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2021 Model 3 came with Tesla USB stick

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That's what the 2020 manual says.
But when talking about music on a usb stick, it says


But the manual I have is almost a year old, so I was wondering if the media player fat32 limitation has changed.

Guess I should try out a few formats and see ...

The "must be fat32" instructions are old. exFat is currently supported, and in fact is what the car formats the stick to when you format it in the car, I am fairly sure.

Fat32 is still supported, but if you use a partition larger than 32gb, you have to jump through a few hoops to format in fat32.
 
I have this same question. I have a Samsung USB SSD that I've been using for 1.5 years now, after partitioning as advised at the time (FAT32, two partitions, TESLACAM for dashcam and MEDIA for music). My car does NOT have a USB in the glovebox (Nov 2019 build). I tend to get file system errors with the TESLACAM partition when plugging into Windows, and I am wondering if I should be using exFAT for that partition now. Now issues with the MUSIC partition.

I wish Tesla was more clear about this. The manual just seems out of date...