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What exactly does “Trailer mode” do.

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I use AP and keep Trailer Mode disabled when using a hitch-mounted bike rack on my Model Y. No loss of functionality and no annoying beeps. You'll see two yellow warning curves on the AP visualization, but AP still works fine. I have FSD and it can even auto-lane change without any issue. It uses the side cameras for lane changing so having the rear camera and parking sensors blocked has no effect on it.

The only thing I notice is when in Reverse, it does beep. But I consider that a positive, so its an audible reminder to myself that a bike rack is mounted, so I give myself extra space when backing in. The whole system works so seemlessly I often forget that I even have a bike rack back there!
You can turn off the beeping. Don't ask me where the setting is after the v11 UI change, but you can disable it.
 
How do you tell if have you Trailer Mode? I purchased the hitch from Tesla and assume they also installed the software. I have the little trailer icon when I connect the electrical but no where in the UI can I find Trailer Mode. Even when I unplug the electrical there's no option to enable or disable Trailer Mode.
 
How do you tell if have you Trailer Mode? I purchased the hitch from Tesla and assume they also installed the software. I have the little trailer icon when I connect the electrical but no where in the UI can I find Trailer Mode. Even when I unplug the electrical there's no option to enable or disable Trailer Mode.
If you purchased the Tow Hitch option from Tesla you have the Trailer Mode software. That is demonstrated by the fact that when you connect a trailer to your car the blue trailer icon appears automatically. You can turn Trailer Mode on and off in the controls on the center display.

Di you consult your user manual? It is accessible through the center display. It is also available online at https://www.tesla.com/ownersmanual/modely/en_us/GUID-F5C80FF5-8DE3-4750-8BAF-0DCC0CFA0C5C.html

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See, that’s the thing. I don’t have Controls > Pedals & Steering > Trailer Mode. It doesn’t exist whether or not I have something plugged into the 7-pin plug. The trailer icon is there in the first pic. I unplugged the 7-pin and was expecting Trailer Mode to show up since it says in the manual that it doesn't automatically disengage but it look like it does. Maybe it's a new version of the tow software? I had the hitch installed this April and now about to go on a trip using it.

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See, that’s the thing. I don’t have Controls > Pedals & Steering > Trailer Mode. It doesn’t exist whether or not I have something plugged into the 7-pin plug. The trailer icon is there in the first pic.
Your trailer icon appears to be yellow. The manual states that means an electrical connection has been detected (the cable you plugged into the socket next to the hitch) and “It is likely a carrying accessory has been connected”.

The car may not be detecting enough resistance in the trailer circuit. If I recall correctly, there has been discussion on TMC in the past about this; some trailers with LED lights may show such a low resistance in the circuit that the car does not think there is a connection to an electrical circuit, so the software doesn’t activate Trailer Mode. I may have that wrong. Search the forums.

Tell us about the trailer you have connected and hitched up to the your Y.
 
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I read that as well about the electrical connection and I’m fine with that. All the lights works as they should. It still doesn’t explain that if I have the software, I should be able to manually engage Trailer Mode from the onscreen controls but that option is not available at all. I can’t bring it in as the earliest appointment is after i leave on our road trip so it will have to wait. Here’s what I have. Thule Transporter Combi.
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Every review I've been able to find on Youtube about Trailer mode is before (most are a year old) when I got mine installed in April 2022 and so it's possible that Tesla updated the Trailer Mode software to prevent you from manually engaging? I'm on the latest software (2022.12.3.12).
 
Here’s what I have. Thule Transporter Combi.
Thank you. In your case it appears that the Model Y user manual statement “It is likely a carrying accessory has been connected” is relevant.

You are not “towing” anything. It’s like mounting a bicycle rack on the hitch. Trailer Mode will not activate.

I still suspect that the circuit resistance in that Thule box is too low for the car.

Try hitching up a trailer and see what happens.
 
Every review I've been able to find on Youtube about Trailer mode is before (most are a year old) when I got mine installed in April 2022 and so it's possible that Tesla updated the Trailer Mode software to prevent you from manually engaging? I'm on the latest software (2022.12.3.12).
I have exactly the same software, 2022 vehicle but the old harness (12V Lead acid battery). Factory hitch. The screenshot is with no trailer attached. I am able to put it in trailer mode as shown.

Perhaps you can put in a service request and they can push a software update to you remotely. I would try that.

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Every review I've been able to find on Youtube about Trailer mode is before (most are a year old) when I got mine installed in April 2022 and so it's possible that Tesla updated the Trailer Mode software to prevent you from manually engaging? I'm on the latest software (2022.12.3.12).
I got the tow hitch installed a month ago at Tesla (on my 2021 Y). The new "trailer" setting appeared on my menu (2022.12.3.6 here).

