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Tesla says factory upgrades are coming as new Model 3 ‘Highland’ sightings continue

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Tesla said during its Q2 2023 Earnings Call that factory upgrades would occur during Q3, potentially causing a slight decrease in production as the company prepares to launch a new and revised version of the Model 3, known as “Project Highland.”

After Tesla produced 479,700 cars and delivered 466,140 of them in Q2, CEO Elon Musk told investors they should be ready to expect lower-than-normal production figures for Q3 as Summer shutdowns of some of the automaker’s factories would occur.

Musk said:

“We continue to target 1.8 million vehicle deliveries this year. Although, we expect that Q3 production will be

Zachary Kirkhorn, Tesla’s CFO, reiterated the comments:

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“As we look forward to the rest of the year, I want to reiterate Elon’s comments on Q3 volumes driven by planned downtimes for factory upgrades. These upgrades will also carry some amount of factory idle cost. However, we are working to minimize as much as possible.”

The shutdowns are related to an upgrade of production equipment and perhaps retooling. Teslarati has covered various developments at the Fremont Factory, including efforts to retool several production lines and make upgrades to the plant.

Highland Sightings Continue

The comments Tesla executives made incited more speculation regarding the Model 3’s next iteration, known as “Project Highland.”

While the exact updates of the Highland Model 3 and what Tesla plans to improve on are not necessarily known, we do know that the design of the vehicle is set for a change.

However, more sightings of the vehicle continue to appear online as Tesla is evidently testing some of the performance features of the Model 3 Highland.

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Most recently, a sighting of the car was shared on the r/TeslaMotors subreddit.

Project Highland Spotted
by u/gio6a in teslamotors

With the factory upgrades being “sort of global factory upgrades,” as Musk called them, we can estimate Tesla is likely preparing for the Model 3’s updated design by bringing factories up to date with new production equipment.

The Model 3 is built in Fremont and Shanghai, and there have been rumors of the vehicle being introduced in the Chinese market first. However, we know Fremont is undergoing an overhaul, but it is unconfirmed whether these line upgrades are for the Model 3 Highland.

Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla to open source Model S and Model X designs and software

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Credit: Tesla

In a move echoing its earlier commitment to open innovation, Tesla CEO Elon Musk announced recently that the company plans to make the design and software of its Model S and Model X fully open source.

This follows the same approach Tesla took with its original Roadster, releasing all available design, engineering, and diagnostic materials in November 2023 so that “whatever we have, you now have.”

The Model S, introduced in 2012, was Tesla’s first mass-produced vehicle and a groundbreaking luxury electric sedan. It offered impressive range, rapid acceleration, and over-the-air software updates that redefined expectations for electric cars.

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The Model X, launched in 2015, built on that foundation as a high-performance electric SUV notable for its distinctive falcon-wing doors, spacious interior, and advanced safety features. Both models served as flagships that helped establish Tesla as a leader in the EV industry and popularized long-range battery-electric vehicles.

Production of the Model S and Model X was wound down earlier in 2026, with manufacturing ending in the second quarter. Tesla redirected the Fremont factory space previously used for these vehicles toward higher-priority projects, including Optimus humanoid robots and the Cybercab autonomous vehicle.

By the time of Musk’s open-source announcement, custom orders had closed and only remaining inventory was available.

Open-sourcing the designs and software offers several clear advantages. Owners of these aging but still capable vehicles gain better access to technical documentation, diagnostic tools, and software resources, making independent repairs and modifications easier and more affordable.

Independent repair shops and third-party specialists can support the large existing fleet without relying solely on Tesla’s service network. Enthusiasts and engineers can study real-world implementations of Tesla’s battery, powertrain, and software systems, potentially accelerating broader industry progress in electric mobility.

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The step aligns with Tesla’s 2014 patent pledge and its overall mission to advance sustainable transport by sharing hard-won knowledge rather than locking it behind proprietary walls.

By releasing these materials now that the models have left production, Tesla ensures continued support for its early adopters while freeing internal resources for future technologies. The open-source release of the original Roadster already enabled simulations, community projects, and deeper technical understanding.

