This is allegedly due to parts shortage of the Continental radar assembly. BMW is doing something similar with the 3 series, leaving out adaptive cruise control in this vehicle revision.

Tesla already said they want to remove radar and switch to all visual a while ago.

Yes, but they're now forced to do it far faster than they had planned.

They've had the entire autopilot team working on this for the past ~3 months.

There have been no real changes to autopilot or autopilot beta for that time, and the data collected by the car fleet has all been stuff for this change (no more detecting road markings, priorities or signage - it's all about detecting cars sufficiently reliably for emergency braking).

For Elon to effectively pause self-driving work for 3 months tells you this radar change was business critical.

Seems like a lot of the work to replace radar are things that are generally useful additions to the neural net.

It can also save 40+ million a year so its pretty nice from a business perspective.

I'm assuming radar-to-radar interference is also playing a factor where it would end up getting less reliable as more cars use it.