only version
Elon Musk recently announced that Tesla would be prioritizing the production of the AWD Model 3 Performance over the regular dual-motor variant of the compact electric car.
In an update on Monday, Musk responded to one of his Twitter followers who inquired if Tesla would only produce the AWD Model 3 Performance in July. According to Musk, rolling out the Performance version before the regular AWD variant would ensure that the company does not incur negative margins on the Model 3.
Yes, AWD P first and then AWD. Production costs are always high when line first gets going, so we have to sell higher price versions first or each car will have very negative margins. As production efficiency rises, we can make lower cost versions & not lose money.
— Elon Musk (@elonmusk) May 29, 2018
Musk’s emphasis on the company’s profitability has been particularly notable during the past few months. Back in April, Musk responded to an article from The Economist which predicted that Tesla would need to raise $2.5-$3 billion this year. According to Musk’s response, Tesla would not need to raise any money this year because the company would be profitable in the third or fourth quarter. Musk reiterated this statement during Tesla’s Q1 2018 earnings call.
As a means to achieve profitability, Tesla needs to optimize the production of the Model 3. In a tweet earlier this month, Musk noted that Tesla is prioritizing the Model 3’s higher-priced versions in order to smooth out cash flow and achieve target cost. Musk further added that if Tesla opted to jump immediately to the production of the Model 3’s $35,000 standard-range RWD variant, Tesla would “ lose money and die.”
With production, 1st you need achieve target rate & then smooth out flow to achieve target cost. Shipping min cost Model 3 right away wd cause Tesla to lose money & die. Need 3 to 6 months after 5k/wk to ship $35k Tesla & live.
— Elon Musk (@elonmusk) May 21, 2018
Back in April, Elon Musk stated that the AWD dual-motor version of the Model would start production in July. Musk also noted that the white seats option — a popular configuration for the Model S and Model X — would probably be available for the compact electric car around the same time. Musk stated, however, that Tesla would have to hit a steady production rate of 5,000 Model 3 per week before it could start offering new options to reservation holders.
These new options ultimately got revealed this May, when Musk opened orders for the Model 3’s Performance and AWD versions. The two new variants are pricier than the first production long-range RWD Model 3, with the long-term AWD option costing an additional $5,000 and the Performance variant costing $78,000 with all options except Autopilot. A batch of configuration invites for the vehicles went out last week.
The two vehicles provide better performance over the RWD Model 3, with the AWD version having a 0-60 mph time of 4.5 seconds. The Performance Model 3, which automatically comes with AWD, is a whole new beast, with a top speed of 155 mph and a 0-60 mph time of 3.5 seconds. Musk further stated that the Model 3 Performance would be 15% faster than a BMW M3 on a track.
For now, Model 3 reservation holders who would like to purchase the regular AWD variant would have to wait a little bit more before their vehicles are manufactured. By July, however, the auto world would see exactly how the most powerful Model 3 in Tesla’s lineup compares to its competitors.
Elon Musk
Tesla confirmed HW3 can’t do Unsupervised FSD but there’s more to the story
Tesla confirmed HW3 vehicles cannot run unsupervised FSD, replacing its free upgrade promise with a discounted trade-in.
Tesla has officially confirmed that early vehicles with its Autopilot Hardware 3 (HW3) will not be capable of unsupervised Full Self-Driving, while extending a path forward for legacy owners through a discounted trade-in program. The announcement came by way of Elon Musk in today’s Tesla Q1 2026 earnings call.
🚨 Our LIVE updates on the Tesla Earnings Call will take place here in a thread 🧵
Follow along below: pic.twitter.com/hzJeBitzJU
— TESLARATI (@Teslarati) April 22, 2026
The history here matters. HW3 launched in April 2019, and Tesla sold Full Self-Driving packages to owners on the understanding that the hardware was sufficient for full autonomy. Some owners paid between $8,000 and $15,000 for FSD during that period. For years, as FSD’s AI models grew more demanding, HW3 vehicles fell progressively further behind, eventually landing on FSD v12.6 in January 2025 while AI4 vehicles moved to v13 and then v14. When Musk acknowledged in January 2025 that HW3 simply could not reach unsupervised operation, and alluded to a difficult hardware retrofit.
