Tesla Motors Inc. (TSLA:US), the electric-car maker led by billionaire Elon Musk, picked AT&T (T:US) Inc. to provide high-speed wireless service to its vehicles, giving the carrier a boost in its effort to expand beyond mobile phones.
All Tesla cars come equipped with AT&T network chips, which allow two-way connections for services such as roadside assistance and stolen-vehicle location, the Dallas-based carrier said today. The Tesla service also includes Internet access, navigation and entertainment on a 17-inch (43-centimeter) touch screen. Terms of the agreement weren’t disclosed.
Tesla, which sells its cars directly to consumers at prices starting at about $70,000, is AT&T’s latest connected-car partner. In February, AT&T replaced Verizon Wireless as OnStar service provider to General Motors Co. (GM:US) cars beginning with 2015 models. Carmakers and mobile carriers are seeking to extract more revenue from users while they’re on the road.
“Tesla is the most appealing car to technophiles,” said Roger Entner, a wireless-industry strategist with Recon Analytics LLC in Dedham, Massachusetts. “Connecting cars makes a tremendous amount of sense.”
AT&T rose less than 1 percent to $34.44 at the close in New York. Tesla fell 0.4 percent to $182.80.
Chris Penrose, an AT&T executive in charge of emerging devices, plans to announce the partnership at an event in San Francisco today. AT&T’s service also could be used to provide in-car Wi-Fi hot spots, letting anyone in the vehicle connect to the Internet via mobile devices.
“We’ve been working with AT&T. They’ve been the service provider for Model S” in North America, said Elizabeth Jarvis-Shean, a spokeswoman for Palo Alto, California-based Tesla. She declined to comment on cellular or data service changes provided by AT&T.
“Cars are becoming multimedia entertainment systems and there’s a lot of money in that,” Entner said.
Unlike conventional cars, Tesla’s Model S receives wireless programming updates via an installed cellular system to improve vehicle operations. Such updates typically occur when the car is recharging overnight.
Navigation, mapping and data functions in the Model S also rely on the cellular system. Some owners have said the speed of refreshing Google Maps displayed in the car needs an upgrade.
Model S owners such as Douglas Carlisle of Menlo Park, California, cite cellular speed as one of the few areas in which the car needs improvement. Tesla doesn’t currently charge data fees for the installed cellular system.
“At times the map refresh isn’t as smooth as it could be, so that could get better,” Carlisle said in a July interview.
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