Morgan Stanley Analyst – Tesla OTA Updates Could Make Other Automakers Obsolete

3 months ago by Steven Loveday 11

Tesla

Tesla Model S

Could Tesla’s innovative approach begin to make other automaker’s obsolete?

Tesla doesn’t rely on model years like legacy automakers, except when it’s forced to for CPO vehicles or to appease the traditional format of automotive reviews. Instead, the company continually updates its vehicles over-the-air. Additionally, as new hardware adaptations come along, often times they are added to all vehicles coming off the assembly line, rather than having to wait for another model year.

Morgan Stanley analyst Adam Jonas — who’s regularly spouting information regarding Tesla, and has been quite bullish with his predictions surrounding the electric automaker — has made mention of Tesla’s extreme level of innovation in the past. Now, he’s citing the company’s use of over-the-air (OTA) updates as one of many features that will inevitably pull Tesla ahead.

Inside the Tesla Model 3

Jonas has gone so far as to say that if traditional automakers don’t soon initiate similar capabilities, Tesla could make them obsolete. He shared similar comments in the past, related to Tesla Autopilot and its substantial edge over the competition.

According to Electrek, Jonas released a note to clients explaining that, although the Tesla Model S has been on the market for five years, almost no other automakers have followed suit with its OTA capability. He believes that by now one would think that others would have wised up. The note reads (via Electrek):

“The Model S is old – what’s everyone else’s excuse? We can understand that traditional car companies have held back on EV commercialization up to this point given low consumer demand and high losses. But we have a harder time understanding how almost no car companies have brought to market a car that is capable of over the air (OTA) updates of firmware. They continue to sell vehicles that are incapable of learning and improving and are highly vulnerable to obsolescence. Car companies have had ample opportunity to tear apart Model S’s in the lab. We suspect Tesla’s vertically integrated in-house software capabilities and its willingness to assume the risk of hacking make the difference.”

Jonas went on to share that Tesla doesn’t show fear of innovation. The Silicon Valley automaker pushes forward despite adversity and risk. His claims say that an executive from another automaker admitted to being worried enough about hacking to not take the plunge.

Additionally, although Jonas didn’t mention it, traditional automakers rely on dealerships to fix cars. There is a significant amount of revenue involved. One theory pertaining to legacy OEMs’ lack of promoting EV sales is because the cars won’t make dealerships much money in the service department.

Tesla isn’t out to make money fixing cars, and doesn’t have to deal with as many service visits, due in part to OTA updates. This is likely the last thing that other automakers hope for, which is sad because making cars that don’t need to be fixed often, and limiting people’s service department trips should be something that any automaker strives for. But, it’s not as financially viable.

Interestingly enough, Musk recently spoke at the National Governors Association Summer Conference and admitted that hacking is Tesla’s biggest concern. However, it has not stopped the company from innovating. Instead, it poses a challenge for the automaker to solve the issue ahead of any potential breach.

Source: Electrek

Tags: , , , , , ,

11 responses to "Morgan Stanley Analyst – Tesla OTA Updates Could Make Other Automakers Obsolete"

  1. notting says:

    OTA updates in a car…
    – will lead to more bananaware software – that’s something I definetely don’t want
    – are bringing functions with a big delay you’ve already paid for
    – will change the behavior more often so that drivers will get confused – currently software updates are usually applied when it was in a garage
    – can’t change hardware facts (there’s already a break in the Model S production where you can’t use all functions of the software in a too old Model S)

    BTW: AFAIK the owner has no chance to avoid such updates -> every driver of his car can start them…

    notting

    1. Seth says:

      Or you are stuck with the same 2007 navigation in your car for which they don’t even carry updates anymore.

      Android Auto, Apple Carplay, Spotify, not so much. From all the crap I’ve seen they use some 3rd party OEM for the dash thing that isn’t updated anymore after then 2nd model year.

      In the case of Tesla they are atleast updating the navigation and adding features at all. I mean, buy a new Hyundai Ioniq in NL and you don’t even see the Fastned chargers. That’s just silly.

      1. William Edwards says:

        My 2012 Prius still cannot properly categorize radio stations… Dealer just shrugged. As defects go it is minor, but really irritating to see Easy Listening on a Rock station and quite frankly sloppy. Much like this gen NOT having a USB port. 8-(

      2. notting says:

        I’m using my smartphone for navigation. If I bought a new one, I can still use it in my car or in other cars.

        notting

    2. Jay says:

      Notting you sound like a paid shill. Actually arguing FOR holding back technology.

      1. notting says:

        No, I just know e.g. from my computer how often bananaware is updated with new(!) bugs. And I hate that, don’t want to spend my hole life with updating and having new problems due to updates.

        notting

    3. Some Guy says:

      Yeah. OTA is terrible. The current strategy of everybody else is waaay better: to sell vehicles with unfinished software that is not improving after you purchased, and for critical issues you have to get to a stealership, waste your time and pay a shitload of money for some mechanic plugging in a cable and telling you that an update was done (without explaining what it was about).
      Then the car needs more fuel than before, but the manufacturer may escape a fine for cheating during sales…
      If you want updates for built in Navigation system, its 300 Euros per pop, and you get a new CD (the data you recieve with that update may be 1-2 years old, depending on the manufacturer, if available at all).

      PS: That was sarcasm.

      Tesla’s are awesome! Last week I saw three different ones on the road, here in Diesel country.

      1. notting says:

        I didn’t say anything against updating bad software.
        But without OTA, several possibilities to attack a car simply don’t exist, e.g. https://ics-cert.us-cert.gov/advisories/ICSA-17-208-01

        Of course, software quality improvements are definitely necessary. But technically updates can still be done offline. Yes it will lead to more unhappy users, but hopefully they’ll give more feedback to the manufacturer so it’ll be more done concerning software quality.

        notting

  2. ffbj says:

    Yeah, it’s a feature people love and other cars don’t have it. It’s counter experiential to car owners, who, once they are sold a car, are treated like red-headed step children by the dealer who sold it to them.

  3. JR says:

    OTA software is, must and will be standard in all new cars there is now way around that, it just importent that it can be done in a safe way.
    About features
    And a car last about 15 years, a phone 2 years, so i hope there will be some modules that can be changed in the center console so the Tesla and other new cars can keep up with at least some of the new funktionality and speed!
    Ps:The Tesla navigation in the dashboard realy needs an update

  4. deijmaster says:

    Nothing new here… GM and Porsche [just to name a few] do exactly the same… Tesla has not invented anything, just a “better packaging” and perception… nothing more.

Leave a Reply