I’ve written before how Tesla is disrupting the automotive industry and how I believe this will ultimately benefit the entire automotive industry (August 2020: https://www.linkedin.com/pulse/why-tesla-might-auto-oems-best-friend-neale-foster/?trackingId=abX3oOM88mdsKDBrcmeMSQ%3D%3D).
My fundamental argument was that in 2020 Tesla’s stock market cap passed that of Ford and GM combined, not because of the number of cars it sells, but because, unlike the OEMs, Tesla is rated by the financial community as a tech company. This is a perception the OEMs will think is unfair, and I would agree, given that today’s cars have over 1 million lines of code, reportedly more than a modern fighter jet!
My conclusion was that however well Tesla is doing in 10 years from now, its main impact will have been to show car OEMs how they can profit from the car becoming a software product/service, leading to the OEMs being rated as tech companies too.
Today, I’d like to look at the recent refits for the Tesla Model S and Model 3 and, in particular, at the Tesla In-Vehicle Infotainment (IVI) experience. My thoughts are underpinned by the shift towards the in-car experience being more of a differentiator than engine performance, which will be flattened by the move to electric powertrains.
The new $80,000+ Model S, to my eye, looks too austere. It’s certainly not my idea of a luxury experience. Looking at Tesla IVI entertainment services, the video offering is limited to Netflix, Hulu, YouTube and Twitch. Given the way that video will be consumed in the car before level 5 autonomy is here, I believe the car needs video experiences explicitly designed for this unique environment. Transplanting services intended for the living room just won’t cut it, although I do think that YouTube is excellent for in-car video snacking. Streaming music services are included, which are significant, but from my experience at ACCESS are fast becoming table stakes. Tesla provides some games too, but they probably won’t hold the attention for that long and will not be played at all by many Tesla owners. Summing-up, the entertainment experience feels like a bit of a tick-box exercise, rather than something Tesla can use to build a long-term relationship with their customers.
The latest Tesla refits feel lacklustre and certainly don’t offer anything to scare the OEMs. Tesla has shown that customers will pay for entertainment and connectivity packs – it’s now up to the OEMs to show how to use connectivity to provide in-car experiences that will wow car users.
Working on IVI projects with many of the world’s leading car brands, I know this is a challenge they understand and that they have the resources and partners to provide car users with exciting in-car experiences that really will deliver the required wow factor.