Extending that practice to the Model S and Model X should deliver similar benefits on a larger scale, helping keep these influential vehicles relevant and repairable for years to come

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Tesla flexes incredible Robotaxi metric that skeptics will hate

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Credit: Tesla

Tesla flexed one incredible Robotaxi metric during the Q2 Earnings Call that skeptics have to hate to hear. The company’s platform has already driven more than 380,000 miles of unsupervised ride-hailing across several states with no notable incidents.

During the company’s Q2 Earnings Call on Wednesday, Vice President of AI, Ashok Elluswamy, said:

“First of all, I’d like to state that the Robotaxi program has been operating extremely well. Especially in terms of safety, the program has had an impeccable safety record. We have driven more than 380,000 miles of unsupervised Robotaxi, now across six cities in two different states. We have had zero notable incidents. Any reports have been of other actors impacting us when we were stationary. I like to emphasize how safe the operation has been so far. Zero notable incidents over 380,000 miles.”

Elluswamy’s claim over Robotaxi miles is a significant milestone for Tesla in the grand scheme, especially considering this is a sizeable number of miles without any incident.

Tesla’s self-driving approach is much different than that of other companies. Tesla has maintained that vision is the only thing needed to have a solid and effective self-driving suite. Many self-driving companies utilize things like LiDAR, sensors, and other elements to improve performance, but Elluswamy sent a jab at those who believe it’s needed.

“Historically, the so-called experts have always claimed that you need LiDARs, radars, HD maps, and the entire kitchen sink to drive safely. Here we show that such is not true. You can have safe, comfortable, and affordable autonomy with just cameras. This record should be a huge validation of Tesla’s entire AI approach.”

The feat of accumulating this many miles without any driver behind the wheel is impressive. The thing is, Tesla is also doing this across several different locations, with varying traffic rules, pedestrian levels, weather patterns, and other important factors.

While Tesla is not ready to roll out an unsupervised platform completely, it is a slow but steady indication that the company is well on its way to figuring things out.

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The company’s attitude toward expansion is slow, safe, and controlled, and despite this huge milestone, it will still be some time until we see Tesla truly unleash unsupervised rides more aggressively.

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SpaceX Starship just nailed something it’s never done before

SpaceX’s Starship flew successfully Friday, landing both stages and deploying its first Starlink V3 satellites.

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Starship’s thirteenth test flight delivered exactly what SpaceX needed with a clean liftoff, two successful stage recoveries, and the first real payload the vehicle has ever carried to space. Booster 20 and Ship 40 lifted off at 5:51 p.m. CT from Starbase, and by the time the mission wrapped roughly an hour later, both halves of the rocket had done exactly what they were supposed to do.

Booster 20 separated from Ship 40 a few minutes into the flight and stuck a controlled splashdown in the Gulf of Mexico about six minutes after liftoff. That is a meaningful turnaround from Flight 12 in May, when the booster lost several engines during its boostback burn before a hard water landing attempt.


Starship 40’s performance was arguably the bigger win. The vehicle deployed the first 20 operational Starlink V3 satellites Starship has ever carried, then flew a suborbital arc to a landing in the Indian Ocean that SpaceX commentator Dan Huot called the company’s softest splashdown yet. “This is a dream scenario for this team that’s trying to get this heat shield data,” Huot said on the live broadcast, according to Space.com’s live coverage. “I’m a little over the moon right now. Wow. Lucky number 13.”

Unlike the mass simulators SpaceX flew on Flight 12, these were production Starlink V3 satellites, meant to extend solar arrays and antennas and attempt to link with the broader constellation before reentering minutes later. Getting real hardware through a full deploy sequence on only the second flight of the V3 generation keeps Starship on schedule for the payload work NASA is counting on for future Artemis lunar landings.

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— TESLARATI (@Teslarati) July 25, 2026

The flight also arrives at a moment when SpaceX needed a win. SPCX has traded below its $135 IPO price since mid-July, as Teslarati reported when the mission slipped to Friday, and short interest has climbed to roughly a third of the tradable float. A clean flight will not fix a balance sheet, but it does answer the one question SpaceX absolutely needed answered this week: whether the fixes made after the July 16 abort would hold up under real flight conditions. They did, on both stages, on the first try after the redesign.

SpaceX has not set a target date for Flight 14, though the company has said it wants to push toward an orbital attempt on the next mission. After Friday, that goal looks a lot more within reach.

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