Providing Vehicle OTA Updates While Managing Distribution Costs

Tesla has arguably been the single most influential automotive brand of the past half century. More so than any other automaker, Tesla has redefined the very nature of the automobile and what customers expect from these products over their useful lifespan. Chief among those is the idea that vehicles get improved functionality after leaving the factory without a visit to a service center. While the rest of the industry is now scrambling to catch up with those changes, it is also grappling with new cost considerations. 

Over-the-Air Updates Are Becoming the New Normal

In the process of demonstrating to the world that battery EVs can have broad appeal to an audience beyond staunch environmentalists, Tesla rethought the fundamental electrical/electronic architecture of the vehicle. We’ve had microprocessors in vehicles since the onset of strict emissions, efficiency, and safety regulations in the 1970s. Since the 1990s, many of the electronic systems have included the capability to update software and firmware, but only by a service technician with physical access. 

Now in the 2020s, we are rapidly approaching a time when virtually all new vehicles have data connectivity. Guidehouse Insights’ Market Data: Connected Vehicles report projects that nearly 120 million vehicles will be sold annually with over-the-air (OTA) update capabilities. 

The ability to use these technologies to enable OTA updates for vehicles seems like an obvious choice. But as usual, the devil is in the details. As automakers migrate to agile development processes with frequent updates, customers can be pleased by knowing that their vehicle is getting safer, more reliable, or more efficient with new capabilities over time. 

The Auto Industry Needs to Manage OTA Update Costs

However, distributing those OTA updates can get costly. In the nearly 9 years since Tesla launched the Model S with OTA capability, it has put just over 1 million vehicles on the road. The global vehicle fleet consists of more than 1 billion vehicles. Even as Tesla was launching its first truly high volume product with the Model 3, it began to realize that the distribution costs of OTA updates over mobile connections would quickly get out of hand. Once Model 3 volumes began to ramp up, the automaker changed its policy to only provide OTA updates over a Wi-Fi connection unless the customer paid for a premium data connectivity subscription. 

OTA Update Costs Illustration

(Source: Aurora Labs)

Within the next few years, manufacturers will likely be shipping tens of millions of vehicles with OTA capabilities every year. As anyone who has ever grappled with the cost of smartphone data plans knows, carriers don’t give out bandwidth for free. With OTA capability spreading to mass-market vehicles, there is no guarantee that they will be parked within range of a Wi-Fi connection, so making cellular updates more cost-effective is critical. Large file downloads are also more prone to failures, especially in a moving vehicle, which may require restarting the download, further raising the cost. Providing regular updates to fleets of millions of vehicles can quickly escalate into the hundreds of millions of dollars just for data transmission over a cellular network. 

The auto industry needs solutions to manage the size of update files to keep the costs of bandwidth, cloud storage, integration, and the on-vehicle storage in check and to provide a reliable user experience. Guidehouse Insights collaborated with Aurora Labs to evaluate the costs associated with OTA update distribution to the next-generation vehicle fleet. The cost consideration guide for Automotive Over-The-Air Updates can be downloaded free of charge from Aurora Labs, where a live cost estimation simulator is also available.