Could be they forgot to install the software, but I also heard the new lithium battery isnt 100% compatible with the tow hitch accessory port. Something to do with voltages I think (15V vs. 12V??), apparently something needs to be installed downstream, like an adapter or something, to make it work right. No idea on the status of that. I did make a note of it in a thread I keep regarding MY changes over time. Most updates in that thread are from hearing from various owners, but its the best info I can get.

That said, you should still be able to manually do it. I'd think. Hopefully they just need to change a flag in your SW configuration.
 
I got the tow hitch installed a month ago at Tesla (on my 2021 Y). The new "trailer" setting appeared on my menu (2022.12.3.6 here).

Could be they forgot to install the software, but I also heard the new lithium battery isnt 100% compatible with the tow hitch accessory port. Something to do with voltages I think (15V vs. 12V??), apparently something needs to be installed downstream, like an adapter or something, to make it work right. No idea on the status of that. I did make a note of it in a thread I keep regarding MY changes over time. Most updates in that thread are from hearing from various owners, but its the best info I can get.

That said, you should still be able to manually do it. I'd think. Hopefully they just need to change a flag in your SW configuration.
I wondered about that as well, but the issue is supposed to be only providing 12 volt power to trailer accessories (like a refrigerator), not the lights.

But, who knows for sure? Maybe someone out there with the Lithium harness can weigh in.
 
I got the tow hitch installed a month ago at Tesla (on my 2021 Y). The new "trailer" setting appeared on my menu (2022.12.3.6 here).

Could be they forgot to install the software, but I also heard the new lithium battery isnt 100% compatible with the tow hitch accessory port. Something to do with voltages I think (15V vs. 12V??), apparently something needs to be installed downstream, like an adapter or something, to make it work right. No idea on the status of that. I did make a note of it in a thread I keep regarding MY changes over time. Most updates in that thread are from hearing from various owners, but its the best info I can get.

That said, you should still be able to manually do it. I'd think. Hopefully they just need to change a flag in your SW configuration.

I was thinking they forgot to install the trailer mode software but then why would I get the trailer icon if it wasn't? or is that just included in all Model Ys and then I just need the extra bits? I looked though my work order and it doesn't show anything specifically about installing software only that they completed the Model Y Tow Package and "verified proper operations".

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With all the differences between the X and the Y with trailer mode, I'm unsure if this feature is on the Y. With the X your range estimation will calculate lower arrival percentage when tow mode is on.
Same on the Y. With the lower range, energy graphs predictions and trip planner charge stops are both modified when trailer mode is activated. This for me is why we also need a dedicated mode for hitch bike racks. While efficiency is much better than with a trailer, at highway speed I reckon it’s 10-15% worse than normal, such that this needs to be accounted for when trip planning.
 
With all the differences between the X and the Y with trailer mode, I'm unsure if this feature is on the Y. With the X your range estimation will calculate lower arrival percentage when tow mode is on.
Same on the Y. With the lower range, energy graphs predictions and trip planner charge stops are both modified when trailer mode is activated.
When I first started towing with the X in 2018 that range estimation adjustment had not been implemented. I wish it was more sophisticated as even for my relatively small and lightweight trailer it does not reduce the range estimate enough. It needs to be adjustable so that you can experiment and determine what the correct reduction will be. It could be calibrated by towing a set distance on a level, dry road at a fixed speed with no headwind to determine the increased energy usage.

In trip planning situations where I am not confident that I can successfully get from one charging stop to the next I use the EV Trip Optimizer for Tesla app developed by Chris Couper. See Digital Auto Guides | Bringing mobile technology to emerging automobiles.

It is very good.
 
When I first started towing with the X in 2018 that range estimation adjustment had not been implemented. I wish it was more sophisticated as even for my relatively small and lightweight trailer it does not reduce the range estimate enough. It needs to be adjustable so that you can experiment and determine what the correct reduction will be. It could be calibrated by towing a set distance on a level, dry road at a fixed speed with no headwind to determine the increased energy usage.

In trip planning situations where I am not confident that I can successfully get from one charging stop to the next I use the EV Trip Optimizer for Tesla app developed by Chris Couper. See Digital Auto Guides | Bringing mobile technology to emerging automobiles.

It is very good.
I 2nd the range calibration point. It ought to be able to do that.
 
I 2nd the range calibration point. It ought to be able to do that.
I think they are making the range estimation more accurate in recent updates, using more environmental conditions, so I imagine it would be better suited to provide accurate info when towing. Of course, this only helps the 'Miles' displayed if they no longer tag it to the EPA rating. For 'Percent' it should be more accurate. I haven't gotten an update in a while so I can't say whether it's effective or not.