Tesla (NASDAQ:TSLA) will likely make a smartphone, Morgan Stanley analysts believe.
“The car is an extension of the phone. The phone is an extension of the car,” the Wall Street giant said in a note, citing its discussions with automotive executives and industry experts
“The lines between car and phone are truly blurring,” it added.
Morgan Stanley analysts have long discussed Tesla's potential to expand into edge computing domains beyond vehicles. In October, they highlighted the concept of a mobile AI assistant as a significant innovation. Following Apple (NASDAQ:AAPL)'s WWDC, Tesla CEO Elon Musk rekindled this idea, saying that developing such a device is "not out of the question."
“As Mr. Musk continues to invest further into his own LLM/genAI efforts, such as ‘Grok’, the potential strategic and user experience overlap becomes more obvious,” analysts wrote.
From an automotive perspective, supercomputing at both the data center and edge levels is increasingly relevant. The latest Tesla vehicles, which can perform over-the-air firmware updates, contain batteries with the energy equivalent of approximately 2,000 iPhones and come standard with liquid-cooled inference supercomputers.
“What if your phone could tap into your vehicle’s compute power and battery supply to run AI applications?” Morgan Stanley’s team asked.
Edge computing and AI have underscored challenges like battery life, thermal management, and latency in integrating powerful AI-driven applications with today's smartphones.
“Any Tesla owner will tell you how they use their smartphone as their primary key to unlock their car as well as running other remote applications while they interact with their vehicles,” analysts noted.
“The ‘action button’ on the iPhone 15 potentially takes this to a different level of convenience,” they added.