Tesla Cybertruck Will Get Enhanced Off-Road Capability With Locking Differentials in Software Update

By Kevin Armstrong
New Cybertruck Locking Differentials
New Cybertruck Locking Differentials
Not a Tesla App

Like 90% of trucks and SUVs, most Cybertruck will never leave the pavement. But Tesla is setting the stage for a significant upgrade that promises to elevate its off-road performance for the small group of owners that may actually get the Cybertruck a little dirty. The feature will be in an upcoming software update, confirmed by the lead Tesla Cybertruck engineer.

Upcoming Update

Traditionally, the acquisition of a vehicle came with a fixed set of features, with any upgrades necessitating physical modifications or replacements. However, Tesla has redefined this paradigm by implementing software-defined vehicles.

Tesla's Cybertruck is undergoing rigorous testing to perfect the integration of locking differentials. Wes Morrill, Cybertruck Lead Engineer, revealed that the team is experimenting with both mechanical and electronic locking systems for the rear axles and will enable them in an upcoming software update. The fact that Tesla is already testing the feature in the Cybertruck means that it could be released imminently. at least if testing goes well.

The Mechanics of Locking Differentials

In vehicles, a differential allows wheels on an axle to rotate at different speeds, which is crucial for turning. However, in off-road scenarios, this can lead to a wheel spinning freely if it loses traction, limiting forward movement. Locking differentials solve this by forcing both wheels on an axle to move at the same speed, ensuring that power is efficiently directed to the wheel with better grip, enhancing off-road capability.

The driver can engage Locking differentials manually or automatically, adapting to changes in traction on the fly. Tesla's Cybertruck is poised to feature electronic locking differentials, utilizing electromagnets or solenoids controlled by the vehicle's software. This enables precise, dynamic adjustment to driving conditions, ensuring optimal traction across diverse terrains.

This technology represents a significant advancement in vehicle design, merging mechanical robustness with digital intelligence. By automatically detecting and responding to traction needs, the Cybertruck's locking differentials will offer drivers a superior off-road experience, showcasing the potential of integrating software solutions with traditional automotive mechanisms for improved performance.

How the 25% Auto Tariffs Will Impact Tesla

By Karan Singh
Not a Tesla App

On March 27, the U.S. Administration announced a 25% tariff on all imported vehicles and foreign-made automotive parts, an attempt to strengthen domestic manufacturing. Currently, Tesla and Rivian stand out as the major EV automakers with a predominantly U.S.-built lineup.

In this analysis, we’ll explore the potential impact of these tariffs, examining key factors and what they mean for the industry moving forward.

Percentage of American Parts

One key item we want to point out here before we continue is that the NHTSA defines North American made parts as parts built in either the United States or Canada - Mexico is not included in this number. In November 2024, we found out the percentage of parts Tesla uses that come from the U.S. and Canada. At the top we have Tesla’s Model 3, which uses 75% North American parts.

We’ll be sticking with overall percentage of North American parts since we don’t actually know what percentage Tesla sources from Canada. We do know today that some cameras, essential die parts, and other key components are sourced from Canada for nearly every vehicle in Tesla’s lineup - so it isn’t an insignificant percentage.

Insulated from Tariffs?

At first glance, Tesla may seem insulated from these tariffs. However, its dependence on a global supply chain—particularly parts moving across the U.S.-Canada border under the US-Mexico-Canada Agreement (USMCA)—adds complexity to the equation. Additionally, potential retaliatory tariffs from Canada could further pressure Tesla, a trend already evident in the company being excluded from multiple EV incentives across the country.

While Canada isn’t Tesla’s largest market, it still accounts for a meaningful share of sales. Even a small decline in that market could have a noticeable impact on the company’s bottom line.

Domestic Advantage

Tesla’s domestic advantage is impressive—it manufactures all vehicles sold in North America at just two facilities: Tesla Fremont and Gigafactory Texas. The initial 25% tariff, set to take effect on April 2, 2025, applies to cars and light trucks assembled outside the U.S., likely dealing a heavy blow to competitors like Hyundai and Volkswagen. According to a Goldman Sachs report, these tariffs could drive up vehicle prices by $5,000 to $15,000.

However, this advantage is partially offset by exemptions under the USMCA. To avoid the full tariff, vehicles and parts must meet a strict “rules of origin” requirement, meaning at least 75% of components must come from the U.S., Canada, or Mexico. This exemption remains in place until May 3, 2025, when the second stage of tariffs kicks in—targeting non-U.S. content more directly.

Effectively, the NHTSA and USMCA’s existing framework for defining “North American-made” components is being upended. This shift plays to Tesla’s strengths, but to understand the full impact, we need to take a closer look at its supply chain.

Supply Chains

Tesla’s supply chain is deeply integrated across North America. Approximately 25% of the Model 3 Long Range RWD and AWD comes from Mexico - and some undefined percentage also comes from Canada. That number rises significantly for the other vehicle’s in Tesla’s line-up, which is available in the chart below from early November 2024.

Phase 2 of the tariffs will place an increasing impact on Tesla - especially as it won’t be simple nor quick for Tesla to move all part production to the United States. 

