Tesla Is Turning Cars Into Phones. Other Car Makers Better Catch On.

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Courtesy Aptiv

Cars are slowly becoming less about hardware and more about software. That shift has the power to change the automotive industry as much as any other trend, including vehicle electrification and autonomous driving. Automotive investors should start paying more attention to software.

If a “software defined vehicle,” as the industry calls it, is difficult to grasp, all consumers need to do is look at their phones. Then, perhaps, visit their grandparents.

Phones used to be all about hardware. A rotary phone from Ma Bell didn’t have a lot of features constantly updating. Innovations were push-button numbers and extra long cords. But a new iPhone from

Apple

(AAPL) regularly has new apps and operating systems making it go a little bit better day by day.

Cars are still in the rotary phone stage—or perhaps the flip phone stage. But that is changing.

Tesla

(TSLA)

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