The transition to software-defined vehicles (SDVs), while revolutionising the car industry, is not without its teething problems. Car makers today are contending with the integration of complex software, from multiple suppliers, across many vehicle functions. Cars are becoming smarter, but equally more complex and vulnerable to software defects.
The prevalence of software in the vehicle means that even a tiny glitch can turn into a major safety risk. In the U.S. last year, over 13 million vehicles were recalled due to software related issues, up 35% from 2023. Add to this, the fact that performing these legally required software updates in-person costs OEMs half a billion annually and it’s vital that OEMs not only harness the power of over-the-air (OTA) updates but also real-time diagnostics.
Robust over-the-air (OTA) update capabilities are crucial to managing software issues and recall costs. They allow car makers to fix and update vehicle software remotely and harness the opportunities of the software-defined era. Automakers who master the power of over-the-air updates stand to benefit hugely: by 2028, it’s predicted car makers in the U.S. alone will save $1.5 billion annually thanks to using OTA updates to fix vehicles.
The costly reality of OTA updates:
While there’s no doubting the value OTA updates bring, they also come with the risk of hidden costs. OEMs that are unaware of these and don’t manage them properly, risk eroding the very savings they are making.
Managing OTA software expenses requires OEMs to have complete oversight into how updates are being delivered and managed. This relies on automotive data analytics which provide OEMs with the in-depth knowledge they need to make informed decisions.
So, what is driving over-the-air update costs?
There are many factors, ranging from data usage and software architecture to infrastructure and operations.
Bandwidth: moving massive files of code from one place to another takes time and money. It could be several gigabytes per vehicle, depending on the type of features or fixes being introduced. Multiply that by millions of vehicles and you’re dealing with significant bandwidth costs.
Operational logistics and campaign management: large OTA campaigns require careful orchestration. Phased rollouts to avoid network and system overload require monitoring for failure rates while vehicle connectivity scheduling demands dedicated DevOps teams, analytics infrastructure and incident response capabilities. The result? Increased over-the-air update costs.
Lack of modular software architecture: Many OEMs still rely on monolithic software stacks, making even minor updates a challenge. Without incremental updates or modular systems, costs skyrocket due to longer update times, higher testing burden and increased transmission volume.
Memory hardware: to enable safe OTA updates, especially with firmware, vehicles need two flash memory partitions (one active, one backup), which are pricey per electronic control unit (ECU).
Engineering and integration: cars can have multiple ECUs from different suppliers and ensuring each one can safely and reliably update remotely requires considerable legwork. Any OTA update must go through rigorous testing to avoid introducing bugs. Legacy OEMs also work with multiple suppliers, each with its own software lifecycle and OTA compatibility challenges, meaning there’s lots of parts to contend with which can lead to greater costs.
Update rollback and redundancy costs: all OTA systems have a contingency plan in case an update fails. Whether it’s update rollbacks, health-checks or extra layers of quality assurance, these increase software complexity and place more demand on infrastructure.
Security and compliance: compliance with cybersecurity standards brings a requirement for end-to-end encryption, secure startup processes and anti-tampering checks. These incur engineering and ongoing maintenance costs.
Customer support and warranty risk: If an update causes issues, OEMs may be hit with warranty costs, have to pay for dealer fixes or diagnostics or face expensive lawsuits.
How data insights for automakers can help:
Being able to update vehicles remotely should cut downtime, reduce service calls and drive vehicle cost efficiency. But when data usage exceeds estimates across thousands of vehicles, it shows that over-the-air update costs require more careful management.
The key isn’t to abandon OTA updates, but to manage them wisely. From identifying data-heavy transmissions and update inefficiencies to pinpointing failure patterns and high-traffic download windows, vehicle software analytics can mitigate costs.
Automotive data analytics also help OEMs streamline operations, reduce risk and shorten turnaround times, all of which can lower update costs. Using one centralised connectivity management platform means automakers gain end-to-end visibility across fleets while the hassle of managing country-specific regulations is handled through built-in compliance management and governance. This means automakers can focus on strategic choices — such as when to deploy partial updates, catch issues early so less repair work is needed down the line and reduce update speeds.
Explore efficiencies: how automotive data analytics can reduce over-the-air update costs
Our Explore3 solution gives automakers the visibility they need to keep OTA systems efficient and cost-effective.
By delivering quality, actionable insights into vehicle-level data usage, consumer engagement and network performance, Explore3 allows OEMs to track and manage update behaviour better in real-time. This means they can anticipate and mitigate cost spikes and reduce unnecessary retries, failures and warranty claims. With this intelligence, automakers can confidently scale their OTA update programmes and reap the full benefits that remote updates bring, without the spiraling costs.
To learn more about how Explore3 can help you take control of OTA update costs and unlock smarter connected car strategies, book a demo today.
