Tesla's Worst-Kept Secret: A Comprehensive Review of Project Highland

Tesla's Project Highland will see the Model 3 get revamped

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We're nearing the end of the second quarter, and Tesla is pulling out all the stops to clear out the existing inventory of Model 3s. The buzz is intensifying about the anticipated Project Highland, Tesla's substantial redesign of the Model 3, which is speculated to commence production as early as the third quarter.

What was once a hush-hush project has now become a badly-kept secret, with rumors and piecemeal evidence sparking widespread excitement and curiosity. Here's a compilation of everything we know about the impending changes.

Exterior Overhaul: Function Meets Design

Tesla's upcoming Project Highland stands to redefine the exterior aesthetics of the Model 3, pushing the boundaries of design innovation. The most striking changes, as suggested by leaked images, include reimagining the headlights into a sleeker, more streamlined form, enhancing the car's modern appeal.

Interestingly, there are no apparent fog lights in the new design, sparking curiosity about whether they've been integrated into the headlights or entirely phased out. Further, the front bumper sees a notable transformation, with the absence of ultrasonic sensors hinting at Tesla's continued emphasis on vision-based assistance.

Alterations extend to the side mirrors, appearing slightly slimmer, and the conspicuous lack of the "T" logo on the hood aligns with Tesla's move towards reduced branding. Changes continue to the rear with a redesigned bumper and repositioned reverse lights, both indicative of a refreshed look and potential cost efficiencies.

Introducing a new front bumper camera aimed at improving blind spot visibility, along with potentially additional side cameras, demonstrate Tesla's commitment to enhancing driver safety and convenience.

Interior Innovation: Redefining Luxury and Practicality

Revamping the Model 3's interior, Tesla's Project Highland removes the iconic wood dashboard inlay, swapping it for a more modern aesthetic with the possibility of materials such as alcantara fabric, carbon fiber or brushed metal. A noteworthy addition is the supposed installation of ventilated seats — these enhance the comfort quotient, providing temperature adaptability for varying climates.

An upgraded sound system is also on the horizon, aiming to enhance the auditory experience with a more immersive sound. Improved ambient lighting within the cabin is rumored as well, adding a soothing aura to night-time drives.

Driving Revolution: The Advent of Smart Shift

Shifting gears, both literally and figuratively, in a potentially revolutionary move, Tesla may be ditching the traditional gear stalks in favor of on-screen controls for transitioning between park, reverse, and drive modes. If rumors prove accurate, this 'Smart Shift' technology could signify a paradigm shift in vehicular control interfaces, offering a futuristic and user-friendly experience that could redefine the very act of driving.

As all signs point to a fast-approaching launch, Project Highland is shaping up to be a testament to Tesla's unyielding dedication to pioneering advancements. The proposed significant transformations — an aesthetic reinvention, superior technology integrations, a luxurious and pragmatic interior, and a ground-breaking driving interface — underline Tesla's resolve in pushing the envelope of what's possible in electric mobility. As anticipation continues to mount, it's clear that Project Highland isn't just a worst-kept secret; it's a bold glimpse into the exciting future of Tesla's sustainable transport vision.

Elon Musk Takes Over Tesla Sales For North America and Europe

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Following the recent departure of longtime deputy Omead Afshar, Elon Musk has stepped up to personally oversee Tesla’s sales operations in North America and Europe, according to a new report from Bloomberg, which cites people familiar with the matter.

This is a big shake-up that places Elon directly in charge of fixing Tesla’s sales slump in two key markets. The move has come as Tesla reported nearly on-the-ball deliveries for Q2 2025, hitting 384k deliveries, against a consensus street estimate of 385k deliveries.

New Leadership Structure

According to the report, Afshar’s former responsibilities are being divided between Elon and Senior VP Tom Zhu. Elon will now directly oversee the sales organizations in the US and Europe. As part of this change, Troy Jones, Tesla’s VP of North America Sales, will now report to Elon.

Tom Zhu, who is based in China, will continue to manage sales in Asia while also taking on the critical new responsibility of overseeing global manufacturing operations. Leadership of Tesla’s factories in Fremont, California, and Texas will now report to Tom. Tesla Energy’s factories will still report to Michael Snyder, VP of Energy and Charging.

