The Tesla Model Y and Model 3 are both designed to cater to the mass market. Both vehicles share 75% of their parts since they’re optimized for quick production. But even vehicles that are three-quarters similar have key differences, some of which were revealed in the recently-released Tesla Model Y Owner’s Manual.
From their tow eye hooks to their speakers to their wheel configuration, the Model Y and Model 3 feature subtle differences that make them distinct from each other. Here are 12 of these key differences, as outlined by Tesla owner-enthusiast Tesla Raj in a recent video.
We’ve highlighted some of the key differentiators below.
Tow Eye Hook
Tesla has added a second tow eye hook to the back of the Model Y for added convenience when towing the vehicle from either end.
In times when a Tesla Model Y may need to be transported on a flatbed truck, the vehicle can be placed in Transport Mode and winched by way of a tow eye hook and onto the back of a flatbed truck while its wheels remain free-rolling.
Compared to the Tesla Model 3, which is equipped with a tow eye hook only in the front of the vehicle, Model Y has a cover on the right side of the rear bumper to conceal the second tow eye. This can be seen in the vehicle’s diagram in the Model Y Owner’s Manual.
-
-
- Tesla Model Y frunk tow eye (Credit: Ben Sullins)
Emergency Door Release Handles
The Tesla Model 3 met some criticism when it was produced with emergency release handles only available on the front doors. Tesla addressed the issue in Model Y by adding emergency release handles on all doors. The Model Y rear emergency release handle is located under a flap inside the bottom of the rear door pocket.
Emergency release handles are only required in situations where the vehicle does not have power. “In the unlikely situation that Model Y has no power, these electrically-powered buttons at the top of the door handles no longer work. However, the doors are equipped with mechanical releases so that you can still open them,” notes Tesla in its Model Y Owner’s Manual.
-
- Tesla Model Y emergency door release (Credit: Tesla)
-
- Tesla Model Y rear door emergency release (Source image: Eweaver1983271 via Reddit)
Trunk Space, Rear Seats, and Legroom
No surprises, but the trunk space for Model Y is drastically larger than that of the Model 3. Factoring in Model Y’s taller hatchback design versus Model 3’s traditional trunk and the difference in cargo space becomes obvious. Model Y boasts a massive 68 cubic feet of cargo volume compared to 15 cubic feet for Model 3.
The rear seats of the Model 3 and Model Y are also quite different in the way that the all-electric sedan’s fold 60/40. Model Y, on the other hand, has three seats, all of which could be folded down individually. The Model 3’s rear seats can also be folded down only through the rear, while the Model Y provides two ways to fold down its second-row seats and includes a center passthrough when the middle seat is folded down.
-
Model Y has two switches on the left side of the trunk that gives owners ease of access to the second-row seats directly from the trunk. Activating the switch will fold-down each corresponding rear seat.
The Model Y seats appear to be the same design as the Model 3, however, are mounted on risers for better legroom and overall comfort than Model 3. Rear seat legroom in the Model Y is improved over Model 3 by roughly 15%, although it looks like some of it was borrowed from the 2% reduction in front legroom when compared to Model 3. The headroom between Model Y and Model 3 is relatively the same and differ only by 1-2%.
Tesla Model Y vs Model 3 Leg Room
- Front: Model Y – 41.8 in (1,063 mm) vs Model 3 – 42.7 in. (1,085 mm)
- Rear: Model Y – 40.5 in (1,029) vs Model 3 – 35.2 in (894 mm)
-
- Tesla Model Y trunk (Credit: Eweaver1983271 via Reddit)
-
- Tesla Model Y rear seat fold down levers (Credit: Tesla)
-
- Tesla Model Y rear door emergency release (Source image: Eweaver1983271 via Reddit)
Wiring System and Heat Pump
Arguably the most notable difference between the Model Y and Model 3 in terms of core design improvement is the wiring system and heat management. Tesla added a heat pump to the Model Y, which could help the all-electric crossover maximize its range during winters. In addition and as pointed out by TeslaRaj in his video, the diagram for Model Y appears to show a single track for wiring as opposed to Model 3 which has two.
-
Teslarati will explore both of these points in detail in an upcoming story.
Wheel Size and Specifications
The Tesla Model Y’s wheels are 9.5 inches wide, which are slightly larger than the Model 3’s 8.5-inch wheels. It should be noted that the Model Y Performance comes with a staggered wheel setup, with the front wheels being 9.5 inches and the rear wheels being 10.5 inches wide.
