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Tesla Showdown: We got a Model 3 and compared it to a Model S [Video]
We’ve seen a handful of Tesla Model 3 review videos floating around — including an excellent hour-long, deep-dive into the car’s features by our friends at Model 3 Owners Club. That said, we just got a chance to conduct an in-depth evaluation of Model 3 for ourselves. It’s a fascinating car and in our view, will come to dominate the mid-sized sedan segment over the next few years.
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Above: Considering the differences between the two Tesla sedans (Photo: EVANNEX)
In some ways, Model 3 demonstrates how Tesla has elevated its interior design capabilities and improved the integration of features, functionality, and storage as the company moves forward. In other ways, Model 3 reinforces the contention that Model S remains Tesla’s flagship sedan. We think it’s worth comparing and contrasting the two Tesla sedans to better understand the differences between the cars.
Above: Examining a few of the subtle, and not-so-subtle similarities and differences between Tesla’s Model 3 and Model S (Youtube: EVANNEX)
We spent two full days with the Model 3, reviewing the interior and exterior in granular detail. We examined the car through the lens of five years (since 2012!) of Model S ownership. Sure, some Tesla owners (like us) are wondering how these siblings stack up against one another. But there are many others pondering the possibility of owning their first Tesla. The big question is… if you’re considering the purchase of a Tesla Model 3 or Tesla Model S, which one should you buy?
Interior
Let’s compare and contrast some of the interior features of Model 3 and Model S with particular emphasis on driving and vehicle control displays, HVAC capabilities, interior volume and storage, the front driver’s compartment, and the little things that add functionality to the interior.
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Above: A look inside the Tesla Model 3 interior (Photo: EVANNEX)
Driving and vehicle control displays. The Model S boasts two digital displays instead of one in the Model 3. The Model 3’s horizontal, center display is also smaller (15-inch) vs. a vertical, center display which is larger (17-inch) in the Model S. Because Model S retains an information display immediately in front of the driver, it provides somewhat more comprehensive information content. As an aside, the 15-inch landscape display in Model 3 appears to be larger than it is and provides a full range of driving and vehicle information at a glance.
HVAC. Model 3’s HVAC approach demonstrates a significant step forward for Tesla. Both the Model S and Model 3 HVAC approaches are functional and capable, but the Model 3 has a definite advantage in terms of directional control and aesthetics. In addition, its novel design is impressive.
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Interior volume and storage. Because Model 3 is a mid-size sedan, it can’t compete with Model S in interior volume—an important factor for many owners. Overall, interior volume in the Model S is far superior to Model 3. You get 30 cubic feet in Model S vs. 15 cubic feet in Model 3. As important in our view, the Model S hatchback design has significant advantages over the Model 3 conventional trunk opening. The hatchback opening provides very easy placement of large objects. It should be noted that the Model 3 trunk, when coupled with second row fold-down seats, does offer the ability to carry long objects with relative ease. The Model S also has a power lift gate instead of the Model 3’s manual trunk. In addition, Model S has a larger frunk than Model 3.
Seating. Model S has seating for 5 adults + 2 children (with rear facing “jump” seats). Model 3 only has seating for 5 adults. That said, Model 3’s seat quality, design, and overall spaciousness of the cabin were comparable to Model S.
Driver visibility. The interior design of Model 3 is striking in the sense that it eliminates the binnacle that normally sits directly in front of the driver, replacing it with a 15-inch landscape center display. With the binnacle removed, the Model 3 dash is lowered, allowing a more complete view of the road immediately in front of the vehicle. The large expanse of glass above the driver provides the feeling of an aircraft cockpit.
Center console. Sitting in the driver side cockpit of Model 3, it becomes obvious that Tesla has improved its interior design chops. The center console for Model 3 (available with the premium option package) is well-designed and functional. It offers easy mobile device charging, dual USB ports along with a 12V port, and elegant storage, complemented by storage compartments in the doors.
