Where Is the Automotive Industry with Over the Air Updates, and Where Is It Going

By Abu Miah | 4Q 2024 | IN-7516

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In January 2024, Tesla conducted a virtual recall through Over-the-Air (OTA) updates for 1.68 million of its vehicles in China, marking a continuation of its 7-year record of addressing every software-related recall through OTA updates. Tesla remains a clear leader in this domain-a key differentiator in an ecosystem where software-related faults are rapidly becoming more commonplace. Tesla shines in another crucial aspect of OTA updates: feature upgrades and delivery. Tesla delivered an optional, paid "Energy Boost" update to Model Y Rear-Wheel Drive (RWD) owners in the United States that increased driving range. For 30 additional miles of range, owners could pay US$1,000, and for 50 miles, they could pay US$1,600. This update was well received by Tesla owners-a sign that paid OTA updates have strong potential to act as a new revenue stream for automotive Original Equipment Manufacturers (OEMs).

Several other OEMs offer OTA updates for bug fixes, virtual recalls, and feature upgrades. Rivian offers OTA updates for all its vehicles, including an update that added Apple Music to the R1T and R1S models; BMW delivers OTA updates to an installed base of over 7.5 million vehicles, sending an average of 3 remote updates per year; and Smart has delivered several improvements to its #1 and #3 models through an OTA update. The Smart update added new functions, such as new sound experiences and a Smart Companion, as well as improvements for existing features, such as optimized energy recovery management. However, not all OEMs are adept with their OTA services. To survive in an evolving software-defined automotive landscape, progress in this domain is critical.

There are several practices that OEMs have used to improve their OTA features, or are planning to integrate. The first is the combination of paid and free updates that significantly enhance existing features or deliver entirely new features to drivers. OEMs that offer free updates to improve or add functions, such as Mercedes-Benz's automatic lane change OTA update that is being offered from September 2024 for 200,000 vehicles already delivered in Europe, introduce their drivers to the potential of transformative OTA updates at a lower barrier to entry, making paid OTA updates in the future more palatable if they can present material improvements to the driving experience. The conversion of non-paying consumers into paying ones is something the automotive industry is familiar with; connectivity services have long suffered from significant user churn after free trials, and comprehensive OTA update delivery is one way that OEMs can reduce this churn.

Another way that OEMs are innovating in their OTA update mechanisms can be seen in Tesla's options for software updates: Standard versus Advanced. Drivers can use the Software tab of the vehicle settings to set their own preferences for software updates, and the Standard setting allows the vehicle to regularly receive OTA updates that add new features and enhance existing functionality. The Advanced setting allows their vehicles to receive new updates as soon as they are available for that configuration. Elon Musk confirmed, in July 2024, that this setting is used to determine when to send select OTA updates, with Advanced users receiving the Tesla Full Self Driving (FSD) v12.5 update earlier than other drivers. Giving drivers more options for OTA update delivery, in a similar manner to the smartphone industry's optional Operating System (OS) updates, is a smart approach to encouraging proactive driver actions when it comes to using OTA updates. More clarity around the content and timing of updates can further improve this approach, allowing drivers to make informed decisions about what will change about their vehicles and when it will occur. This translates into a higher level of security for drivers when they consider paying for optional OTA updates, such as the aforementioned Tesla Energy Boost update.

A hallmark of the consumer electronics industry is straightforward, quick, and even automated updates. Increasing the convenience and speed of automotive OTA updates to match this standard without compromising safety is an important barrier that OEMs must overcome. For OTA updates to fully permeate the automotive industry, and generate a reliable revenue stream for OEMs, they and their partners should consider several adaptations and enabling technologies. First, if an OTA update mechanism is accompanied by a connected smartphone application, such as the My BMW App or the MINI App, the app must have convenient features that streamline the consumer experience, rather than being an obstacle. These features include:

• Allowing remote updates to the vehicle that can be initiated on the paired mobile device, so that updates can be completed without the driver ever needing to enter the vehicle.
• Allowing paid updates to be purchased and installed quickly and simply, in a similar manner to in-app purchases for typical smartphone applications.

Additionally, several OEM partners have noted the importance of software containers in vehicle compute architectures, due in large part to their utility for OTA updates. Containers, which are discussed in ABI Research's Accommodating Mixed-Criticality Compute in Digital Cockpit Domain Controllers report (AN-5541) can be used to deliver targeted OTA updates to vehicles in a manner that reduces the retesting and validation required, leading to a decrease in update file sizes and update lengths. This also leads to time efficiencies for software engineers in the OEM teams that are delivering the updates, as they don't need to completely align with other teams in domains that operate in the same compute environment. Containers also have potential to allow updating of functions while on the move, without compromising other domains. As OTA updates become more frequent, software containers will become an essential part of vehicle architectures.

As OTA updates become more mature in the automotive industry, standardization of these software containers is also important. Open Container Initiative (OCI)-compliant containers are an important feature for OEM compute systems that many software vendors and Tier One suppliers are considering or already offering.