Automotive Over-The-Air (OTA) Update Market Size - By Vehicle, By Component, By Application (Telematics Control Unit (TCU), Electronic Control Unit (ECU), Infotainment, Safety & Security), By Connectivity & Forecast, 2024 - 2032

Automotive Over-The-Air Update Market Size

Automotive Over-The-Air Update Market size was valued at USD 3.8 billion in 2023 and is estimated to register a CAGR of over 17% between 2024 and 2032. The increasing demand and production of connected vehicles are significantly driving the market by enabling seamless, remote software and firmware updates. As more vehicles become equipped with advanced connectivity features, automakers can enhance vehicle performance, security, and functionality without the need for physical recalls.
 

In August 2024, Tesla announced the recalling of 1.68 million vehicles in China to address a potential issue with the frunk lid unable to detect its unlocked state, which could obstruct the driver's view. The recall affects locally produced Model 3 and Model Y vehicles manufactured between October 2020 and July 2024. Tesla has planned to fix the issue through an OTA update, issuing alerts for the frunk's unlocked state. This is one of Tesla's largest recalls in China, following a similar large-scale recall in December 2023.
 

Another driver of the automotive OTA update market is the rapid advancement of vehicle infotainment systems. As consumers demand more sophisticated in-car entertainment and connectivity options, automakers utilize OTA updates to continually enhance user interfaces, integrate new apps, and improve system performance, ensuring vehicles remain up-to-date with the latest technological innovations.
 

A major challenge in the automotive OTA update market is ensuring cybersecurity. As vehicles become increasingly connected, they become potential targets for cyberattacks. For instance, in January 2023, a group of seven security researchers discovered numerous vulnerabilities in vehicles from 16 car manufacturers, allowing control over car functions and access to sensitive information.
 

The affected brands include Acura, BMW, Ferrari, Ford, Genesis, Honda, Hyundai, Infiniti, Jaguar, Kia, Land Rover, Mercedes-Benz, Nissan, Porsche, Rolls Royce, and Toyota. These vulnerabilities were reported in telematics systems, automotive APIs, and infrastructure, enabling actions such as starting/stopping engines and accessing PII. Notable issues included remote engine control using VINs, and access to internal applications and customer data. Manufacturers promptly released patches to address these security flaws.
 

Automotive Over-The-Air Update Market Trends

The ongoing trend in the automotive OTA update industry is the increasing integration of AI and machine learning to enhance the efficiency and personalization of updates. Automakers are leveraging these technologies to predict maintenance needs, optimize vehicle performance, and deliver tailored features to drivers.
 

For instance, companies such as Tesla and BMW are using AI to analyze driving patterns and environmental conditions, enabling more precise and timely updates. Additionally, the focus on cybersecurity is intensifying, with advanced encryption and threat detection systems being integrated to protect against potential hacks. This trend is driving a shift towards more secure, intelligent, and user-centric OTA updates, ultimately improving the overall vehicle experience.
 

For instance, in June 2024, T-Systems announced a collaboration with Aurora Labs, an AI-driven automotive software company, to offer advanced OTA software updates. Their joint solution combines T-Systems’ end-to-end OTA platform with Aurora Labs' differential update technology, optimizing Time-to-Market and total cost of ownership for Software Defined Vehicles (SDV). The company’s Line-Of-Code Intelligence (LOCI) ensures smaller update files and reliable rollbacks, while T-Systems provides scalable and modular connected car services. This collaboration aims to enhance vehicle performance, user experience, and cybersecurity, addressing key industry challenges.
 

Automotive Over-the-Air Update Market Analysis

Based on component, the market is divided into software and services. In 2023, the software accounted for a market share of around 69%. This segment dominates the OTA update market due to its pivotal role in enhancing vehicle functionality and performance. Software updates are essential for adding new features, improving system stability, and addressing security vulnerabilities, which directly impact the user experience and vehicle safety.
 

Unlike the service segment, which focuses on providing support and maintenance, software updates offer continuous improvements and innovation, making them a critical component for automotive manufacturers. Additionally, software updates are often delivered at lower costs and with greater efficiency compared to traditional service methods, further driving their dominance in the market.
 

Based on connectivity, the automotive over-the-air update market is categorized into cellular (4G/5G), Wi-Fi, Bluetooth, and satellite. In 2023, the Bluetooth segment accounted for a market share of around 49%, due to its widespread availability and integration in most modern vehicles. This technology provides a low-cost and reliable connection for transmitting updates without requiring additional infrastructure. It offers sufficient bandwidth for smaller updates and incremental software changes, making it ideal for frequent, minor updates.
 

The ease of pairing devices and its secure connection protocols enhance user convenience and data security. Additionally, Bluetooth's low power consumption is advantageous for maintaining battery life in connected devices. This combination of factors makes Bluetooth the preferred choice for OTA updates in many vehicles.
 

