Tesla's fix for AM radio reception - the Infotainment Upgrade, which removes the AM radio completely.
Many AM stations also have HD radio counterparts - which provides digital versions of that AM stations. And some of the stations are available using streaming apps.
As for fixing the AM radio reception with MCU1, the AM station reception was never great in our 2017 S before we upgraded to MCU2 and lost AM radio completely. Our 2018 X never had AM, since it came with MCU2.
Compared to my other vehicle, my Model S's radio has about half the range for both AM and FM. It's because of poor antennas and poor antenna placement (Musk is anti-shark fin.) Realistically, nothing can be done to fix it.