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About half of the time I used the app in my AW S8 (the app was at the foreground and watch's scrren showed the app), the door did not unlock when I pulled the handle. I would try a number of times and then gave up and pressed the "Lock" icon on the watch to uplock the car. It seemed to me that the watch was able to communicate with my Tesla M3 but somehow the auto-unlook did not work half of the time.

Any advice on how I can improve such situation?
 
Don't want Auto Unlock, but would like unlock by a button on the watch. Watch is older series 3. Will this work?

The use case is my wife sometimes wants to leave her purse (w/iPhone and wallet incl key card) in the car. (Not wise, we know, especially here in Oakland, Calif.) I keep my iPhone in a pocket, but ladies' clothes tend to lack pockets. Anyway, if she can lock and unlock the car while her iPhone is still in the car, that would be nice.

Your App Store description says works with "compatible models" but does not specify which models of what device, i.e. car, iPhone, watch? Thanks!
 
Regarding the background walk-up-unlock feature, this may be a hint about the difficulty in the implementation: Watch for Tesla claims to have this, but deep in their FAQ they say "Background Bluetooth support for passive entry on the Apple Watch requires a series 6+ watch and watchOS 9+." (link)

I bought that app long ago, but their updates broke it and deleted it from my older watch, sigh.