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A new Tesla Model 3 prototype with camouflage has been spotted in California ahead of a rumored refresh coming next year.

Over the last week, there have been rumors that Tesla is working on a Model 3 refresh that would come during the second half of 2023.

The project is reportedly codenamed ‘Highland’.

For a few years now, Tesla has been integrating its large casting technology into Model Y with single large casting parts replacing dozens of parts in the electric SUV.

This new technology has enabled Tesla to greatly improve manufacturing efficiency with Model Y compared to Model 3. CEO Elon Musk said that Tesla will bring the same technology to Model 3 eventually, but he couldn’t exactly say when.

The problem is that such an update to the Model 3 would temporarily slow down production and Tesla couldn’t afford that while it was still ramping up Model Y production.

However, Model Y production is now starting to exceed Model 3 production and it could be good timing for Tesla to update the Model 3 and use a design refresh to introduce the large from and rear casting.

Now a new Model 3 prototype has been spotted in Santa Cruz, California by Twitter user omg_Tesla/Rivian:

The Model 3 is equipped with manufacturer plates, which would indicate that it is owned by Tesla, and combined with the heavy camouflage in the front and back of the vehicle, it likely points to the automaker testing an updated version of the electric sedan.

However, not much can be discerned from the pictures thanks to the camouflage, which even covers large parts of the headlights.

Nonetheless, some commenters on Twitter did notice what could potentially be a camera embedded in the corner of the front right headlight:

It’s barely visible and therefore unconfirmed, but it would make sense to place a camera around that spot since Tesla’s current self-driving sensor suite has a blind spot around the bumper and it could also help with the creeping forward to see traffic before taking a turn in Full Self-Driving – something FSD Beta has issues with right now.

Tesla has always said that it would keep improving its Autopilot and Full Self-Driving hardware, but current owners who bought vehicles with the promise that self-driving will be enabled through software updates are concerned that Tesla might find that it would need a new sensor suite to achieve the promise.

What do you think about this Tesla Model 3 prototype? Is the camouflage hiding a Model 3 design refresh? A new Autopilot sensor suite? Let us know what you think in the comment section below.