A rendering of the Model 3 Highland (right) based on leaks
@CYBRTRK420
All eyes on Tesla have been focused on the bright, shiny, stainless steel object, the Cybertruck. Still, the company is nearing the release of another industry-shaking move, the Model 3 refresh - Highland. As the anticipation builds, we have collated the most recent updates from various trusted sources to bring you the latest on what could be a game-changer for the electric vehicle market.
Appearance:
A tweet from Tesla China Analyst, @teslashanghai, praises the Highland project, noting that the new Model 3's design looks "very attractive," even more so than the Model S. The refreshed version boasts sleek new headlights that have caught the eye of enthusiasts. In another tweet, Chris Zheng quoted a Tesla Chinese employee who confirmed that the actual car looked "very close, with almost no difference" to the expected design.
Production
The Highland project has moved beyond the trial production phase, with production ramp-up and stress testing slated to begin on August 25th. By early September, Tesla aims to reach a daily production capacity of approximately 1,200 units, as shared by @teslashanghai.
Hardware
Contrary to some expectations, a new rumor says Highland will feature HW 3.5, not 4.0, which seems counterintuitive. Tesla now delivers the new Model S, Model X and some Model Ys with hardware 4.0. Given that hardware 3 can't easily be swapped for hardware 4.0 due to physical characteristics, this rumor appears unlikely unless Tesla was under extreme supply constraints.
Pricing
One of the exciting aspects of Project Highland is its potential to reduce manufacturing costs, thanks to single-piece casting, reduced wiring harnesses, and new materials. However, the expected pricing will be approximately 27,000 USD, as estimated by Tesla China Analyst. They aren't clear in their post, but this is assumed to be their estimate of manufacturing costs instead of the price of the vehicle. Even so, this is thousands of dollars cheaper than the current Model 3 manufacturing costs.
The Highland would be welcomed with open arms by the market. Tesla China Analyst went as far as to predict an "explosive increase in orders," given the vehicle's impressive overall package.
Availability
Are these Model 3 Highland vehicles covered up in Shanghai?
@CYBRTRK420
New rumors point to Project Highland being available soon. Sources state that the Model 3 Highland will be displayed in Chinese Tesla stores at the end of August. Mysteriously covered cars parked at Giga-Shanghai might be the new Model 3s, although confirmation is still pending. However, there are several signs that Tesla is about to open the doors for the new Model 3, as detailed in an earlier story.
With the Tesla Model 3 Highland, Tesla continues its innovation and disruptive design tradition. The reported changes, from appearance to hardware, signal a continued push towards affordability without compromising quality. The Tesla Model 3 Highland represents not just a car but a statement, a vision, and possibly, the new standard in electric mobility.
In the latest episode of Jay Leno’s Garage, Tesla’s VP of Vehicle Engineering, Lars Moravy, confirmed that the new Model Y will feature adaptive headlights.
As Moravy was talking about the updated headlights in the vehicle, which now sit a few inches lower than before, he stated that in a couple of months, Tesla will add adaptive headlights in the U.S.
While Tesla has already introduced adaptive headlights in Europe and the Indo-Pacific, the feature has yet to make its way to North America.
Originally delayed in the U.S. due to regulatory issues, manufacturers have been able to implement adaptive headlights since mid-2024. Meanwhile, competitors like Rivian and Mercedes-Benz have already rolled out their own full matrix headlight systems, matching what’s available in other regions.
Update: This article has been updated to clarify that adaptive headlights will indeed be launched in the U.S., shortly after the vehicle launching in March.
Currently, Tesla in North America supports adaptive high beams and automatic headlight adjustment for curves, but full matrix functionality has yet to be rolled out. Meanwhile, matrix headlights are already available in Europe, where they selectively dim individual beam pixels to reduce glare for oncoming traffic and adapt to curves in the road.
