Explainer - What's Known about Tesla's "Project Highland"?


Tesla plans to slow production at its Shanghai plant in the last week of February to prepare for building a revamped version of its Model 3 sedan, according to a person with knowledge of the matter and a planning memo seen by Reuters.

The move was first reported by Bloomberg News.

The automaker has not commented on the new version, codenamed Highland. CEO Elon Musk has said Tesla will talk about strategy and its product roadmap at its March 1 investor day.

Here’s what is known about the car:


The new version is expected to go into production in Shanghai in September, said the person with knowledge of the matter, who declined to be named as the matter was private.

With the new model, Tesla is aiming to cut production costs and boost the appeal of the five-year-old electric sedan, Reuters reported in November.

One focus will be reducing the number of components and complexity in its interior. There will also be changes to the exterior and powertrain performance with a focus on production efficiency.

The revamped model will also be assembled at its plant in Fremont, California. Building permits filed with the city of Fremont concerning changes to its factory have referenced “Highland” since last June.

Apart from the Cybertruck, it is the only new model that Tesla is retooling assembly lines for this year.

Tesla prototypes have been spotted in the United States in recent months which many believe are early versions.

The pre-production cars have all had their front and rear covered in tarp, prompting speculation that Tesla has changed the design and possibly added sensors or other features.


Tesla only has two main models globally. The Model 3 has been overtaken in sales by the Model Y crossover and analysts say it is due for a revamp.

The automaker’s global price cuts have boosted sales across the board, but the bump for the Model 3 in China shows signs of diminishing.

Sales of the Model 3 quadrupled in January after its base price was cut by almost 14%. But for the first week of February, sales were down by more than two-thirds from the end of January, data from China Merchants Bank International showed. In contrast, Model Y sales held steady.

Analysts say Tesla needs to up its game to avoid losing share to fast-moving rivals in China. Its approach of offering two main models has kept costs down but Chinese competitors have successfully wooed car shoppers with newer offerings.


No one really knows but many are guessing.

Tesla fans and armchair analysts speculate that “Highland” could be a reference to Ford Motor Co’s Highland Park plant, where Henry Ford launched his moving assembly line.

That could suggest Tesla sees the new model as a chance to introduce its own game-changing production technology.

Others, noting Musk is partial to movie references, see the name as a nod to the 1986 film “Highlander,” depicting a battle between immortals and known for the line: “there can only be one.”

SHANGHAI (Reuters)

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