Automobiles: Computers On Wheels

in LeoFinance3 years ago

The automotive is changing right before our eyes. This is something that many have sensed yet few realize to what extent this is happening.

Obviously, the shift towards Electric Vehicles is enormous. If this really starts to hit mainstream numbers, which many believe will happen in a few years as models reach parity with ICE, then we will see a radical shift taking place.

However, that is not even the biggest difference.

Of course, there is talk about autonomous vehicles which will drive themselves. This is also a possibility and will be a total game changer. As I type these words though, it is still a dream. There are certain advancements that were made yet there are no fully self driving cars right now.

Hence, we probably have a few more years before the technology is even available.

There is something that is in place today. In fact, it is one of the biggest innovations that Tesla introduced to the car industry, something most overlooked.

The majority of us have smartphones and computers. It is not uncommon to receive updates periodically. Hell, if you use Windows on your laptop or PC, you get updates about once a week, and they usually screw something up.

While we take this for granted in the computer world, it was unheard of in the automobile industry. Think about that for a second. A $50 smartphone could receive updates yet a $75K automobile had to be taken into a service center.

As stated, until Tesla introduced that to the world. They were the first ones to offer over the air updates. In fact, until recently, they were the only ones.

Thus, it was possible, in some ways, that Tesla cars got better as time went by. For everyone else, things got worse.

It looks like the industry is finally catching up to Tesla on this one.


Porsche introduced their EV, the Taycon, and it is now looked at by the company as a 5,000 pound computer. This is exactly how Tesla viewed their vehicles ever since before Musk's second master plan.

Essentially, these companies are starting to see how cars are going to be Software-as-a-Service platforms. Instead of just selling the car, software products will be delivered. Many will be free, some will not. Here is where the automakers can hope to squeeze some extra profit out of the deal.

For Tesla, the self driving package is the best example. People can buy this for $8,000. While the hardware comes with the car, the software costs extra. Of course, the full self driving capability is not available yet so it is buy and wait. Some features are delivered which helps to train the system.

There is also an entertainment platform that people can subscribe to. Since each car is connected, this can be accessed for a monthly fee. While a company like Tesla has relatively few cars on the road, imagine what a Volkswagon could do if this feature was available to every car on the road.

Software-as-a-Service is the model that Apple used to perfection. Yes, it made gobs of money selling the IPhone. However, the last few years saw their services revenue explode. As they offered more options to people, they revenue per phone increased.

It doesn't take a lot per phone to add up when you sold more than 1 billion of them.

The automakers hope to follow suit. As people spend more time in cars with advanced features, or when full self driving becomes available, there is going to be a grand opportunity to offer services to their customers.

Since we live in a subscription world, this is nothing new. In fact, people will likely transition very easily.

Developing this capability will mean a lot to the car companies, especially the likes of Volkswagon, GM, and Toyota. These companies deliver the most cars a year meaning their install base with these new features can easily surpass that of Tesla. Right now, it is slow rolling out but if they can have it across their entire product line in a couple years, that will be millions of cars with it. That could be some massive revenue.

The advantage to software is the profit margins are insane. It is one of the ways Tesla believes it can push an industry leading gross margin. However, this will not be the case if the others follow suit.

So, down the road, we can expect that all will be offering our favorite shows on Netflix. There will be different packages available for entertainment. That said, the real money is in what they design themselves. The over the air update is great for things that are required to increase performance. However, it goes to a new level when something new is introduced and sold as an option.

For example, in one of its models, Tesla offered a software update for a few thousand dollars that actually sped the vehicle up. This was something they designed and most of the revenues were profit. Whatever the number sold, it was simply announced, the user selected on the control panel, and their credit card was charged. This software them was updated with the new feature.

When a company views its product as a computer on wheels, an entirely different world opens up.

It appears this is how many of the companies are now seeing things.

If you found this article informative, please give an upvote and rehive.

gif by @doze


logo by @st8z

Posted Using LeoFinance Beta


Tesla was ahead of the times but being out in front and first can often times cost you big in terms of $. Other companies will make you foot the bill to "figure it out" and once you do they spring into action. The space is about to become very competitive.

Tesla posted better then expected numbers which I found surprising and I wonder how much of it had to do with accepting bitcoin. I'd be curious to see the numbers on that if possible.

It's also interesting about buying "upgrades" when really the car is capable of already doing it. I'm sure it comes at an expense. What could be interesting is buying an software upgrade for the type of performance you want and perhaps triggering it at will. Less power long travels, performance short distance or off road etc. could all very well be possibilities if they don't already offer it. LIke you said though the profit margins on that plus other cool innovative features they can implement into the electronic car really is huge and can quickly turn your $30,000 car into a $45,000 expense just on upgrades and additions buying games, software etc through the cars dashboard.

 3 years ago 

I dont think they started to accept Bitcoin as payment yet. Besides, anything that is paid in Bitcoin will be on the income statement as value at the time of the sale. The BTC that is held shows up on the balance sheet but that is not in the earnings until sold. They made over $100 million on the sale of their 10% stake during the quarter so that was in the earnings. It wont be a quarterly thing (unless they decide to keep selling their BTC).

