# How different is Tesla's business model?

By [Brandon Donnelly](https://paragraph.com/@brandondonnelly), 2020-09-01

business-model, electric-vehicles, elon-musk, mobility, tech, tesla, transportation, urbanism

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I have a friend who is a big fan of Tesla. And judging by what's going on with the company's stock these days, he is not alone. This morning he sent me [this article](https://cleantechnica.com/2020/08/29/tesla-introduced-a-business-model-the-world-has-not-seen-before/) talking about how Tesla has introduced an entirely new business model for the automotive industry. The two key takeaways are as follows. One, Tesla is in many ways a software company. The hardware and software onboard each vehicle are continually getting better and oftentimes these improvements are delivered to their customers for free via over-the-air updates. This is not how the incumbent car companies work. And two, fully electric vehicles are going to crush after-sales revenue by virtue of the fact that electric vehicles simply don't require the same amount of service. So now you're in a position where the cars last longer (and apparently depreciate a lot less). This might seem bad for business, but if you can build an ecosystem of energy products and services around said car, then maybe you've got a big ass Tesla moat. Maybe. I have no idea what the company should be valued at today, but all of this is interesting to me and I'm fairly certain that the car I have right now will be the last combustion engine vehicle I ever own. Depending on when autonomy arrives, it may also be the last car I ever own.

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*Originally published on [Brandon Donnelly](https://paragraph.com/@brandondonnelly/how-different-is-teslas-business-model)*