A camouflaged prototype Tesla Model 3 has been spied testing, though beneath its disguise it appears little has changed visually.

    Photos published by Coche Spias reveal exterior changes appear to be limited to tweaks to headlight and tail light graphics – if that.

    It’s possible this prototype isn’t the upcoming mid-life update, which is reportedly being referred to as the ‘Highland’ project, and could instead simply be testing upgraded camera-based advanced driver assist systems.

    It could also be an early prototype that doesn’t include the full gamut of changes, though Tesla’s cosmetic updates are famously mild.

    It’s definitely a manufacturer vehicle, based on the number plate, and not just one belonging to a fastidious owner terrified of paint chips.

    Camouflaged Model 3 prototypes aren’t necessarily a common sighting, and Automotive News reports an update is coming which will bring exterior and powertrain upgrades and a “less complex” interior.

    Tesla is reportedly aiming to cut production costs of the vehicle, and will do so by reducing the number of components it uses and simplifying its interior.

    The updated model will reportedly enter production in Tesla’s Shanghai plant in the third quarter of 2023, with the updates also set to filter over to Model 3s produced in the USA. All Model 3s sold in Australia are currently sourced from China.

    It’s unclear just what simplification the already minimalist interior will receive. The Model 3 has no head-up display or digital instrument cluster, with the speed displayed on the centre touchscreen.

    Switchgear is also virtually non-existent, with almost every function controlled via the screen.

    While it looks much the same, a 2021 update brought a new interior finish and a restyled centre console with an additional storage space and two wireless charging pads, as well as two additional USB-C ports for the cabin.

    Sources told Automotive News that Tesla is “focusing on features that Tesla buyers value, including the display”.

    “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,” Tesla CEO Elon Musk said at a Baron Funds conference a few days ago.

    Tesla has already simplified production by employing massive casting machines to produce single, larger pieces of its vehicles.

    Through decisions like this, it has become the most profitable EV maker. In the third quarter of 2022, Tesla made a profit of just over A$14,000 per vehicle sold, while Toyota was far back at approximately $1940.

    Tesla doesn’t follow the typical product lifecycles of vehicles from legacy automakers. Its Model S, for example, has been in production for a decade now and, though it has received various running changes over its lifecycle, its exterior has received only the mildest of updates.

    More noteworthy was a substantial interior update for 2021, which brought a steering yoke in place of a conventional wheel, concealed air vents, and a landscape- instead of portrait-oriented touchscreen.

    The Tesla Model 3 hasn’t been in production quite as long as its larger sibling, but it did go on sale in 2017. While it has received various tweaks and over-the-air updates since then, including the aforementioned detail interior changes, its exterior styling is essentially unchanged.

    Despite this, it has remained a hot seller in markets like Europe, the US and Australia.

    It’s the crucial Chinese market where the Model 3 has shown signs of fading. There, Tesla cut prices of the Model 3 and Model Y by as much as nine per cent last month, and sales for the Model 3 fell nine per cent in the first ten months of this year compared to the same period in 2021.

    In the first nine months of this year, Tesla’s share of the EV market in China was eight per cent, down from 13 per cent during the same period last year.

    Much of this comes down to increased competition, with various Chinese automakers tackling the Model 3 head-on.

    BYD recently introduced its Seal, due here next year, while EV brand Nio has its ET5 and Xpeng has the P7.

    MORE: Everything Tesla Model 3

    William Stopford

    William Stopford is an automotive journalist based in Brisbane, Australia. William is a Business/Journalism graduate from the Queensland University of Technology who loves to travel, briefly lived in the US, and has a particular interest in the American car industry.

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