Wall Street Journal: EVs Are More Software Than Hardware, Tesla Leads

People have been saying for years German brands will soar past Tesla since they're so good at making cars, but what about software?

2021 Tesla Model S

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By: EVANNEX

Feb 16, 2021 at 9:44am ET

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Posted on EVANNEX on February 16, 2021 by Matt Pressman

In the race to catch Tesla, some have underestimated the Silicon Valley automaker. William Boston reports in the Wall Street Journal, "For years, industry leaders and analysts pointed to the German [automakers] as evidence that, once unleashed, the old guard’s raw financial power paired with decades of engineering excellence would make short work of Elon Musk’s scrappy startup."

Above: A look at the Tesla Model 3 (Source: EVANNEX; Photo by Casey Murphy)

"What they didn’t consider: Electric vehicles are more about software than hardware. And producing exquisitely engineered gas-powered cars doesn’t translate into coding savvy," according to WSJ.

Ever since Tesla launched its first car in 2008 “there was this feeling that the really serious players are going to come,” said Peter Rawlinson, CEO of electric car startup Lucid Technologies and the former chief engineer of Tesla’s Model S. Now, he says, “the Germans have finally come, and they’re not as good as Tesla.”

"With the shift to electric, computing has become the heart of the vehicle, with a central processor managing the battery, running the electric motors, brakes, lights and other critical systems as well as additional features such as entertainment or heating in the seats. Just like a gas-powered car should be serviced regularly, a modern electric vehicle may receive software updates to improve safety and performance, offer new in-car services, or unlock sources of revenue for the manufacturer," according to WSJ.

“In order to be successful in this new world and secure the prosperity of many people…VW must completely change,” Volkswagen CEO Herbert Diess wrote in a recent LinkedIn post.

In turn, "When Mr. Diess, then head of the VW brand, launched his first EV effort five years ago, he asked Fredmund Malik, an Austrian economist, to hold a 'syntegration workshop' for senior brand executives. The goal, Prof. Malik said, was to persuade managers lulled into complacency by their company’s high profitability that Tesla represented an existential threat."

"Prof. Malik said Mr. Diess posed a simple question for the group: What do we have to do to catch up with Tesla by 2024? The CEO opened the gathering with a blistering critique of VW’s progress. He showed a slide comparing the ID.3 to the Tesla Model 3, pointing out that while VW’s car excelled in old-world features such as spaciousness and design, Tesla beat VW hands down on such metrics as battery range and advanced computing," reports Boston.

“Over the past 20 years the auto industry became more integrators than developers,” says Alexander Hitzinger, a Porsche and Apple veteran. “Software is written by suppliers. This was good for a while because it drives down costs but you lose control. That’s what the auto industry has to reverse now, bring in deep technical knowledge. That’s the hard part.”

“The key here is taking this distributed system in the car, dozens if not hundreds of applications, and centralizing everything,” says Danny Shapiro, senior director of automotive at Nvidia Corp., the graphics chip maker that has become a player in self-driving car technology. “This is very complex, especially with a car where the safety level is critical. You can’t just flip a switch and be a software company.”

According to Dirk Hilgenberg, a BMW executive and IT specialist, "The biggest challenge... isn’t the technology, it is the mind-set of the people—their reluctance to embrace radical change until circumstances force them to."

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