Can Tesla Motors Inc. Solve America's Traffic Congestion Problem?


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Nothing makes Tesla (NASDAQ: TSLA  ) shareholders shriek louder than the mention of the possibility of a recall being announced. Don't worry -- the next one coming up is just another over-the-air software update, which means current owners don't have to do a thing. The update actually could make their lives much easier; it could eventually change life as we know it by using computerized logistics to take GPS to a new level for everyone on the road -- literally everyone.  

Back in January in an interview on CNBC, Elon Musk, CEO of Tesla, said that the software updates are similar to ones that occur on your cell phone. Unlike with vehicles made by other manufacturers, you don't need to physically bring in your car for service. Musk prefers the word "remedy" and even cleverly tweeted that the word "recall" needs to be recalled.

Safety first
Part of the reason why a recall of any motor vehicle sounds so scary to investors is that the word instantly causes fear about potential design flaws and safety issues. Nobody likes the public to be put at risk by a faulty product, a state of affairs that can be very expensive to fix, not to mention be potentially damaging to public perception of a company.

As with any new technology, some people are skeptical and apprehensive about Tesla's vehicles. Safety is an important selling point (and the Model S has been rated as the safest vehicle on the road), especially considering that the company has yet to spend a single penny on advertising and relies on the media and word of mouth to spread its reputation.

Perception is everything in terms of safety right now. Musk even said, during the company's June 3 annual stockholder meeting, that the underbody shields that Tesla now offers as a standard feature on its vehicles "aren't really necessary." He said half-jokingly that the shields would be sort of helpful "so that you can drive over concrete block[s] and be OK."

Not surprising, Musk was quick to remind everybody that there has yet to be a single major injury involving a Tesla vehicle. Not only did a guy drive "through two concrete walls at 110 miles per hour," but Musk revealed that apparently somebody literally drove off a cliff in one of the cars and walked away fine.

Customization
Musk announced that the newest software that will be coming to the Tesla Model S later this year will allow customers to personalize their cars. The vehicle will actually "learn your behavior" and automatically adjust to what you want.

Additionally, the software will be equipped with a new type of GPS on steroids. It will alert you to sudden changes in traffic and recommend other routes. But that's not what's truly remarkably.

What the software will be able to do is use the data from other Tesla vehicles as a priority data source for what's happening on the roads. This means that as production and sales continue to multiply and Tesla hits the mass market, then each car will be guided logistically to figure out the best path for each so as to ease congestion on the roads. Even those drivers without a Tesla will benefit from Tesla's vehicles being redirected away from congested areas.

Foolish final thoughts
Musk also said in that call, "So, as the number of Model S in the neighborhood increases, the quality of the traffic will actually improve quite considerably."

As long as Tesla helps clear the streets and continues its safety track record, count me in. I think others will appreciate it, too, which will allow a little extension in the time frame before Tesla has to begin advertising to really sell its products.

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  • Report this Comment On June 18, 2014, at 1:28 PM, ffbj wrote:

    Tesla has no plans to start advertising. They don't need too. Aside from that mistaken conjecture, the article was well written, and informative.

  • Report this Comment On June 18, 2014, at 10:57 PM, Haggy wrote:

    That's good news for Silicon Valley drivers. It's hard to hit the road these days without seeing a Tesla at some point, and undoubtedly it means that there are some on your route in areas that you don't see. There's also lots of traffic. Now if there were alternate routes, then we'd have something.

    The problem with navigation systems is that they are generally designed when cars are designed. Then by the time the car goes into production, they are a year out of date. So if you keep a car for six years on average, you have a navigator that's out of date by four years on average.

    Having something that can update itself regularly will help with the problem of paying $2500 for an options package that leaves you with less capability than the app on your smartphone, meaning the smart investment is often a phone holder.

    Now if Tesla could only explain why their navigator doesn't display speed limits like a four year old Garmin that's worth a hundred bucks at most, or why they didn't have more dynamic traffic as Google has been giving me all along. If they are still lagging behind and I find that my phone gives better routes, then their great big screen will make for a nice surface to stick a suction cup on.

    It's about time that Tesla starts balancing new state-of-the-art first-on-the-block features with everybody-but-Tesla-already-has features. They are still lacking some basic ones that they could easily add with a software update.

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