For instance, in September 2023, Particle unveiled Asset OTA, which expands Particle's OTA capabilities to cover all components and processors in a device. This feature enables systemwide software updates over Bluetooth through a Particle module or gateway. Despite being a highly technical feature, Asset OTA is significant because it leverages deep technical expertise and customer discovery. It allows bundled updates for various subsystems, ensuring compatibility and reliability. This development makes Particle's OTA service even more robust, allowing seamless, secure updates across complex systems.
 

Asia-Pacific dominated the global automotive over-the-air update market with a major share of around 30% in 2023, due to its rapidly growing automotive industry and high adoption of advanced technologies largely driven by China. The region is a major hub for both electric vehicles and smart cars, driven by robust manufacturing capabilities and significant investments in automotive technology. Additionally, the rising demand for connected car features and increasing high-speed connectivity have further accelerated OTA updates. Countries such as China and Japan are at the forefront, leveraging their technological expertise and large consumer base to drive market growth.
 

North America is the second-largest market for OTA updates, largely due to its mature automotive sector and high adoption rates of connected vehicle technologies. The presence of major automotive manufacturers and technology companies in the U.S. fosters innovation and implementation of advanced OTA solutions. Additionally, strong infrastructure for internet connectivity and high consumer demand for the latest vehicle features contribute to the region's significant market share. Regulatory support and industry standards in the region also promote the widespread use of OTA updates.
 

Europe ranks as the third-largest OTA update market, driven by stringent regulatory requirements and a strong focus on automotive safety and emissions standards. The European automotive industry emphasizes technological innovation, which fuels the demand for continuous software updates. The region's commitment to electric and autonomous vehicles, along with high consumer expectations for advanced features and connectivity, supports the growth of the OTA market. Additionally, Europe's extensive network of automotive manufacturers and technology providers contributes to its substantial market presence.
 

Automotive Over-the-Air Update Market Share

Harman, Bosch Mobility, and Infineon Technologies hold a significant market share of around 38% in Market in 2023. These companies invest heavily in research and development, driving innovation in Over the Air Update. These companies leverage partnerships with automotive manufacturers and retailers to expand their market reach. Their strong distribution networks ensure OTA updates are readily available to consumers across various regions.
 

By offering a range of products at different price points, these companies make Over the Air Updates accessible to a wider audience, including both premium and budget-conscious consumers, thereby expanding the market.
 

Automotive Over-the-Air Update Market Companies

The major players operating in the over-the-air update industry are:

• Harman International
• Bosch Mobility
• Blackberry QNX
• Infineon Technologies
• Thales
• Digi International
• NXP Semiconductor
   

Automotive Over-The-Air Update Industry News

• In July 2024, HARMAN launched the OTA 12.0 release, significantly enhancing its OTA solution to address evolving E/E vehicle architectures and critical business needs. This new version focuses on increasing the security and robustness of OTA update workflows. HARMAN's OTA solution, used by over 40 global vehicle manufacturers, now supports both high-end compute units and legacy ECUs, accommodating the shift to centralized and software-driven architectures. The release introduces distributed onboard OTA orchestration, enabling efficient updates across multiple ECUs and handling larger software images. It also includes improved offboard performance, enhanced cybersecurity, and user interface upgrades, all designed to streamline operations and bolster security.
   
• In January 2024, Infineon Technologies and Aurora Labs partnered to enhance automotive safety with new AI-driven predictive maintenance OTA solutions. Announced at CES 2024, their joint offering combines Aurora Labs' Line-of-Code Intelligence™ (LOCI) technology with Infineon’s 32-bit TriCore™ AURIX™ TC4x microcontrollers. This solution aims to improve the reliability and safety of critical components such as steering, braking, and airbags by enabling real-time monitoring and response to software issues, while protecting against cyber threats. The collaboration promises to support OEMs in developing safer, more reliable vehicles and meeting stringent safety standards. The new solution is available now, leveraging Infineon’s robust MCUs and Aurora Labs' advanced AI features.
   

The automotive over-the air (OTA) update market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($Bn) from 2021 to 2032 for the following segments:

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Market, By Vehicle

• Passenger Vehicles
• Commercial Vehicles
  • Light Commercial Vehicles
  • Heavy Commercial Vehicles

Market, By Component

• Software
  • Software Updates (SOTA)
  • Firmware Updates (FOTA)
• Services

Market, By Application

• Telematics Control Unit (TCU)
• Electronic Control Unit (ECU)
• Infotainment
• Safety & Security
• Others

Market, By Connectivity

• Cellular (4G/5G)
• Wi-Fi
• Bluetooth
• Satellite

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA