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Tesla on track to follow Apple’s footsteps as a software-based service provider

(Photo: Andres GE)

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As the Full Self-Driving beta continues to roll out to more Tesla owners, the EV automaker’s value as a tech stock seems to becoming more evident to some people in Wall Street. In a research note published last week, Morgan Stanley’s Adam Jonas stated that Tesla seemed to be following Apple’s playbook and becoming a software-based service provider in the future. 

Jonas explained that Apple CEO Tim Cook made his mark in the company by growing the tech giant’s revenues through software-based services. The Morgan Stanley analyst believes Tesla will follow a similar path in the future. 

“Tesla is on the verge of a profound model shift from selling cars (volume x price) to generating high-margin, recurring software and services revenue,” he wrote in his November 18 note. 

Jonas expanded on his theory, adding: “Services transformed the narrative on Apple from a stock that used to be perceived as a cyclical hardware stock fully valued at 15x earnings to one where target multiples increasingly approach 30x+ today.

“It is becoming clearer that, like many other technology firms, Tesla is using its growing fleet of hardware in services to ‘turn on’ new revenue opportunities…services that are far-reaching, high-margin, regularly recurring, and services that ultimately improve the user experience and stickiness of the platform,” the Morgan Stanley research note said.

Long-time Tesla bulls will not be surprised by Jonas’ new perspective of Tesla functioning like a tech giant. TSLA bulls have argued for a long time that the company should not be perceived as an automaker alone, especially considering its Tesla Energy division or the fact that the company makes its own chips and develops software, like Full Self-Driving (FSD). 

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For example, Business Insider calculated that FSD’s $10,000 price tag was about 20% of the Model 3 Long Range’s cost. Morgan Stanley estimated Tesla could earn close to 100% profit margin if customers added FSD to their Model 3 LR purchase.

When considered a tech company, TSLA’s upcoming inclusion into the S&P 500 index and its $544 billion market cap makes more sense. It also explains why Tesla owners are very loyal to the company. Offering an array of services can attract new users to Tesla, like it does for Apple. It could also generate strong loyalty to a brand, which explains why Apple users find it difficult to leave the company’s ecosystem.

Maria--aka "M"-- is an experienced writer and book editor. She's written about several topics including health, tech, and politics. As a book editor, she's worked with authors who write Sci-Fi, Romance, and Dark Fantasy. M loves hearing from TESLARATI readers. If you have any tips or article ideas, contact her at maria@teslarati.com or via X, @Writer_01001101.

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Neuralink Head of Surgery teases exciting Tesla Optimus update

If successful, the test could result in Neuralink patients accomplishing impressive feats using Optimus.

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Credit: Tesla

Neuralink’s Head of Surgery has teased what could very well be the an incredibly ambitious and insane collaboration with Tesla Optimus, Elon Musk’s humanoid robot that is expected to start initial trial production sometime next year. 

If successful, the test could result in Neuralink patients accomplishing impressive feats using Optimus.

Neuralink’s current trials

Neuralink recently shared a video of Alex, the second human recipient of its Telepathy device. Alex is part of Neuralink’s PRIME study, and he was selected to be the first patient to control a robotic arm using only his mind. As could be seen in the video, Alex is now capable of operating household appliances using a robotic arm that he controls with his mind. 

In response to the video, which was posted by Neuralink co-founder and President DJ Seo, the startup’s Head of Surgery Mechanical Engineering, Danish Hussain, joked that the company is really just helping out people. This was despite critics arguing that Neuralink is some giant evil corporation. “We’re literally just out here helping the homies eat pretzels lol,” the Head of Surgery ME wrote. 

Next steps with Optimus

The Neuralink Head of Surgery ME’s comments caught quite a bit of attention on X, with some, such as Elon Musk, highlighting that Neuralink is actually a pretty small company. Other commenters also asked whether Neuralink would eventually train its patients with Tesla Optimus V2, a humanoid robot. Hussain shared an exciting response: “We’re starting simple, but this will happen very soon!” he wrote in a post on X.