Lack of buttons. For Model 3, just about everything except window and door opening is controlled via the landscape display. This level of software control is impressive, but we felt that there might be times when it would be easier to use an analog alternative for, say, the control of the side mirrors or glove box.
The little things. There are little things you’ll find in a Model 3 that are absent from the Model S — coats hooks, built-in rear seat armrest, small storage compartments, back-of-seat kangaroo pockets, etc. To be a bit self-serving for a moment, most of these items can be had (in the aftermarket) for Model S from EVANNEX.
Exterior
Moving to the exterior, it’s apparent that Model 3 has the same vehicle DNA as Model S, but like all siblings, there are visual (as well as characteristic) differences.
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Above: Tesla’s sleek design of its new Model 3 (Photo: EVANNEX)
Looks. The most obvious (in-person) differences are the shorter hood for Model 3, the noticeably narrower width of the vehicle, and smaller wheels. Because it is shorter and narrower, Model 3 has a less striking stance than Model S. Overall, the larger size of the Model S is more visually impressive. We think it’s fair to state that many Model 3 owners will remedy some of these issues in the aftermarket, but in the case of Tesla’s sedan siblings, size matters.
Sensor suite. Autopilot (and ultimately, autonomous driving capability) will be available for both Model S and Model 3. It appears that functionality and capabilities in this domain will be identical.
Door handles. We did have a few small quibbles with Model 3. The push-rotate-grab door handles of Model 3 achieve the required aerodynamic advantages for an electric vehicle, but they pale in comparison to the auto-present and retract door-handles for Model S. We felt that Model 3 handles weren’t as ergonomic, particularly if you’re carrying something as you get into the vehicle.
Wheels. The 18-inch Model 3 aero covers are a matter of personal taste, but the underlying wheel (rim) is a bit conventional in our view and doesn’t offer an aesthetic that Model 3 deserves. The 19-inch wheels (available as an option) are more interesting, but still a bit less luxe than Model S (19-inch and 21-inch) wheel options.
Driving
Performance. Before going any further, it’s important to note that we weren’t able to test drive the Model 3 during our recent evaluation. Last year, we did enjoy a test ride in the Model 3 prototype at Tesla’s launch event. At that time the ride of Model 3 felt like a Model S, but it didn’t have the explosive torque and power that Model S owners are accustomed to. If you’re looking for ludicrous 0-60 mph times (gulp, 2.28 seconds), the Model S is your car. On the other hand, the published findings of a number of different test drives indicate that drivability and overall performance of Model 3 are quite impressive for a car at its price point. To that end, Model 3 can race a respectable 0-60 mph in 5.1 – 5.6 seconds.
Range. Both Model S and Model 3 have plenty of range for road trips and access to Tesla’s vast Supercharger network. On the whole, depending on which variant you look at, Model S will provide more range (259 – 335 miles of range) than Model 3 (220 – 310 miles of range). Also, many Model S owners will be able to take advantage of free supercharging (with a referral) whereas Model 3 owners will not have access to that particular perk.
The Verdict
In reality, the Model 3 and Model S are different vehicles for different demographics. Both have the same vehicle DNA, both will turn heads, and both are the epitome of current automotive technology. It’s clear — you definitely want a Tesla. Which Tesla is right for you?
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Foreground: A new “refresh” Tesla Model S (left) across from a used “signature” Tesla Model S (right); Background: Tesla Model 3 (Photo: EVANNEX)
Although we were extremely impressed with the Model 3, if you’re considering a Tesla (and can afford it), we recommend going with Model S. On performance and premium feel, Model S wins going away. On exterior aesthetics, Model S provides a head-turning design that Model 3 can’t match. On (a few) interior design cues, it’s Model 3 by a nose. On interior space, seating, and storage volume, Model S triumphs. And if you consider availability, you can get your hands on a new or used Model S in a matter of weeks. Model 3 availability? That’s an entirely different discussion.
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Note: Article originally published on evannex.com, by Matt Pressman
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
