Tesla leads the charge in Web-connected cars
Remember when the Internet was something you tapped into from home, and your car was something that got you from here to there? Now, of course, you (or, we hope, your passenger) can update a Facebook page or check a portfolio while cruising the interstate.
The market for Web-enabled electronics in cars is expected to skyrocket, and by 2017 more than 86 percent of the vehicles on the road will be connected, according to a forecast by IHS. By 2021, every new car sold in the U.S. will be connected.
"It's a sign of the times we live in where personal wireless connectivity is kind of a part of life," said Richard Wallace, director of Transportation System Analysis at the Center for Automotive Research, in an interview. "We just want to be able to get such data out of the cloud wherever we are and whenever we want it."
While many automakers are well down that path, Tesla (TSLA) is far out in front. Yesterday it announced plans to allow customers to upgrade the software in their Model S, whose sticker price starts at $70,000, so they could add new features such as the one that would allow autonomous driving.
Other carmakers, such as General Motors (GM) and Ford (F), have focused on providing Web-enabled infotainment features such as OnStar and MyFord Touch with mixed results. Most 2015 GM vehicles sold in the U.S. and Canada come equipped with advanced 4G LTE connectivity and a built-in Wi-Fi hotspot.
MyFord Touch has been especially problematic for Ford, which dropped Microsoft (MSFT) as the operating system for its next-generation infotainment system but will continue to support cloud services for Ford and Lincoln vehicles. Hybrids and electric vehicles such as the Nissan Leaf and Chevrolet Volt have also made advancements in these features.
Tesla, which is run by its founder Elon Musk, has hired many engineers from Silicon Valley, where continuous updating of software is a ubiquitous part of the landscape, so it's moves in this area make sense. The company views this capability as a huge selling point. On its corporate blog it noted: "Most cars don't improve over time. By contrast, Model S gets faster, smarter, and better as time passes. With Tesla's regular over-the-air software updates, Model S actually improves while you sleep."
"They are really the leader at doing this," said Egil Juliussen, an automotive technology analyst at IHS Technology, about Tesla. "Eventually, I am certain that everyone will need to do that, and I am certain that they will."
Shares of Tesla, which have slumped more than 11 percent this year, rose 1.2 percent to close at $198.08 on Friday.
Tesla's latest features are designed to address what's known as "range anxiety." The cars will now warn people if they're going out of range of a charging station and helps them reach their destination as quickly as possible. The Model S, which received the highest rating ever given to a vehicle by Consumer Reports, also added a slew of safety features, including one that will provide blind spot and side-impact warnings.
Tesla can deploy these features more easily than other automakers because its cars are powered exclusively by electricity. "Tesla is in a very unique position given the design of their vehicles and the way that their system works," said Eric Lyman, vice president of industry insights atTrueCar.com. "Within five years we will see that pretty much across the board. ... We will see more and more implementation of this technology."
One of the biggest challenges in developing these technologies involves cybersecurity. Some experts have warned of the potential of hackers gaining control of people's cars.
"Today you don't really have to worry about it that much," Juliussen said. "Over the long-term, it will be a very significant issue that all the automakers will have to solve."