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Good Morning, you've been upgraded

The future of connected cars looks like this. Of course if you have a Tesla you're already experiencing this. And to give their newest customers a taste of the future (as if the Model 3 isn't enough) they are about to be upgraded. The latest firmware version (2019.8.2) will result in a "5% improvement to acceleration and performance". Try that with an internal combustion engine. In reality this means the Performance version will now have a top speed of 260km/h. Good enough for the Autobahn.

So in reality how does this work? Well the beauty of taking a technology approach to car development is that you build it to be more capable of what is initially released. Think of Microsoft Excel. Most of us don't even scratch the surface of what this 'calculator' can achieve (some large corporates today still rely on this heavily for very complex calculations). And if you take a forward view on development, in Elon's case learnt from previous models, you build future features and capabilities which you can either turn on for free or with a subscription fee.

From a manufacturing perspective it makes things a lot simpler. And simpler can mean massive savings in machine tooling and human manufacturing process design. Imagine you want to make a car with three different variants, and they are all something that isn't highly visual like engine power output, heated seats, battery capability. Instead of making three variants you make one. So I buy my new car, after adding some nice additional features to the base model and I love it. But after a year I want a faster version. No problem - I pay an additional one-off fee and BOOM my car goes faster. Or further. Or maybe I just want this for the weekend. Credit card debited and my car is transformed.

And this is a reality at Tesla. Not only will the latest firmware upgrade (software that tells the 'hard' parts of the vehicle to change the way they operate) make the car go faster, it will also go 24km further, increasing range from 500 to 524km's. In this case it was mainly due to having a years worth of data so they could safely extract extra energy and range from the battery without damaging it, but still how cool is that!

Musk says the growing body of usage data made Tesla confident that it could safely increase the efficiency of the motor and inverter. “We do find ways over time and have done this many times in the past where we are able to improve the efficiency of say the drive inverter or the motor or we get a bit more comfortable with how much energy you can extract safely from the battery pack without causing it long term harm.”

But don't expect Tesla to dominate this space for the foreseeable future. I have been in discussions with some of the worlds leading car brand representatives here in NZ, and they have alluded that this business model is coming. In fact we may even see the 'lease model with upgrades' become a bigger part of our car ownership future...

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