Tesla Agile Development: Product Management at its Best

Tesla Agile Development

Tesla Agile Development: Version 8.0 Software and Product Management at its best.

Last week I received the version 8 update from Tesla.

For those of you unfamiliar with how updates work with Tesla and the Model S or X, your car connects to your home wifi and then every month or so you get great new features downloaded.

In my case, since I purchased my model S one year ago I have received autopilot (the car accelerates, brakes and steers on its own based on the road and vehicles around it), summon (automatically opens my garage door and backs the car out for me) and constant updates that have improved small comfort features and fine-tuned autopilot based on the data sent back from the entire Tesla fleet.

The result? Every few months I get a better car and my satisfaction and level of delight with the brand goes up.

Some time in the very near future all cars will be like this. Once you have experienced it you’ll never want to go back.

With Tesla’s version 8 software they delivered over 200 new features, including these highlights:

  • Temperature monitoring when the car is parked for a long period of time. If the car starts to get too hot the air conditioning automatically goes on, ensuring that the car is the right temperature when you return (and that pets or children left in the car are safe!)
  • New media player, including very fast loading of album/cd covers and a much more user-friendly audio system overall
  • Autopilot improvements, including better feedback for reminding you to keep your hands on the wheel (it isn’t completely self driving yet!)
  • Auto hiding of the control icons at the top of the screen so that you have a larger map all of the time on the screen

So how is Tesla able to deliver great new functionality so rapidly?

Most likely the way that Tesla is doing this is by using a software development methodology called Agile (there are many kinds of Agile such as Scrum, Extreme Programming and Lean.)

The way that Agile works is that rather than planning huge new releases with a lot of features that come out every few years, instead the software developers work on small batches of development called sprints (usually a 2-4 weeks in length).

Agile uses very sparse documentation (user needs are expressed in terms of “user stories”, oftentimes hand-written on an index card), and the software developers and product managers talk through what the user really is trying to accomplish rather than taking a lot of time trying to write everything down.

Development then goes off and builds working software rapidly which is tested in parallel, and the result is that features get completed and provided to customers much faster.

Each sprint can be released on its own (Tesla does this with security and very small feature releases), or they can be released every few months as a major release such as the new version 8.0 software.

Tesla uses this as an advantage to push innovation.

While their competitors are busy pre-announcing cars that won’t arrive for years, Tesla is delivering the new features now.

For example, Porsche announced their Model E all electric concept car last year, which they bragged at the time will go zero to sixty in 2.5 seconds and have a range of over 300 miles. Porsche will deliver this car sometime in the next few years (estimated to be 2020, but no firm date).

In the meantime, Tesla released the Model S p100D, which was just released, can already go zero to sixty in the same 2.5 seconds and has a range over 300 miles. And Tesla’s car is a sedan compared to Porsche’s concept sports car which won’t be here for years.

NOTE: Porsche’s approach on this is a new case study we have added to our Optimal Product Management and Product Marketing course about the pitfalls of pre-announcing!

Tesla uses Agile development and delivery as a huge advantage over almost all other car companies

Few car companies deliver software updates for their vehicles, and if they do it tends to be once every year or two. These updates have to be installed at the dealer and often only fix bugs rather than provide new features that increase customer satisfaction.

Car companies are going to have to figure out how to attempt to compete with this, and most likely they’ll adopt Agile and the same methods that Tesla is using. However, their company DNA is used to updates only every few years, and their current manufacturing and development is burdened by doing things “the way they always have.”

The result is that until they figure out how to do this Tesla is going to eat their lunch.

One thing is for sure, with Tesla Agile development redefining how car companies have to compete we’ll all benefit from better and safer cars sooner rather than later.


Learn More

If you would like to learn more about Agile development methodologies, take our new training course: Agile for Product Managers and Product Owners, available in-person or as an online course.

Download the first two chapters of Agile Excellence for Product Manager here:

10 Replies to “Tesla Agile Development: Product Management at its Best”

  • “Most likely the way that Tesla is doing this is by using a software development methodology called Agile…”

    Meaning, you don’t know if they are actually using Agile.

    From personal experience in the company I work for that deals with embedded software in Hardware products, Agile is a slow and bloated way of development with poor tracking. It is way faster to simply write out a simple PRD that defines the basic requirements and get to work rather than the overly wordy and useless Story method. As a tester I want clear definitions and requirements, not a bunch of blabber about that requirement. A blue colored button 2cm x 1cm rectangle in shape vs. “as a user of buttons I need a button so that when I press it…etc.”
    Also a PRD allows one to always have a holistic view of the “overall product” at a glance. Everything is in one neat tidy spot, not distributed over endless sprints and lost to view as development proceeds.

    • I second that, based on my experience too. We have become more bureaucratic since the implementation of Agile.
      Realize that if a company or project succeeds, the propaganda says it is thanks to Agile. If a company or project fails, is because they didn’t follow Agile to the 100%. So Agile itself is never to be blamed.
      The Agile manifesto says “Working software over comprehensive documentation”, yet, their Process adds so many meetings, overly worded stories, unneeded process-initiated interactions, etc, instead focusing on getting things done and using common-sense.
      Instead of using common-sense, people focus on following the process even in the many scenarios when it doesn’t make sense, and if you try to bring up some common-sense, you end up in a long discussion with the scrum master about the process.
      Not to mention that Agile require more employees, as enforcing it requires a lot of efforts, and takes from development time.
      I do believe there are a lot of good things in Agile process, but Companies need to recognize the bloatware in it and streamline to a process that relies on getting things done. A process that relies on developer ownership and protectiveness. To use team collaboration when makes sense instead of forcing team ownership in the many scenarios when it doesn’t make sense.
      Oh, well, I keep wishing.

  • The software updates are in Agile methodology. Understood. However how is the hardware, the car itself, being delivered in Agile methodology. I don’t think that is the case. So the example of Tesla going 0 to 60 in 2.5 secs is incorrect in the context of the topic (Agile development) being discussed here.

    • True that the hardware isn’t being done in an agile way. However, since the article was posted they did release a software upgrade so that now the P100D can go 0 to 60 in 2.28 seconds purely by upgrading the software.

  • Valid point Phil… And I am really curious to see how future innovations in business models will progress for Tesla. Will they actually change the auto buying industry further in even more innovative ways.

      • You are spot on Dave. The dealers are doing everything they can do to try to stop direct sales to customers because they are scared and know that often dealers don’t add value to the sale. And because electric cars require so much less maintenance (no oil changes and on average 600 less moving parts that can fail) the car dealer business is going to go through a rough time.

  • My guess: Getting the traditional auto manufacturers to accept Agile releases will require a significant change in the corporate cultures, which are very entrenched.

  • It will be interesting to see how durable a differentiator frequent updates will be for Tesla. Somehow, I expect they will benefit from it for many years to come.

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