Tesla (TSLA) to Update Model S Software, Shares Rise - Analyst Blog

Share price of Tesla Motors, Inc. 's TSLA increased 1.2% to $198.08 on Mar 20 after the electric automaker announced that it is updating the software in its Model S electric vehicle to provide better connectivity and safety features. This software update, which is expected to release within 10 days, will alert the driver about the battery charge and thus reduce the possibility of the vehicle running out of charge. Moreover, Tesla believes that another software update will enable hands-free driving on the highway in the near future.

Tesla's new software update will figure out the best route to a destination for the driver, based on the charging stations along the way. In addition, it will provide information about the nearest charging stations. In case the battery power is low, it will warn the driver before the vehicle travels beyond a charging area.

Also, the software will consider other factors such as elevation, wind speed and air conditioning, among others, that can drain out the battery. This software update will also add other safety features including automatic emergency braking, blind spot detection and a side collision warning system.

Tesla is also focusing on the development of an automatic steering feature, with plans to launch a test drive between San Francisco and Seattle. Tesla intends to add this feature with a new software update within the next three months. This software will provide automatic, hands-free driving on a highway with well-marked lanes.

Tesla's Model S offers travel of 270 miles on a single battery charge. This mileage is almost double the mileage provided by Nissan Motor Co. Ltd.'s NSANY Leaf. According to Tesla CEO Elon Musk, this mileage is sufficient for drivers. However, potential buyers are generally concerned about the mileage.

Tesla will update the software of the Model S free of cost. The software will give preference to the Supercharger Stations which can fully charge the vehicle in 30 minutes. In addition, the company will figure out other charging stations along the route. At present, 90% of U.S. inhabitants are within 175 miles of a Supercharger. Tesla is working on providing similar facilities in Europe, Canada and parts of China.

Tesla currently carries a Zacks Rank #3 (Hold).

Better-ranked auto stocks include Allison Transmission Holdings, Inc. ALSN and General Motors Co. GM . While Allison Transmission sports a Zacks Rank #1 (Strong Buy), General Motors carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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