Tesla Courts Electric Car Buyers With Software Upgrade

Tesla (NASDAQ:TSLA) is giving consumers more reasons to purchase one of its electric cars: the ability to summon the vehicle and to partake in some in-vehicle karaoke.

In what the Palo Alto, Calif.-based company said is its "biggest software update ever," Tesla announced in late September the rollout of Version 10.0 or V10 of its software. It was issued as an over-the-air update, which means no intervention by car owners is required.

With the update, Tesla vehicle owners who have purchased the full self-driving capability (not yet released) or enhanced autopilot can summon their vehicle from a parking lot without a driver behind the wheel. The car has to remain in the owner's line of sight, and owners are responsible for monitoring it at all times.

Tesla is also enabling customers to stream Netflix, Alphabet'sYouTube, and Walt Disney's Hulu while the vehicle is in park and use its new "Car-aoke" feature, which comes with what Tesla said is a "massive" library of music and song lyrics, with support for multiple languages.

"We're raising the bar for what people have come to expect from their cars with new entertainment, gaming, music, and convenience features designed to make your car much more capable, as well as making time spent in your car more fun," Tesla wrote in a blog post when announcing the upgrade. "Version 10.0 is our largest update ever."

Tesla hopes V10 drives sales growth

The software update coincided with a quarter-end push by Tesla to sell more vehicles. And how better than with new technology that lets you summon your vehicle in the rain or when you're loaded down with packages?

As the quarter closed out last week, consumers were urged to purchase a Tesla in promotional emails that threw in perks like unlimited free supercharging for two years, according to media reports. The promos also touted the V10 software update.

That wasn't enough, however, for Tesla to meet Wall Street's expectations for 99,000 deliveries in Q3. On Wednesday, the company announced it delivered 97,000 vehicles during the September-ending quarter. Specifically, Tesla said it delivered 79,600 Model 3 cars and 17,400 Model S and X cars. It bested its second-quarter sales, which hit a record 95,365.

Full-year sales outlook sets the stock's trajectory

Even more important in the minds of investors is what Tesla had to say about sales heading into the important fourth quarter. Tesla said the backlog is strong as the last three-month period of the year kicks off and that it's focused on boosting production to meet that demand.

"As was also the case in Q2, nearly all of our Model 3 orders were received from customers who did not previously hold a reservation, solidifying the transition to generating strong organic demand. We are continuing to focus on increasing production to meet that demand," Tesla wrote in the press release highlighting third-quarter sales results.

It is that organic demand that Tesla is hoping to boost with its new software update. After all, by the time we are in the throes of the fourth quarter, reviewers will have had time to pore over the features and scores of Tesla owners would have already tried to summon their car. If the reviews are good and customers are happy, V10 could boost interest in the electric vehicle maker. But reports of driverless cars hitting other vehicles (or worse, people) or entertainment features from the software update failing to deliver could tarnish Tesla's reputation. That's wouldn't be good for investors or for the electric-car maker, which is already under pressure.

This article originally appeared in the Motley Fool.

Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Netflix, Tesla, and Walt Disney. The Motley Fool has the following options: long January 2021 $60 calls on Walt Disney and short October 2019 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.