It was surprising that matrix functionality wasn’t included in the comprehensive 2024 Tesla Holiday Update. This feature would likely improve safety ratings, so we can only assume Tesla is diligently working to secure regulatory approval.
Adaptive Headlights on Other Models
Lars didn’t confirm whether the refreshed Model Y comes with the same headlights as the new Model 3 and the Cybertruck, instead simply calling them "matrix-style” headlights.
The headlights on the new Model Y appear very similar to those available in the 2024+ Model 3, possibly meaning these other models will also receive adaptive headlight capabilities in the next couple of months.
For vehicles with older-style matrix headlights, it’s unlikely that adaptive beams support will launch at the same time, but they will hopefully become available soon afterward.
For the first time since launching Tesla Insurance in 2019, Tesla will begin underwriting its own policies, starting in California.
Tesla Insurance originally debuted in California and has since expanded to several U.S. states. Until now, policies were underwritten by State National, a subsidiary of the Markel Insurance Group. However, Tesla is now transitioning to fully in-house underwriting, beginning with its home state.
As part of this shift, California Tesla Insurance customers who receive an in-app offer to switch will be eligible for a one-time 3% discount on their next term’s premium—covered entirely by Tesla Insurance.
What is Underwriting
Underwriting is the process an insurance company uses to assess risk and determine whether to offer coverage, at what price, and under what terms.
Insurers evaluate factors such as driving history, credit score, age, vehicle type, and location. In Tesla’s case, vehicle driving data (not available in California) also plays a key role in risk assessment. These factors help classify drivers into risk categories, which influence their base premium.
From there, coverage limits, deductibles, and policy inclusions or exclusions can further adjust the final premium up or down.
Robotaxi and Other Benefits
At first glance, underwriting insurance might seem like a complex and costly process for Tesla. However, there are several compelling reasons why this move makes sense.
Insurance Income: Insurance is a highly profitable industry. Companies set rates based on risk, offering lower premiums to safer drivers and higher rates to riskier ones. This not only maximizes profitability but also incentivizes safer driving behavior, reducing overall claims.
Data Advantage: Tesla collects vast amounts of driving data through its Safety Score system. While California doesn’t allow Safety Score to impact premiums, Tesla can still use this data in the underwriting process to refine risk assessments and pricing for its vehicles.
Control Over Repair Costs: By underwriting its own policies, Tesla gains direct control over repairs and total loss decisions. This allows them to dictate when, where, and how repairs are done, optimizing costs for parts, labor, and service while ensuring vehicles are fixed according to Tesla’s standards.
FSD-Driven Discounts: Tesla has already begun offering insurance discounts for drivers using Full Self-Driving (FSD). By underwriting its own policies, Tesla could expand these incentives, potentially offering greater discounts to frequent FSD users in the future.
Preparing for Robotaxi: Perhaps the biggest long-term reason for this shift is the June launch of the Robotaxi fleet. How will Tesla insure these vehicles? The answer is simple—by underwriting its own policies and assuming liability.
Tesla’s decision to underwrite its own insurance isn’t just about cutting out middlemen—it’s a step toward lowering costs, increasing profitability, and preparing for the future of autonomous driving, a risk many insurance companies may be unwilling to make.
Further Expansion
This could be a strong sign that Tesla is preparing to expand its insurance offerings now that it has taken on the underwriting process itself. In July 2024, Tesla hired a former GEICO insurance executive to lead the expansion of Tesla Insurance and help reduce costs—a move that now appears to be paying off.
Rather than a traditional expansion, Tesla has instead made a bold move by bringing underwriting in-house, something few expected. However, it aligns with Tesla’s strategy of vertically integrating and controlling key aspects of its business, whether in manufacturing, software, or now, insurance.
If this pilot program proves successful, it could pave the way for Tesla Insurance to launch in more states—and potentially even other countries. With 2025 shaping up to be a pivotal year, we may see Tesla accelerate its insurance expansion sooner than expected.
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