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Elon Musk: No App Ecosystem Coming For Tesla, Favors App Projection

|Includes: Tesla, Inc. (TSLA)

On March 9th, 2013, Elon Musk attended the opening of the Tesla Gallery at the Austin Domain and chatted with attendees including myself. A young woman from National Instruments told Elon she and some of her friends were really excited about the potential to write apps for the car and wondered when the SDK might be available to start on that. I don't recall Elon's exact answer, but it was something along the lines of potentially having something ready by the end of the year.

That Tesla was going to support apps wasn't new information as Elon had been making comments out about for a while (Tesla CEO: Model S will support third-party apps - venturebeat.com/2011/03/16/tesla-app/); however, it seemed like the day was nearing which was exciting. However, flash forward to 2016 and Tesla still has not delivered on this vision, and at a meeting yesterday in Hong Kong, Elon dashed the hopes of those of us who have been waiting patiently for that day:

"With respect to apps, when will be able to download apps into the Model S? As we've sort of thought about it more, the logical thing to do from an apps standpoint is to maybe allow apps on your iPhone or Android to project onto the center display as opposed to create a new App Ecosystem. That is probably going to be our focus in the future is enabling you to project apps from your phone onto the center screen. That seems like the logical move."

The complete video is here, but the App Ecosystem question was right at the end starting at 17m21s:

youtu.be/Z7KRZnsHLM0?t=1041

What are the implications of this? Here are some random thoughts as I digest this news:

1) Tesla had a real opportunity here to provide value above and beyond the Apple and Google infotainment offerings. It doesn't mean Tesla can't ship their own apps and improvements as they have all along (that is still a huge benefit); however, given the size of Tesla's firmware team, the amount of Apps becoming available will be less varied than what could have been with a complete ecosystem of developers.

2) I've tested both Apple CarPlay (www.apple.com/ios/carplay/) and Android Auto (www.android.com/auto/) and they are already pretty good. Is Tesla going to create their own competitor in the App Projection space? That seems wasteful--Apple and Google can bring a lot more resources to that game given they have so many more OEMs onboard. But on the other hand, if Tesla just choses one or both systems, Tesla is somewhat ceding their huge lead in the Infotainment space for a system that will be in a lot of other cars. Conundrum.

3) There will still be opportunities for App devs in the Tesla space (we saw Tesla Google Glass and Apple Watch apps within days of release, Tesla App Projection will be no different). However, I think there will be a lot less opportunity given the limitations of screen projection compared with native apps. My two cents, anyway!

4) On the positive side for Tesla, we'll probably see a lot less "App crashes Tesla console" stories than we would have, even if the native apps ran inside of some type of protected sandbox.

Disclosure: I am/we are long TLSA.