In January 1886, Carl Benz applied for a patent for his “vehicle with gas engine operation”. … Patent specification DRP 37435 is thus regarded as the birth certificate of the automobile. In July 1886, newspapers report on the first public outing of the three-wheeled Benz Patent Motor Car. Since then, cars have changed greatly; a car today is more than just a “vehicle powered by a gas engine.” A modern car has to do much more than just get us from A to B safely. Assistance systems help in all possible situations and reduce the risk of accidents, a comprehensive infotaiment system is mandatory. The feature of pure motorized locomotion is so commonplace for us that today the comfort, the additional equipment become more and more important.

What will be more important in the future: software or hardware?

While the software controls the aforementioned infotaiment and numerous assistants these days, the hardware itself is even more important, or so it is thought. In many cars, the software gets no or very infrequent updates. If you take a look at Tesla, currently the most valuable car manufacturer in the world, things look different again.

Forbes has set up an analysis that concludes that Tesla’s sales of “Autopilot” in 2019 generated about $1.5 billion, or 6.1% of its 2019 revenue. Thus, a significant portion of Tesla’s revenue was enabled by a software-only product. Here, according to Forbes, it is expected that this share will continue to increase in the future. The software is definitely becoming more and more important and the functions it offers will also increasingly influence the choice of brand or model.

Tesla: Auto as a Service

Every Tesla car has a software that gets regular updates and thus new functions. Tesla has managed to increase the effective range through a software update. So a significant improvement only through the software, possible in electric cars. In addition to the free updates, Tesla also offers paid updates, such as the already mentioned Autopilot. So you can upgrade your car through paid software addons. This is a new concept in the automotive industry, but one that is becoming more and more widespread, especially in view of the next big development step in the automotive industry, the Autopilot. An autopilot is significantly more complex than the rest of the software in the car, the costs for it are higher, and the software is permanently developed further. So at some point there could be subscription models for such enhancements. At the moment, the Tesla Autopilot costs around $12,000, more than some compact cars.

The fact is that software in cars has become increasingly important in recent years. We already connect our cell phones to make phone calls or stream music while driving. The future could give us paid upgrade options.