# Tesla's Competitive Advantage is Software



## John (Apr 16, 2016)

I wrote this Quora answer recently discussing my thoughts on why Tesla will kick butt versus other manufacturers. If you're into strategy and tech trends like I am, it's a short read.

Check it out:

What Is Tesla's Competitive Advantage?


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## Nikola (Apr 4, 2016)

Well done, John.

On another thread I pointed out that _optional_ software (EAP, FSD) can be from 14-22% of the purchase price of a new Tesla Model 3. That's another huge advantage for Tesla, since that revenue has no hardware cost, and cars can be upgraded/downgraded at will. What other manufacturer can claim that?

BTW, can you cite a source for this?
*"Did you know that software engineers outnumber every other type of engineer at Tesla? Did you know that Tesla is the only automotive manufacturer like that?"*


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## John (Apr 16, 2016)

Nikola said:


> Well done, John.
> 
> On another thread I pointed out that _optional_ software (EAP, FSD) can be from 14-22% of the purchase price of a new Tesla Model 3. That's another huge advantage for Tesla, since that revenue has no hardware cost, and cars can be upgraded/downgraded at will. What other manufacturer can claim that?
> 
> ...


I've heard it stated several times, so I don't have source to point at, though I'll search again when I get a chance.
While it's not conclusive, I think it's indicative that these are the current job openings for engineers at Tesla:

Software + Firmware: 83
Mechanical: 18
Industrial: 15
Electrical: 9
Process: 9
Civil: 2
Chemical: 1


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## Samsaggace (Jul 27, 2018)

You are right ! Automotive Industry was so late on that aspect.
If you consider aeronautical industry, software represents more than 30% of an aircraft price.
I worked also in Radars and Telecoms: every piece of electronics are now digitally managed.
I think that this delay in software introduction in automobiles is due to the fact that they are too simple pieces of engineering. In other industries you cannot even think about developing new products without software.
As an Aeronautical Engineer, when I start working in the 70’s as software engineer, all my colleagues were laughing at me “playing with lines of code”. In the new millennium, you cannot manage any large project without understanding software involvement.
What is new in Tesla approach it’s not only the software “everywhere” - they only follow the other industrial developments (like aircrafts, rockets, telecoms ...) - it’s the way they value software in the selling price.
That’s very new and perhaps a bit risky. People should not pay in the future for something reputed as “costless”. Take a look at what happened to Microsoft ! Windows 10 is more or less free now and you pay few cents for your apps on IPhone.
Elon has certainly new thoughts for that ...


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