Tesla Model 3 update reportedly due next year with simplified interior, minor changes

The popular Tesla Model 3 electric sedan is set to receive exterior, interior and powertrain updates in 2023, according to a new report.

News agency Reuters claims the heavily-updated model – which is Australia’s top-selling electric vehicle – will enter production at Tesla’s Shanghai factory in China in the third quarter of 2023, as it approaches its sixth year on sale.

All examples of the Model 3 for Australia are now sourced from China.

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The redesign – codenamed ‘Highland’ – will reduce the number of components in the Model 3’s cabin, as Tesla aims to reduce production costs of the vehicle.

While the exact changes are currently unknown, it is expected to follow the updated Model S and Model X, with reference to the “airplane-style yoke in place of a traditional steering wheel,” but it is unknown if the Model 3 will receive this setup.

Those updates also introduced concealed air vents, a landscape-orientated 17-inch infotainment system and fewer buttons with the traditional stalks replaced by steering wheel controls.

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The cabin of the Tesla Model 3 is already minimalist as it has no digital instrument cluster or head-up display, with the speed displayed on the central touchscreen. It also lacks switchgear for most components, with nearly every function – except the hazard lights – controlled via the infotainment system.

In addition, the update “could also include some changes to… exterior and powertrain performance,” but it is unclear what these could be.

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It is unknown if the updates will feature on the Model 3’s mid-size SUV sibling, the Model Y; however, it is likely as both vehicles share almost all components and are built on the same assembly line.

"Over and over, we found parts that are not needed. They were put in there just in case or by mistake. We eliminated so many parts from a car that did nothing," said Tesla CEO Elon Musk at a Baron Funds conference earlier this month.

It is this approach that has allowed Tesla to become the most-profitable electric vehicle manufacturer. In the third quarter of 2022, Tesla made a profit of approximately AU$14,200 per vehicle, while Toyota – the highest-selling vehicle brand – is around AU$1940 per vehicle.

Reuters states Tesla has invested in large casting machines – known as Giga Press – at several factories to reduce manufacturing costs, with the ability to produce single, larger pieces of a vehicle during assembly to reduce cost and speed up production.