Vehicle

Pct made in US/Canada

Model 3 LR AWD/RWD

75%

Model 3 Performance

70%

Model Y (All Variants)

70%

Cybertruck

65%

Model S

65%

Model X

60%

Battery Production

This is particularly evident in Tesla’s reliance on Canadian minerals, which are crucial for its battery production. Tesla sources key materials like nickel, lithium, and cobalt from Canadian mines, with most of these resources being shipped across the border in an unrefined state. Currently, these shipments face a relatively low 10% tariff from Canada. However, potential retaliatory tariffs could drive costs higher or even restrict access to these essential minerals.

While limiting access may seem extreme, Ontario has already threatened to halt nickel exports from Canada’s largest nickel mine to the U.S.—a move that could pose a serious challenge for Tesla.

Even Elon Musk has acknowledged that Tesla won’t emerge from these tariffs unscathed.

Retaliatory Tariffs

Tariffs are rarely a one-way street. Canada and Mexico are likely to respond with retaliatory tariffs on U.S.-made auto parts or vehicles. Both countries have already explored reducing EV incentives by excluding Tesla from certain rebates. Additionally, there have been discussions about imposing tariffs specifically on Tesla, partly due to Elon Musk’s political involvement.

Consumer Impact

Several scenarios impacting consumers can unfold in response to these upcoming tariffs.

In the short term, higher prices for competitors could drive more customers toward Tesla as they seek more affordable products. However, increased import costs could force Tesla to either absorb the expense or raise prices—potentially offsetting any sales gains.

Cox Automotive, a leading industry analyst, has warned that by mid-April 2025, North America could see reduced production, tighter supply, and rising vehicle prices. Tesla, despite its domestic production, won’t be immune to these effects due to its reliance on a continental supply chain.

To mitigate long-term costs, Tesla could explore securing domestic mineral rights—an expensive move initially but one that could provide stability if tariffs remain in place for years under the current administration.

However, Tesla CFO Vaibhav Taneja acknowledged during the Q4 2025 Earnings Call that the company remains heavily dependent on global parts sourcing. Given Tesla’s own admission of the impact, consumers should expect price increases as the company adjusts to the shifting trade landscape.

What to Take Away

Overall, the 25% tariff presents a double-edged sword for Tesla. While it may offer short-term advantages by making competitors’ vehicles more expensive, long-term, Tesla will also be impacted. Tesla’s reliance on cross-border parts, coupled with potential retaliatory tariffs, could quickly escalate costs and increase vehicle prices.

As the political landscape around tariffs continues to evolve on what seems to be a daily basis, Tesla will need to navigate these changes carefully. Tesla’s supply chain has been optimized for cost-effectiveness and efficiency. Any changes that happen could be driven by the new tariffs. Tesla may be forced to make changes that prioritize reducing tariff costs, potentially at the expense of efficiency. However, if these policies continue to evolve or if tariffs are later removed, Tesla is then stuck with a less-efficient supply change.

The company will likely address these challenges in detail during the Q1 2025 Earnings Call, though that remains several weeks away.

What the Green and Orange Dots in a Tesla Mean

By Karan Singh
Not a Tesla App

Over the years, Tesla has introduced UI elements that indicate when specific hardware or software features are active—and these two new dots follow the same pattern.

In June 2024, Tesla introduced the ability to see which third-party apps have access to the vehicle’s location, and these new indicator dots have a similar goal — to improve transparency on features that impact privacy.

Green Dot

If you’ve noticed a green dot on your Tesla display or the instrument cluster for the Model S or Model X, then you have access to Tesla’s hands-free Autopilot feature.

The green dot is displayed on the screen whenever FSD or Autopilot is active and the vehicle is using the interior camera to monitor the driver’s attention.

The cabin camera does a much better job monitoring the driver than the old method of sensing torque on the steering wheel. The cabin camera detects driver attention by tracking the driver’s head and eyes and making sure they’re focusing on the road. If the driver looks away from the road for an extended period, the vehicle will warn the driver or issue a strike for repeat offenses.

If the cabin camera is occluded or obscured, or if it’s simply too dark, the vehicle will fall back to monitoring the driver by detecting torque on the steering wheel.

The presence of the green dot not only lets the driver know that the interior camera is being used but also lets them know whether they need to keep their hands on the steering wheel.

It’s important to note that images and video taken with the interior camera are processed in the vehicle and do not leave the vehicle unless you have granted access for Tesla to use them to improve functionality.

You can check your privacy and data sharing policy in Controls > Software and tap the Data Sharing button at the bottom.

Orange Dot

The orange dot functions similarly to the green one, but instead of indicating cabin camera usage, it appears when the vehicle’s microphone is active. This was added with software update 2025.2, which now listens for audio cues to detect emergency vehicles and other types of noises that could help the vehicle better understand its environment in the future.

Tesla is currently collecting this data to refine its ability to detect emergency vehicles even before they come into view. This capability is expected to be added in FSD v14 along with a larger model size.

Like cabin camera analytics, drivers can opt to share audio data with Tesla to improve detection accuracy. Many users received an “Allow Sound Detection Analytics” prompt following the recent update. If they consent, Tesla may use certain audio snippets to help improve their detection model. Any data transmitted to Tesla is not linked to a specific user or vehicle, so it can’t be tied to a specific individual.

Otherwise, all audio detection and processing is completed in the vehicle to ensure the driver’s privacy.

The prompt for audio analytics
The prompt for audio analytics
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