Tesla’s Over-the-Air Fix: Best Example Yet of the Internet of Things?

The National Highway Traffic Safety Administration recently published two recall announcements, one from Tesla Motors and one from GM. Both are related to problems that could cause fires. Tesla’s fix can be conducted as an “over the air” software update and doesn’t require owners to bring their cars to the dealer. For that reason, we have a new precedent for what constitutes an automotive recall.

The sheer voracity with which the Internet of Things has moved into the consumer lexicon is exciting, but at the same time troubling. Why troubling? As we’ve asserted several times before, if the Internet of Things (IoT) takes as its foundation the notion of consumer fun, or curiosity, or idle convenience, the market is bound to disappoint because initial luster inevitably fades on these types of things (esp. if ongoing subscriptions compete for consumers’ share of wallet). Call me a pessimist, but I’d wager that the same folks who’d quickly part with $130 to become the proud owner of a shiny new Fitbit (full disclosure: me included) will nonetheless have relegated that device to the back of a dusty shelf in six months’ time. It’s human nature, even my own. 

In other words, the multitude of “cool” new connected devices made known at CES, combined with Google’s acquisition of Nest Labs, has pushed the Internet of Things into the realm of “fashionable.” In our view, that fact itself ought to give pause to any investor betting on connected devices because there is no bigger antonym for the word “fashionable” than “sustainable.” Sales may be good now, but will they hold over the long-term?

Then a spark comes along to remind us that the IoT is not a fashionable “toy” but, yes, it will be doing some heavy lifting as a long-term game changer for business and society. For us, that was the revelation by Tesla: It can fix its cars “over the air,” while they sit in owners’ garages or driveways or in the parking lot at work, in largely the same manner as Smartphones receive software upgrades. In my view, this detail stands out as a much better proxy for what the IoT is — and could be — than any application devised, say, for the connected home or for personal monitoring.

To recap, Tesla owners recently received a recall notice from the National Highway Traffic Safety Administration alerting them that a charger plug needed to be fixed because it had been discovered to be a cause for fires. “Not to worry,” said Tesla, and completed the fix for its 29,222 vehicle owners via software update. What’s more, this wasn’t the first time Tesla has used such updates to enhance the performance of its cars. Last year it changed the suspension settings to give the car more clearance at high speeds, due to issues that had surfaced in certain collisions. That particular fix did not carry an official recall notice by NHTSA, and went largely unheralded in the news.

Here’s why we’re so bullish about the Tesla example:

• In nearly all instances, the main job of the IoT — the reason it ever came to be — is to facilitate removal of non-value add activity from the course of daily life, whether at work or in private. In the case of Tesla, this role is clear. Rather than having the tiresome task of an unplanned trip to the dealer put upon them, Tesla owners can go about their day while the car “fixes itself.”
• Sustainable value – The real challenge for the “consumer-facing” Internet of Things is that applications will always be fighting for a tightly squeezed share of disposable consumer income. The value proposition must provide tangible worth over time. For Tesla, the prospect of getting one’s vehicle fixed without “taking it to the shop” is instantly meaningful for the would-be buyer – and the differentiator only becomes stronger over time as proud new Tesla owners laugh while their friends must continue heading to the dealer to iron out typical bug fixes for a new car. In other words, there is immediate monetary value and technology expands brand differentiation. As for Tesla dealers, they must be delighted to avoid having to make such needling repairs to irritated customers – they can merely enjoy the positive PR halo effect that a paradigm changing event like this creates for the brand – and therefore their businesses.
• Setting new precedents – Two factors really helped push Tesla’s capability into the news cycle: involvement by NHTSA and the word “recall.” At its issuance, CEO Elon Musk argued that the fix should not technically be a “recall” because the necessary changes did not require customers find time to have the work performed. And, despite Musk’s feather-ruffling remarks over word choice, the stage appears to have been set for bifurcation in the future by the governing bodies. Former NHTSA administrator David Strickland admitted that Musk was “partially right” and that the event could be “precedent-setting” for regulators.

Going back to our earlier point, we have a case where the IoT is doing tangible work to change the way business and society may function in the future.

Another, albeit more passive, way the IoT is bound to enter daily driving life comes in the form of cars being able to preemptively sense when the oil needs to be changed (not by virtue of time passing or miles driven, but by virtue of how well the oil is performing its function within the engine — its actual viscosity and peak temperature); when it is time for the annual tune up; or when the dreaded Check Engine Light comes on, at which point the car automatically reaches your mechanic to get availability, cross references your calendar and sends an appointment for you to confirm with one click on the Smartphone. This will not be a subscription-based function. Rather, it’s just part of owning the car.

But here’s the rub. Loading our cars with all these sensors, processors and, most importantly, a means to communicate is the first step toward the much discussed vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) concepts, both of which are precursors for the “driverless” future. To secure these communications and protect sensitive data from potential breaches, a vpn can play a vital role by ensuring encrypted connections between the car’s systems and external networks.

The ultimate vision for the commuting life, at least for me, is to get in the car in the morning and not have to think about traffic, or weather, or stoplights until I arrive at work. Just leave it to my car “the chauffer.” It’s certainly no coincidence that today’s wealthiest individuals retain car services for that very reason. Driving on heavily congested roads, day after day, can be a real bother and a relatively unsafe one at that. On that score, perhaps the most compelling draw for autonomous cars relates to safely. With human error responsible in part for 90 percent of road crashes (according to NHTSA), it stands to reason that removing humans from the equation could be a lynchpin to reducing traffic accidents. It does seem counterintuitive, but releasing control of the wheel can actually yield more control over your own safety.

What Tesla’s done is show that cars can both accept and convey information to an external “machine.” By extension, the vehicle piece of designing self-driving cars is easy. As humans, we’re really quite adept at walking along pavement and avoiding each other, and our engineers have been able to transfer those “skills” fairly well into our vehicles. It’s the rest of the infrastructure that’s the problem. The real investment challenge comes in outfitting the stuff along the roads — streetlights, intersections and the road lanes themselves — with the means to communicate to passing vehicles. Who’s going to pay for such a build out? Other dimensions of complexity abound, including regulatory, security and privacy matters, all of which will have to be well thought through and addressed by society. Trade-offs and sacrifices will have to be made, to be sure, to realize the technological implementation of this modern vision.

Central to the process will be automakers, regulators, device makers and, frankly, wireless carriers. Ultimately, it will be incumbent on them to bring technologies together for the evolved transportation experience. It may come about in my lifetime, or it may not, but I do consider Tesla’s “self fix” play to be one of the purest examples of the Internet of Things I’ve seen because it so elegantly foreshadows wholesale changes to come.

Alex Brisbourne is President and COO of KORE.