Posted Using LeoFinance Beta

Interestingly, when Tesla wasn't invented and Elon made the impossible, possible, we wouldn't have seen computer on wheels today. The traditional car industry was experimenting with eg self-driving cars for the last 3 to 4 decades. When I was in Uni back in the late 80s/early 90s, I was already exposed to these tests. But none of the car manufacturers took this a step further. I have no clue why not, but they didn't. The transition towards the computer on wheels, was maybe a too large transition none of the established businesses wanted to burn their profits on. But now they need to, to even stay relevant, and they all know it, hence they all start to develop and deliver cars similar to Tesla.

This is very similar to what we call today: Hyperloop. Same thing. 30 to 40 years ago, such technology (vacuumed pipes) was already marked as THE technology to move super fast from A to B whilst energy consumption minimised. Very expensive to build, so no government or privately held company is taking the task to make it happen. Again we need Elon with his Boring company to kickstart this transition.

Back to cars: Next transition should be to force car owners to share their cars with others. Most of our cars are sitting idle for 90 to 95% per day. Most of our roads are gridlocked. We need a lot of taxpayers money to expand our roads. The solution to all these problems is: Sharing cars. Think of this: When cars are indeed 100% self-driven and allowed by our governments/societies to drive around 100% self-driven, finally we have the ultimate personal transformation vehicle. A vehicle that brings us from start to destination without having to switch vehicles, a vehicle we can enjoy like we are sitting in a bus or train, ie we can do whatever we want, from reading a book, watching a video, work or whatever. When we include the shared concept to this puzzle, it's like a taxi. We don't have to store the car somewhere anymore, we just call for a car that will pick us up wherever we want.

Posted via

ack to cars: Next transition should be to force car owners to share their cars with others.

Sorry to disagree. While I think robotaxis will eventually become the norm, I dont think people should be "forced" to do anything with their property. That is not freedom.

People who want to, sure go ahead and do it.

Should governments force you to accept some homeless person to live in your home simply because many nations have homeless issues?

Posted Using LeoFinance Beta

'Force' can be applied in many ways. In the end, it's a cultural shift we need.

ps The other example you gave is a typical discussion blocker. To that point: I believe society shall be caring and helpful to those in need. You're from the USA where society is not giving support to those in need (homeless people in this case), hence you have many of them. I'm from the Netherlands, and we do provide support to those in need, hence we have the occasional homeless person only (with most homeless people being homeless by choice). Whether it is our government paving the path of such a culture of us supporting others, or we as a society decide to do so by ourselves, doesn't matter to me. I suppose we see the difference between the USA approach and the Dutch approach which hints towards a conclusion we can draw on what works and what doesn't work.

I can't wait for self driving car tech to be upto scratch. Means no more designated driving for me!

Although ill probably be an old man by then and one will leave me half cut

Posted Using LeoFinance Beta

It is one of those technologies that is truly a game changer for the entire world. How close are we to it? Nobody knows. This is something that was talked about for years.

We do appear to be inching closer for whatever that is worth.

Posted Using LeoFinance Beta

EV is definitely the future, it's a more efficient and greener way than running your car on Gas.

Although Tesla has been in the space for years, developing high-tech EVs but other big automobile giants are keeping up space. Most companies, like BMW, Honda, Nissan, or Ford are now coming up with their fully electric or hybrid models that are much cheaper and hopefully better performing than their Tesla equivalents.

But the thing with Elon Musk is that he thinks way into the future and while everyone is trying to cut their market share, he might come up with something else.

Maybe EV that turns into a plane with a switch of a button. Who knows!

Posted Using LeoFinance Beta

Maybe EV that turns into a plane with a switch of a button. Who knows!

I am not sure if they are working on that one but who knows. It is possible.

The competition appears to be catching up, or so we think. The normal mindset is to view these entities are car companies, so on this end of things Tesla is going to get crushed.

Yet, to those who think Tesla is more than a car company and is building a much bigger puzzle, they tend to envision a different future for the company.

Posted Using LeoFinance Beta

Bang, I did it again... I just rehived your post!
Week 55 of my contest just can now check the winners of the previous week!

I don't think Tesla would lose their lead at all because they have just way too much data and they continue to generate that data. I do think the problem with Tesla right now is that there is no real cheap version available for sale right now. I know they are working on it but it will it will really depend on prices to decide. But I do think Tesla will be at the top of the industry.

Posted Using LeoFinance Beta

I think you are covering a couple issues.

Yes with the self driving, they are way ahead with data. However, over the air updates, something only they had was another advantage. This one is disappearing as the other companies start to develop "upgradeable" cars.

Posted Using LeoFinance Beta

"Upgradable cars" is an interesting issue but I wonder when it will start. I think Tesla is the only one doing it right now.

Posted Using LeoFinance Beta

Cars are expensive to own as it is and I'm not a fan of the idea to buy software for them, so I'm going to buy an "android" car in the future instead of a car follows the apple model that tries to squeeze every cent out of you

Posted Using LeoFinance Beta

Good thing the computers don't crash three times a day, like in the 90s.

Interesting message. reblog. I think your words make sense and those who are lucky enough to live another 10+ years will see how more and more cars will be examined primarily by software.

Posted Using LeoFinance Beta

 3 years ago Reveal Comment

There is no doubt cybersecurity is vital. Hacking is a way of life these days and companies have to do all they can to prevent that.

For this reason, we are seeing multiple computer systems put into the cars. With Tesla at least, it is a completely different computer for the automation versus the entertainment. Hacking the later does not get one into the former.

That said, still not a ton of protection but it is something. Decentralization is going to be key. They will need to keep spreading things out as much as possible.

Posted Using LeoFinance Beta