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Having the capability to control an Optimus robot using only the mind would most definitely be a life-changing ability for Neuralink’s patients. Of course, Tesla might wait until Optimus V3 gets rolled out before such a trial might happen, as that is the variant of the humanoid robot that seems to be heading for mass production. Either way, it seems like an age where Optimus robots can be controlled by thoughts using a Neuralink implant may be coming sooner than expected.

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Tesla Supercharger Network is so reliable, it’s pushing Model Y sales

Tesla’s Supercharger network is proving to be a key factor in the company’s dominance in several key markets.

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Credit: Tesla

Tesla’s Supercharger network is proving to be a key factor in the company’s dominance in several key markets. These include Norway, which has become a place of strength for the new Model Y. 

This was hinted at by Tesla’s Director of Charging, Max de Zegher, on social media platform X.

Supercharger network sets the industry standard

As noted by the Tesla executive, the Model Y accounted for 29% of all vehicle sales in Norway in September. Part of the vehicle’s success was likely due to the reliability of the Supercharger Network, which is class leading even in Norway, where 98% of new cars sold are electric.

De Zegher emphasized on X that Tesla Superchargers are still in a class of their own. An EPSI survey of nearly 1,500 Norwegian EV drivers supported his claim, as Tesla Superchargers retained first place in customer satisfaction for the fifth consecutive year. 

The EPSI Survey‘s results

Respondents to the EPSI survey praised the Supercharger network’s strong uptime, abundant capacity, and user-friendly digital solutions, placing it ahead of other operators such as Uno-X. Survey researchers highlighted that Tesla has set the standard when it comes to simplicity in the charging process.

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Drivers also cited competitive pricing and seamless plug-and-charge functionality as major reasons they prefer Tesla’s network, especially in Norway’s extreme winter conditions where reliability is critical.

“Tesla has set the standard for simplicity in the charging process. Combined with competitive prices, this means that many electric car drivers say they are likely to choose Tesla again the next time they need to charge,” EPSI noted in a post.

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Tesla top exec Tom Zhu highlights Elon Musk’s “prime directive” for FSD

Zhu’s comments emphasize Tesla’s uncompromising focus on safety, which has made the company’s vehicles among the safest on the road.

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Credit: Tesla AI/X

Tesla Senior Vice President for Automotive Tom Zhu, a key executive behind the company’s success in China and Giga Texas, recently highlighted the “prime directive” of Full Self-Driving (FSD).

Zhu’s comments emphasize Tesla’s uncompromising focus on safety, which has made the company’s vehicles among the safest on the road.

Echoing Musk’s vision for safe autonomous driving

Zhu’s post quoted Musk’s statement from 2021, where the CEO reportedly stated that FSD must avoid accidents even if the most ridiculous events happened in the middle of the road. Zhu stated that beyond everything, Tesla’s systems like Autopilot and FSD are designed to keep passengers safe.

“Elon said it in 2021: “For self-driving, even if the road is painted completely wrong and a UFO lands in the middle of the road, the car still cannot crash and still needs to do the right thing. The prime directive for the autopilot system is: Don’t crash. That really overrides everything. No matter what the lines say or how the road is done, the thing that needs to happen is minimizing the probability of impact while getting you to your destination conveniently and comfortably,” Zhu stated.

“The prime directive, the absolute priority, is to minimize the probability of injury to yourself or to anyone on the road, to pedestrians, or anything like that. It can’t be dependent on the road markings being correct.”

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Tesla leadership rallies behind global FSD rollout

Tom Zhu, who previously led Tesla China through its record-breaking growth phase, now oversees automotive operations worldwide. He has reportedly become a problem solver for Elon Musk over the years, with previous reports stating that he was brought in to help Giga Texas optimize its vehicle production ramp.

Zhu’s comments may sound ambitious, but FSD has proven that it values safety above all else over the years. This was highlighted recently in an incident in Australia, when a Model Y was hit by what could very well be a meteor. Despite the impact and part of its windshield melting, the vehicle was able to drive safely and keep its passengers safe.

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