Tesla Model 3 Refresh Explained: Inside Project Highland with Munro

Tesla’s Project Highland is one of the most anticipated developments in the electric vehicle world—and Munro & Associates is on the case. In this article, the Munro team sits down to unpack what Tesla’s Model 3 refresh really means. From aesthetic upgrades to substantial under-the-hood changes, the episode offers an engineering-forward perspective on what’s coming for Tesla’s popular sedan.

For automotive engineers, EV enthusiasts, and investors alike, this teardown-style review of Project Highland shines a spotlight on Tesla’s evolving lean design strategy, manufacturing philosophy, and premium content roadmap.

What Is Tesla’s Project Highland?

Project Highland is Tesla’s internal codename for a mid-cycle refresh of the Model 3. Contrary to some online speculation, it is not the long-rumored $25,000 mass-market EV. Instead, it fits the traditional automotive playbook of a mid-cycle action (MCA), where facelifts, feature upgrades, and selective cost changes are made roughly halfway through a vehicle’s lifecycle.

The Munro team noted that there’s no clear indication this is a cost-reduction push across the board. In fact, some changes—such as ventilated seats and upgraded lighting—suggest the opposite: an increase in premium content.

Exterior Changes: Subtle But Strategic

Leaked images of the Project Highland prototype vehicles show mild front fascia tweaks, notably smaller headlamps and a cleaner lower intake design. The omission of fog lamps could be a cost-reduction strategy—especially if that functionality is now integrated into the main headlamps. This approach reduces wiring complexity and parts count, which aligns with Tesla’s goal of minimizing manufacturing overhead.

Another interesting note is the potential integration of new radar systems behind the updated fascia. Tesla infamously removed radar and ultrasonic sensors in 2021 in favor of vision-only Autopilot, but rumors (and visual hints) suggest they’re bringing radar back—this time with improved range and resolution.

Interior Refresh: Textures, Speakers, and Style Shifts

Moving to the cabin, the Model 3 refresh includes a new textile trim—more jersey knit than Alcantara—indicating a potential cost adjustment while maintaining a premium feel. The door panels show altered cut lines and possibly a reconfigured speaker layout. A new tweeter grill appears near the front door panel, and there’s speculation around software-locked audio hardware—an approach Tesla has used before.

Tesla’s move toward minimalist interior design continues with potential removal of stalks from the steering column, similar to the Model S. Instead, controls may be integrated into the steering wheel and infotainment screen. This design decision aligns with cost-cutting (fewer mechanical parts) and future-oriented UI trends.

And in a nod to consumer feedback, ventilated seats—long requested by Tesla owners—appear to be part of the refresh. That’s a premium content increase, not a reduction, which signals that Tesla is balancing user demand with design innovation.

Engineering Evolution: Gigacastings and Structural Packs

Perhaps the most significant updates aren’t visible from the outside. One of the key technical changes Munro suspects is the introduction of front and rear gigacastings—large, one-piece aluminum castings that replace numerous smaller components in the body structure. While heavier and sometimes more costly up front, gigacastings streamline production, reduce complexity, and increase structural integrity. They’ve already proven their worth in the Model Y.

Another change that could follow: a move to a structural battery pack. Tesla pioneered this with its 4680 cylindrical cells, where the battery pack acts as a load-bearing part of the chassis. The big question now is whether Tesla will be able to implement this structural design using LFP (lithium iron phosphate) cells. If they do, it would be a first in the industry outside of BYD’s Seal, which uses a similar approach with its blade battery architecture.

This transition would mark a significant milestone in EV engineering—combining the affordability and thermal stability of LFP with the packaging efficiency of a structural battery pack. However, there’s no firm evidence yet that Tesla has gone this route for the Model 3.

The Return of Radar: Tesla ADAS in Flux

Tesla’s full self-driving (FSD) system has undergone significant shifts over the years. First came the removal of radar and ultrasonic sensors, followed by a heavy reliance on vision-only systems. But Tesla appears to be quietly walking that back.

Munro’s team notes visual cues that suggest the inclusion of a new radar unit in Project Highland. Combined with the upgraded Hardware 4 compute unit—featuring better thermal management and processing power—Tesla seems poised to enhance its ADAS (advanced driver assistance system) capabilities once again.

Hardware 4 uses a different form factor compared to previous Tesla compute units, and the camouflaged spy images show what appears to be a more square-shaped controller. This suggests Tesla is not just refining sensor placement but also integrating a higher-performing software and hardware suite.

Manufacturing Insights: Cost Isn’t Everything

While some elements of Project Highland reflect cost-cutting measures—such as simplified fascia design and fewer mechanical switches—Tesla’s choices are strategic, not just economic.

The move to gigacastings and structural battery packs offers long-term scalability advantages. In fact, it’s not necessarily about reducing costs unless those changes are paired with significant volume increases. Tesla’s lean manufacturing model is designed to simplify complexity and enhance margins at scale—especially critical in the competitive global EV market.

Moreover, the integration of updated materials, modular components, and reconfigurable interior assemblies shows how Tesla leverages design to support manufacturing efficiency. From injection-molded dashboards to consolidated HVAC and brake assemblies, the engineering story goes far beyond cosmetic updates.

Practical Takeaways: What Project Highland Signals

For engineers and EV investors, Project Highland provides a snapshot of Tesla’s maturing design language and evolving platform strategy:

• Modular Design: Tesla continues to reduce part count and streamline interfaces—traits that benefit both cost and reliability.

• Platform Convergence: The Model 3 is beginning to mirror design elements from the Model Y and Cybertruck, suggesting a unified design language and shared parts pool.

• Premium Feature Expansion: Additions like ventilated seats and enhanced ADAS hardware show Tesla is still adding value even in a refresh cycle.

• Manufacturing Scalability: Gigacastings, structural battery packs, and simplified interior elements point to greater factory efficiency and reduced build times.

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