Automakers that use over-the-air (OTA) updates to improve their vehicles and solve recalls are expected to save roughly $1.5 billion by 2028, new research from global technology intelligence firm ABI Research showed.
ABI recognized Tesla as the “leader in this space” and noted the company “has never required an in-person software update” to solve a vehicle recall. Tesla has routinely fixed issues with its cars, remedying everything from faulty rear-view cameras to tail light issues, with OTA updates downloadable with an internet connection and applied, in some instances, while drivers are asleep.
The solution helps eliminate the need to visit service centers within Tesla’s network, which has helped those technicians focus on things like collision repair or other maintenance that requires more attention than a software update.
General Motors has also adopted the same strategy to solve issues and recalls. The report indicated GM has “virtually recalled 98% of affected vehicles since 2021.”
GM’s 2016 recall of 3.6 million cars due to a faulty airbag sensor may have catalyzed the company’s focus on resolving vehicle issues through OTA updates. The company spent millions to fix this issue, and a software update could have saved GM time and money.
OTA updates save companies money by reducing the cost of implementing fixes but can also “heavily mitigate the risk of recalls in other ways,” ABI said.
With automakers adopting a software-based mentality with their new vehicles, their lack of experience is evident as faults in performance are frequent.
“Vehicle recalls due to faulty software are becoming more common as software grows in complexity and becomes more deeply integrated into safety-critical functions," said Dylan Khoo, smart mobility and automotive analyst at ABI Research. "In 2022, nearly 10 million cars were recalled in the United States due to software-related issues, with nearly half of these requiring the software to be updated by a car dealer. These recalls will continue to become more prevalent as cars transition toward software-defined vehicles (SDVs), so the capability to remotely repair faulty software without the cost or inconvenience to the customer of in-person updates will be essential for OEMs.”
Khoo also said the companies adopting software-based fixes for recalls will save half a billion dollars in 2023 alone, and revenues from OTA subscriptions will amount to roughly $100 million.
“To remain competitive, OEMs must embrace OTA software updates and be capable of using them throughout the vehicle,” he added.
