Tesla Motors Inc., the electric-car maker led by billionaire Elon Musk, has picked AT&T Inc. to provide high-speed wireless service to its vehicles, giving the carrier a boost in its effort to expand beyond mobile phones.
All Tesla cars come equipped with AT&T network chips, which allow two-way connections for services such as roadside assistance and stolen-vehicle location, the Dallas-based carrier said today. The Tesla service also includes Internet access, navigation and entertainment on a 17-inch (43-centimeter) touch screen. Terms of the agreement weren’t disclosed.
Tesla, which sells its cars directly to consumers at prices starting at about $70,000, is the latest connected-car partner for AT&T. In February, the carrier replaced Verizon Wireless as the OnStar service provider to General Motors Co. cars starting in the 2015 model year. The push is part of a broader effort by carmakers and mobile carriers to extract more revenue from users while they’re on the road.
“Tesla is the most appealing car to technophiles,” said Roger Entner, a wireless-industry strategist with Recon Analytics LLC in Dedham, Mass. “Connecting cars makes a tremendous amount of sense.”
AT&T shares rose less than 1 percent to $34.34 at 3:04 p.m. in New York. Tesla fell 0.9 percent to $181.97.
Chris Penrose, an AT&T executive in charge of emerging devices, plans to announce the partnership at an event in San Francisco today. AT&T’s service also could be used to provide in-car Wi-Fi hot spots, letting anyone in the vehicle connect to the Internet via mobile devices. Elizabeth Jarvis-Shean, a spokeswoman for Palo Alto, Calif.-based Tesla, didn’t immediately return calls seeking comment.
“Cars are becoming multimedia entertainment systems and there’s a lot of money in that,” Entner said.