Optional but actually semi-mandatory. You have to manually accept the software update to install it, but there was recently a case reported of someone who was refusing to do this and stay on an old firmware. Over time, Tesla gradually deactivated things like navigation and entertainment systems (if I recall correctly), claiming that they had upgraded their APIs and they were no longer compatible with the owner's firmware. In reality I suspect they are just punishing the owner to coerce them into upgrading their firmware.