As Price Drops, Tesla Model 3 Refresh ‘Project Highland’ Spotted In California

The Model 3 refresh may be coming sooner rather than later — and the discounting of Model 3 inventory could be a prelude to the update.

The so-called “Project Highland” was spotted by The Kilowatts (via Teslarati) on public roads in California.

Highland Model 3 modifications include “new headlight designs and Hardware 4 cameras, which are now being installed on Model S, Model X, and Model Y vehicles,” according to Teslarati.

A rear diffusor was also spotted.

“The earliest iterations of the Model S Plaid were fitted with diffusers, which are used to increase downforce at high speeds by accelerating low-pressure air beneath the car and channeling it through the rear portion of the vehicle,” Teslarati explained.

The Model 3 refresh is expected in the third quarter, Ryan Levenson of The Kilowatts, told me in an email. Levenson snapped the images of the camouflaged Model 3.

New high-volume product that Musk has been alluding to?

CEO Elon Musk showed a silhouette (below) of a “new product” at the 2023 Annual Shareholder Meeting in May.

“I just want to emphasize that we are actually building a new product…we are actually designing a new product…we’re not sitting in our hands,” Musk said in May.

Previously, in March, Musk showed a slide (also below) at its Investors Day event of two vehicles — concealed by sheets.

Lower price

Tesla has been cutting the price of the Model 3 in inventory, positioning the Model 3 — with the tax credit — as one of the least expensive EVs in the U.S.

With the federal tax credit (full $7,500 credit eligibility happened this week) the price has approached $30,000 in some markets. And potentially much lower if you include state rebates ($2,000 is typical in California but can be as much as an additional $5,500 in some cases in California for a total of $7,500 from the state).

One theory is Tesla is trying to liquidate inventory ahead of a Model 3 refresh.