The near-term offering is more concrete. Tesla’s head of Autopilot Ashok Elluswamy confirmed on today’s call that a V14-lite will be coming to HW3 vehicles in late June, bringing all the V14 features currently running on AI4 hardware. That is a meaningful software update for owners who have been frozen at v12.6 for over a year, and it represents genuine effort to keep older hardware relevant. Unsupervised FSD for vehicles is now targeted for Q4 2026 at the earliest, with Musk describing it as a gradual, geography-limited rollout.
For HW3 owners, the over-the-air V14-lite update is welcomed, and the discounted trade-in path at least acknowledges an old obligation. What happens next with the trade-in pricing will define how this chapter ultimately gets written. If Tesla prices the hardware path fairly, acknowledges what early adopters are owed, and delivers V14-lite on the June timeline it committed to today, it has a real opportunity to convert one of the longest-running sore subjects among early adopters into a loyalty story.
Elon Musk
Tesla isn’t joking about building Optimus at an industrial scale: Here we go
Tesla’s Optimus factory in Texas targets 10 million robots yearly, with 5.2 million square feet under construction.
Tesla’s Q1 2026 Update Letter, released today, confirms that first generation Optimus production lines are now well underway at its Fremont, California factory, with a pilot line targeting one million robots per year to start. Of bigger note is a shared aerial image of a large piece of land adjacent to Gigafactory Texas, that Tesla has prominently labeled “Optimus factory site preparation.”
Permit documents show Tesla is seeking to add over 5.2 million square feet of new building space to the Giga Texas North Campus by the end of 2026, at an estimated construction investment of $5 billion to $10 billion. The longer term production target for that facility is 10 million Optimus units per year. Giga Texas already sits on 2,500 acres with over 10 million square feet of existing factory floor, and the North Campus expansion is being built to support multiple projects, including the dedicated Optimus factory, the Terafab chip fabrication facility (a joint Tesla/SpaceX/xAI venture), a Cybercab test track, road infrastructure, and supporting facilities.
Credit: TESLA
Texas makes strategic sense beyond the existing infrastructure. The state’s tax structure, lower labor costs relative to California, and the proximity to Tesla’s AI training cluster Cortex 1 and 2, both located at Giga Texas and now totaling over 230,000 H100 equivalent GPUs, means the Optimus software stack and the factory producing the hardware will share the same campus. Tesla’s Q1 report also confirmed completion of the AI5 chip tape out in April, the inference processor designed specifically to power Optimus units in the field.
As Teslarati reported, the Texas facility is intended to house Optimus V4 production at full scale. Musk told the World Economic Forum in January that Tesla plans to sell Optimus to the public by end of 2027 at a price between $20,000 and $30,000, stating, “I think everyone on earth is going to have one and want one.” He has previously pegged long term demand for general purpose humanoid robots at over 20 billion units globally, citing both consumer and industrial use cases.
Tesla (NASDAQ: TSLA) reported its earnings for the first quarter of 2026 on Wednesday afternoon. Here’s what the company reported compared to what Wall Street analysts expected.
The earnings results come after Tesla reported a miss on vehicle deliveries for the first quarter, delivering 358,023 vehicles and building 408,386 cars during the three-month span.
As Tesla transitions more toward AI and sees itself as less of a car company, expectations for deliveries will begin to become less of a central point in the consensus of how the quarter is perceived.
Nevertheless, Tesla is leaning on its strong foundation as a car company to carry forward its AI ambitions. The first quarter is a good ground layer for the rest of the year.
Tesla Q1 2026 Earnings Results
Tesla’s Earnings Results are as follows:
- Non-GAAP EPS – $0.41 Reported vs. $0.36 Expected
- Revenues – $22.387 billion vs. $22.35 billion Expected
- Free Cash Flow – $1.444 billion
- Profit – $4.72 billion
Tesla beat analyst expectations, so it will be interesting to see how the stock responds. IN the past, we’ve seen Tesla beat analyst expectations considerably, followed by a sharp drop in stock price.
On the same token, we’ve seen Tesla miss and the stock price go up the following trading session.
Tesla will hold its Q1 2026 Earnings Call in about 90 minutes at 5:30 p.m. on the East Coast. Remarks will be made by CEO Elon Musk and other executives, who will shed some light on the investor questions that we covered earlier this week.
You can stream it below. Additionally, we will be doing our Live Blog on X and Facebook.
Q1 2026 Earnings Call at 4:30pm CT https://t.co/pkYIaGJ32y
— Tesla (@Tesla) April 22, 2026
Tesla confirmed HW3 can’t do Unsupervised FSD but there’s more to the story
Tesla isn’t joking about building Optimus at an industrial scale: Here we go
