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What does this mean?

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It happens all the time.
 
it's "normal" but I agree - it's a stupid message.
No it's a useful communication of a change in driving dynamics. I use my regen to do almost all of my braking and my driving characteristics change if my regen is limited. I let off the accelerator sooner if this is the case. If you weren't being observant you'd have to hit your brakes more in this case.
 
I've noticed that when I drive out in cool (e.g. 50's weather), the regen will start off at a full or nearly full bar, but if I start regen braking a lot (going downhill for instance), then after a minute or so, the regen bar will show dots and I'll eventually get the warning message.

I've never seen the warning pop up after I've been driving 30 minutes or so, however, even if I'm going downhill for far longer stretches.
 
I think this message they replaced it with is meant to be a little easier to understand. Some might not know exactly what 'regenerative braking reduced' actually means. The new one tells you it may be necessary to use the brake pedal. Probably a legal/CYA kinda thing.
I think "regenerative braking reduced" makes more sense and straight to the point. "Limited deacceleration when accelerated is released" is something you'd expect to see from a poorly translated foreign user manual.
 
When I swipe left on this warning to collapse it, it just expands itself a few minutes later. Super annoying. Is there any way to clear it altogether?
If your Tesla Model Y has one of the more recent software releases you can set the Tesla Model Y's regenerative braking to blend the friction brakes when regenerative braking is reduced or unavailable. The transition from regenerative braking to friction braking works well and is barely noticeable. My Model Y no longer displays the dots along the power band that used to appear when regenerative braking was reduced. I have not observed the notice/warning as in the past.
 
If your Tesla Model Y has one of the more recent software releases you can set the Tesla Model Y's regenerative braking to blend the friction brakes when regenerative braking is reduced or unavailable. The transition from regenerative braking to friction braking works well and is barely noticeable. My Model Y no longer displays the dots along the power band that used to appear when regenerative braking was reduced. I have not observed the notice/warning as in the past.
(I have a Model 3 actually. I know wrong forum. But this thread was on point.)

Thanks. These instances of blended braking waste energy, no? Seems to partially offset purpose of normally capturing energy by regenerative braking.
 
Tesla will regenerate when it can, and use blended braking when it must. This is the most efficent that they can be with the reality of Physics.

Additional efficiencies can be achieved by the driver understanding the capabilities of their vehicle, and driving in the most efficient manner. The dash warning alerts the driver that regenerative braking is unavailable and they should not expect regeneration when displayed.
 
(I have a Model 3 actually. I know wrong forum. But this thread was on point.)

Thanks. These instances of blended braking waste energy, no? Seems to partially offset purpose of normally capturing energy by regenerative braking.
Yes, friction braking converts the kinetic energy from the vehicle's momentum into heat energy that is then not currently recoverable. The thing is when the battery is cold or when the battery state of charge is above ~90% you won't have very much if any regenerative braking anyway. Unless you can manage coasting for long distances when slowing and turning you will have to tap the brake pedal to safely reduce your speed. It is very disorienting the first time you lift your right foot from the accelerator and the Tesla vehicle does not immediately begin to slow under regenerative braking as had been the case all summer and well into the fall season. Full regener.ative braking will not be available until the battery temperature, i.e. when starting your drive, is again ~70F (21C)