Tesla Creates Official API

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What API is?

Application Programming Interface (APIs) is the acronym for application programming interface — a software intermediary that allows two applications to talk to each other. APIs are an accessible way to extract and share data within and across organizations (1).

Nowadays people are surrounded by companies that use APIs, because most software-as-a-service (SaaS) providers offer APIs that allow developers to build code that posts data to and receives data from the provider’s site. Some of the most popular APIs are Google Maps API and Twitter API among others.

Tesla

Tesla is a well-known famous company founded in 2003 by Elon Musk. Its mission is to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible (2). They design sustainable systems that are massively scalable—resulting in the greatest environmental benefit possible (3).

Every tech geek is not only interested in Tesla product updates but also news about the company. Elon Musk is quite famous for making shows while launching new products/features or implementing innovative solutions like payments in Bitcoin.

Tesla API

This week Tesla launched their own documentation called Tesla API and officially ended years of unofficial API use. It will allow developers to connect with Tesla’s ecosystem in order to build third-party apps.

New documentation support models:

Tesla S
Tesla Model 3
Tesla Model X
Tesla Model Y (4)

How does it affect their business model?

From a business perspective building API is somehow a new way to generate revenue. A lot of companies charge fees for each connection with their API. However, so far Tesla allows to use their API for free (5). I believe that in the future they will monetize this service and will have a new revenue stream.

Deja vu?

Kevin Armstrong in “Tesla Creates Official APIs for Third-Party Services; To Start Charging for Usage” reflects that this move mirrors another of Elon Musk’s ventures: X. After acquiring Twitter, before renaming it X, Musk revamped the API access to boost revenue for a social media platform that was headed for bankruptcy. (6)

Kevin also points out that although Tesla’s API change is still in its early stages, it indicates a wider trend among Musk-led businesses. The decisions made by both Tesla and X highlight the tension in business between maximizing profits and fostering a community (6).

I believe that it’s an even more strategic decision than it seems to be, because Elon not only wants to build a strong Tesla community but also – in my opinion – to build a Tesla Store (like an App Store), within the Tesla ecosystem.