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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 loses Model Y program manager in second blow in single day

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Credit: Tesla Manufacturing

Tesla has lost its Model Y Program Manager, he announced on LinkedIn, marking the second major departure from the company today.

Emmanuel Lamacchia has been in the role for 4 years and 7 months, responsible for the rollout of the all-electric crossover in several markets.

The Model Y became the best-selling vehicle in the world for two years under Lamacchia’s watch, making this a huge loss for the company. However, it seems the decision was made under Lamacchia’s own initiative.

He confirmed his decision on LinkedIn:

“After 8 incredible years, I’m moving on from Tesla.

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What a journey it’s been… from leading NPI for Model 3 and Model Y variants to becoming the Vehicle Program Manager for Model Y, the best-selling car in the world!

Leading the All-New Model Y launch was the highlight: converting all 4 factories across 3 continents in just 2 weeks. Something that had never been done before in the auto industry.

To the teams who made this possible: you should be incredibly proud. This achievement belongs to you: the engineers, designers, buyers, and associates in Fremont, Shanghai, Berlin, and Austin who turned an impossible timeline into reality.

Grateful to the leaders who trusted me with programs that stretched my capabilities and to the cross-functional partners who showed me that great solutions come from collaboration, not hierarchy.

Tesla taught me how to move fast without breaking things and how to scale from prototypes to millions of units.

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Excited for what’s next. More to share soon.”

It marks the second major program loss for Tesla today, as it also bid farewell to Cybertruck and Model 3 Program Manager Siddhant Awasthi, who said he left voluntarily in “one of the hardest decisions of his life.”

Tesla Cybertruck and Model 3 program manager steps down

Lamacchia was at Tesla for just a shade under eight years, and previously worked for Rolls-Royce for roughly the same amount of time.

After the loss of both Lamacchia and Awasthi today, Tesla has lost a handful of key executives in 2025, including:

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  • David Imai, Director of Design
  • David Lau, VP of Software Engineering
  • Mark Westfall, Head of Mechanical Engineering
  • Prashant Menon, Regional Director in India
  • Vineet Mehta, Head of Battery Architecture
  • Omead Afshar, VP/Head of Sales and Manufacturing in North America
  • Milan Kovac, Head of Optimus Team
  • Jenna Ferrua, Director of HR
  • Troy Jones, VP of Sales, Service, and Delivery
  • Pete Bannon, VP of Hardware Engineering
  • Piero Landolfi, Director of Service
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Tesla prepares to expand Giga Texas with new Optimus production plant

Drone operator Joe Tegtmeyer recognized Tesla construction crews performing ground leveling and clearing efforts at the plant earlier today.

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Credit: Tesla Optimus | X

Tesla is preparing to expand Gigafactory Texas once again with a brand new facility that will house the eventual manufacturing efforts for Optimus, its humanoid robot.

It is already building some units on a Pilot line at the Fremont Factory in Northern California, but Tesla is planning to build the vast majority of its Optimus project at Gigafactory Texas.

Tesla Optimus gets its latest job, and it’s not in the company’s factories

It will build one million units per year in Fremont, but CEO Elon Musk said the company would build 10 million units every year in Texas at a new building at Giga Texas.

Musk said:

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“I think there could be tens of billions of Optimus robots out there. Um, now obviously it’s very important we pay close attention to safety here. Then a 10 million unit uh per year production line here the I don’t know where we’re going to put the 100 million unit production line. on Mars. Maybe on Mars, I don’t know.”

Evidently, Tesla is ready to begin thinking about the production efforts of Optimus beyond a theoretical standpoint and is starting to prepare for the construction of the manufacturing plant on Giga Texas property.

Drone operator Joe Tegtmeyer recognized Tesla construction crews performing ground leveling and clearing efforts at the plant earlier today:

Production is still slated for 2027, at least at Gigafactory Texas. As previously mentioned, the company is building some units in Fremont for the time being, at least until subsequent versions of the Optimus project advance.

Tesla has done a great job of advancing Optimus forward, but it also has truly grand expectations for the project.

Musk said it could potentially be the biggest product in the history of the planet, as it will revolutionize the way humans perform tasks, probably eliminating monotonous tasks from everyday life.

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Tesla reveals its first Semi customer after launch

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Credit: Tesla

Tesla revealed its first customer for the all-electric Semi truck after it launches next year. Who it truly is should not be a surprise.

The Semi is going to finally start deliveries to new companies outside of Tesla’s pilot program starting in 2026. The company has been building a dedicated production facility in Reno, Nevada, that has finally taken shape, but Tesla was evidently not finished with the Semi’s development.

Tesla shares rare peek at Semi factory’s interior

Last week at the Annual Shareholder Meeting, Tesla said it had implemented some new designs into the Semi, helping with efficiency, updating its design, and making it a more suitable vehicle for hauling loads, as the changes also helped increase payload.

Tesla has obtained a lengthy list of companies that have committed to implementing the Semi in their own fleets, hoping to bring their logistics lineups up to date with electric powertrains and autonomous technologies.

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While it is already operating a pilot program with PepsiCo. and Frito-Lay, Tesla will expand to other businesses, primarily using it internally after its launch.

Head of the Semi program at Tesla, Dan Priestley, said the company would be the first user of the vehicle after its launch next year. It has been using it to a certain extent, but the company has not been able to completely abandon gas haulers.

Instead, it will implement the Semi into its fleet for more sustainable vehicle logistics starting next year:

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Tesla has already received orders for the Semi from a variety of large companies, including Walmart, Sysco, Anheuser-Busch, UPS, DHL, J.B. Hunt, among others.

Many analysts see the Tesla Semi as a major contributor to future growth and increasing value within the company, especially from a Wall Street perspective. Some firms say the Semi is one of several near and medium-term contributors to the company increasing its market cap.

Cantor Fitzgerald is just one of those firms, as last week it explicitly listed the Semi as a catalyst.

Analyst Andres Sheppard said, “Overall, we remain bullish on TSLA over the medium to long term. We continue to see meaningful future upside from Energy Storage & Deployment, FSD, Robotaxis/Cybercab, Semis, and Optimus Bots.”

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