Tesla’s next big initiative may be a software update

Building something special?
Building something special?
Image: Reuters/Stringer
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Shares in Tesla are falling fast today (they’re down about 10% at the time of writing) after the car-maker’s latest results failed to impress Wall Street. That’s despite a quarterly profit that was actually stronger than analysts expected. (One analyst’s bizarre explanation for why the stock nonetheless fell: Sales ”beat, but not by as much as people expected them to beat.”)

But the next few weeks should be interesting for the company. It announced overnight that it has signed a letter of intent with Panasonic to partner on its “gigafactory.” That should take some of the risk out of the $5 billion project, designed to produce the lithium batteries Tesla needs to boost production and to build cheaper, mass-market models of its cars. And on an earnings call with analysts, CEO Elon Musk said he expects to “break ground” next month on two potential locations for the factory, which is expected to produce more batteries than the entire industry by 2020. (Why two sites? To minimize the risk of that the massive greenfield construction project won’t be completed). It will also be launching right-hand-drive vehicles in the UK.

But arguably even more interesting could be a long-awaited update to the software that runs Tesla’s vehicles. Here’s Musk on the earnings call:

We continue to make software improvements. So I think there is some very exciting software updates. They’re going to come out in the next few months that will improve the experience for the whole fleet of customers out there. And if anyone is thinking about asking me about that, I’m not going to say what they are, so it’s a lot of information as it is. But I think customers can certainly look forward to some really awesome functionality improvements in their existing car.

Musk has previously hinted at updates that could do things like adaptive cruise control and possibly better integration with smartphone systems, so that information from a phone can be projected onto the vehicle’s central display screen. A spokesman for the company said it “is aware of those features and we are continually investigating those technologies” but that remains focused on passive safety — helping drivers avoid accidents in the first place — rather than active safety.

There has also been speculation for a long time that Tesla will allow third-party developers to build apps for its cars’ interface. A spokesperson for the company told Quartz that this is not likely to be a part of the next software update.  Which is a shame, because for other technology companies like Facebook, Apple and Google (and Tesla, is first and foremost, a tech company), creating a platform for others to build apps on has been key to unlocking creativity and competition that the company itself cannot create alone.