For now, we’re unsure whether this is a temporary management structure, if the reporting lines will shift, or if Tesla will either hire or promote a new Senior VP of Sales to cover the duties.

Tackling the Sales Slump

The restructuring is a response to the recent downturn in sales. Analysts estimated that Tesla would deliver approximately 385k vehicles, which they essentially managed to achieve. However, deliveries fell short of production numbers, with Tesla delivering just 373k of the 410k vehicles produced.

This situation is particularly challenging in Central Europe. Europe has been noted as Tesla’s weakest market, according to Elon. Interestingly, Elon previously stated in several interviews over the last few months that there was no demand issue, but it now seems that there have been some issues with growing sales.

With Tesla’s new vehicle registrations across Europe having plunged 37% since the start of this year, and the rollout of the new affordable model, as well as more affordable versions of the Model 3 and Model Y seemingly delayed, there is a lot to do. Some analysts are projecting a second consecutive annual decline in Tesla’s global car sales for 2025.

The Rise of Tom Zhu

A key note in this reshuffle is the return of Tom Zhu to a top global operations role. Tom had previously led the construction and ramp-up of Giga Shanghai and was then promoted to Senior VP of Automotive Operations in 2023. Last year, he was sent back to China to focus on tackling regulatory hurdles with the launch of FSD in China.

His return to overseeing global manufacturing, even while staying in China, is a significant vote of confidence in his abilities. It also comes as Chinese authorities have begun drafting new autonomy guidelines to clear a path for the broader rollout of both Supervised and potentially Unsupervised FSD.

Wrap Up

This major restructuring shows that Elon is once again focused on Tesla and plans to personally tackle the company’s biggest issues. This will require a careful hand, as Elon’s forays into politics have caused self-admitted brand damage. If anyone can turn this around and have the Model Y return as the Best-Selling Vehicle of 2026, having just missed out by a few thousand vehicles to the Toyota RAV4, it is Elon.

Alongside him, Tom Zhu will be responsible for streamlining global manufacturing and ensuring that Tesla is ready to launch their new affordable variants in the near future, which should also make a considerable dent in sales.

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Tesla Shares Q2 2025 Numbers: Production and Deliveries Up Over Last Quarter

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Tesla has released its Q2 2025 production and delivery numbers, revealing an improvement in production and deliveries over Q1, but still down from a year ago.

Tesla produced 410,244 vehicles in Q2, nearly equal to their production a year ago, which was 410,831 vehicles. Production for this quarter was significantly up compared to Q1 2025, which only saw 362,615 vehicles produced. While production numbers matched those of a year ago, actual deliveries were down.

Q2 2025 saw Tesla deliver 384,122 vehicles, which was down approximately 59,000 units compared to the same period last year, but up by approximately 48,000 vehicles, or about 14% compared to Q1.

Breakdown by Model

The Model 3/Y segment continues to dominate Tesla’s production profile, accounting for 396,835 units produced and 373,728 delivered in Q2 2025. Deliveries for the “Other Models” category—which includes the Cybertruck, Model S, and Model X—were down compared to the previous quarter, with just 10,394 vehicles delivered, a 20% decline. Compared to a year ago, the drop for these vehicles is even more drastic, with sales being down 52%. Tesla refreshed its Model S and Model X last month with new features; however, the update was much smaller than expected and likely didn’t help much in increasing sales for these vehicles.

Tesla doesn’t break down Cybertruck sales separately, but those deliveries are expected to be down as well.

Tesla noted that 2% of total deliveries this quarter were accounted for under operating lease agreements, consistent with the same quarter last year.

Context and Market Response

While the numbers exceeded some bearish expectations, the year-over-year delivery drop is Tesla’s second straight quarterly decline. Analysts attribute declining sales to increasing EV competition and reputation issues.

Still, investors found relief in the improved quarter when compared to Q1. The stock rebounded about 4% yesterday on the news.

Looking ahead, all eyes are on Tesla’s Robotaxi network, the Cybercab, and the more affordable model, which is slated to be released later this year.

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