Although much of the conversation about Tesla Motors Inc (NASDAQ:TSLA) has been about what the company will do for itself, Barclays analysts say some supporting automotive companies stand to gain as well. They believe Tesla will create new dependence on the technologies these companies offer as it pushes adoption of electric vehicles.
Technology Tesla may rely more on
Analyst Brian Johnson and his team say Tesla Motors Inc (NASDAQ:TSLA) is creating reliance on five different technologies. They list reconfigurable clusters, large center infotainment touchscreens, embedded telematics, assisted driver / autopilot and cloud-based software. Tesla is already using some of these technologies by connecting the Model S to the Internet, and they expect the automaker to increase usage of them in the near future.
How Tesla uses the technology
In the Model S, we can already see use of the large center infotainment touchscreen. Barclays analysts believe Tesla Motors Inc (NASDAQ:TSLA) has raised the bar in this area and believe that these touchscreens will spread to the broader car market. In addition, they note that the Model S has a “fully reconfigurable instrument cluster,” or dashboard, which again makes it different than traditional cars.
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Tesla Motors Inc (NASDAQ:TSLA) also has an embedded connection link rather than connectivity via tethering with a smartphone, which is currently what most connected cars rely on. In the long term, they expect embedded connectivity to become more of a standard. Tesla also uses cloud-based software currently for updates to the Model S, but the Barclays team expects this usage to expand further to “harvest critical ‘Big Data’ on vehicle performance.”
Future possibility for Tesla
Of course the self-driving car isn’t a reality yet, but Tesla Motors Inc (NASDAQ:TSLA) management has expressed interest in putting this capability in future vehicles. The automaker is lagging behind German manufacturers in adoption of this technology, but Johnson and his team believe it will “catch up rapidly in the next year or so.” In fact, they expect to see “some form of autopilot for limited situations” at some point within the next three to five years.
Big gainers from Tesla
The team at Barclays sees Delphi Automotive PLC (NYSE:DLPH), Harmon International Industries Inc./DE/ (NYSE:HAR) and Visteon Corp (NYSE:VC) as standing to gain the most from Tesla Motors Inc (NASDAQ:TSLA). They say Harmon as the “Connected Car pureplay” because most of its revenue is driven by technologies related to the connected car. The company is one of the leaders in embedded telematics and cloud-based solutions.
Visteon Corp (NYSE:VC) focuses on reconfigurable instrument clusters and, in fact, has become one of the leaders in cockpit electronics. And Delphi Automotive PLC (NYSE:DLPH) also has exposure to each of the five technologies Tesla Motors Inc (NASDAQ:TSLA) appears to be building upon. Specifically, the analysts note strength in infotainment and self-driving car safety.