See more: Tesla Model Y with Performance Upgrade Uberturbine Wheels
Tesla Model Y wheel specifications (Credit: Tesla)
Rear Speakers
Both the Tesla Model 3 and the Tesla Model Y are fitted with a suite of premium speakers that provide a great listening experience for owners. They do have differences in the way that the Model 3’s rear speakers are located on a shelf behind the rear seats, while the Model Y has its rear speakers on the trunk hatch.
Coat Hooks
Both the Tesla Model 3 and the Model Y come with coat hangers, though the all-electric sedan’s is located on the crossbar that goes between the B pillars. The Model Y, with its seamless glass roof, has its coat hangers in the second row.
-
Inductive Phone Charger
The Tesla Model Y is equipped with a wireless charging pad, as well as USB-A and USB-C slots. On the other hand, the Model 3 is fitted with wired charging options and a dual USB-A slot. Owners would likely appreciate the Model Y’s wireless charging features, as most flagship and midrange mobile devices today come standard with wireless charging. See Tesla Model Y wireless phone charger.
Rear USB ports
The USB ports of the Model 3 and Model Y in the second row are also different. The Model 3 is fitted with two USB-A ports, while the Model Y is equipped with two USB-C ports. Considering that the two vehicles share 75% of their parts, it would not be surprising if Tesla ends up equipping the Model 3 with USB-C ports in the future.
Tesla notes in the Model Y Owner’s Manual that the rear USB ports are for charging devices and do not communicate with the vehicle like the front USB ports that can be used for recording via TeslaCam.
Power Liftgate
The Model Y is equipped with a power liftgate, which provides owners an automatic and convenient way to open and close the vehicle’s rear hatch by way of the center touchscreen or Tesla mobile app. This feature is not present in the Model 3, which is one of the reasons why aftermarket power truck mods became quite popular in the Tesla community.
See Tesla Model Y’s power liftgate in action.
-
A big thanks to Tesla Raj for compiling this info. Check out this video below.
Elon Musk
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Elon Musk told SpaceX staff AI revenue will soon dwarf rockets and Starlink combined entirely.
Elon Musk told SpaceX employees this week that artificial intelligence, not rockets, will soon carry the company’s revenue. In a roughly 29 minute internal address posted on SpaceX’s X account on Tuesday, Musk said AI revenue will pass every other line of business at SpaceX “probably in September” and pull further ahead by the fourth quarter.
The numbers he gave are specific. SpaceX currently runs 1.4 gigawatts of AI compute capacity. Musk wants that at 10 gigawatts by the end of 2027, a jump he tied directly to revenue: “if we bring 10GW of AI online by the end of next year, it will be $300 billion to $500 billion a year in revenue.” He called those “big numbers,” which undersells a projection larger than what most countries produce in a year.
We made rockets reusable and are rebuilding the internet in space. The next challenge: making life multiplanetary and understanding the true nature of the universe
Watch @ElonMusk deliver a company update to @SpaceX employees pic.twitter.com/5c8rxoCQfu
— SpaceX (@SpaceX) August 11, 2026
Musk went further on where AI fits into SpaceX’s future. “Probably in four or five years, AI will be 99% of the value of SpaceX,” he told staff, adding that digital intelligence would eventually run “a trillion times” ahead of biological intelligence as computing scales. He tied that growth to the company’s founding mission, telling employees “we must win on AI, because the future is overwhelmingly AI and robots,” with the payoff meant to help fund Starship and a Mars program that increasingly runs through Terafab, the joint Tesla, SpaceX and xAI chip plant.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
None of this is entirely new territory. SpaceX told investors much the same story during its first earnings call as a public company on August 4, where Musk moved the company’s $1 trillion revenue target up a year to 2030 and said Starlink could someday carry a majority of the world’s internet. What the all hands video adds is a hard deadline and a specific power figure Musk had not given publicly before, along with a franker pitch to his own workforce that AI, not launch cadence, is now the thing SpaceX is betting its future on.
The AI revenue itself is not coming from SpaceX training its own models. It is largely Starlink acting as the network layer for xAI’s workloads, plus SpaceX renting out compute capacity directly, the same approach behind the roughly $16 billion the company spent on AI infrastructure in a single quarter.
Musk closed the video with a pitch aimed at recruiting and retention rather than investors, telling employees that anyone who helps SpaceX win the AI race will eventually get the chance to go to the moon or Mars themselves. Whether SpaceX can turn 1.4 gigawatts into 10 in seventeen months is the more immediate question, and one that will show up in quarterly numbers well before anyone leaves Earth.
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.”
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.
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.
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.
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Tesla has one big financial question to answer for investors: Morgan Stanley
