Smart Car OTA Industry Report: The scope of car OTA is expanding from in-car entertainment to assisted driving

With the rapid development of intelligent network technology, OTA (Over-The-Air) has become an indispensable part of the smart car field. It remotely manages the firmware, data and applications on the car terminal through the mobile network, bringing many conveniences to car owners. In the context of increasingly fierce market competition, various car companies are also exploring new profit growth points through models such as software subscription services.

Based on this background, Gasgoo Automotive Research Institute conducted research and analysis from three dimensions: the industry status, market analysis and development trends of automotive OTA. Some contents of this report are as follows:

Automotive OTA (Over-The-Air, air download technology) can remotely manage the firmware, data and applications on the automotive terminal through the mobile network. The entire system consists of OTA cloud, OTA terminal and OTA object. OTA is divided into hardware upgrade and software classification. According to the upgrade object, it can be subdivided into 6 categories: software upgrade (SOTA), firmware upgrade (FOTA), remote configuration (COTA), data update/remote diagnosis (DOTA), and other types (XOTA). Among them, SOTA is generally used in entertainment systems and intelligent driving systems. On the basis of the operating system, the application program is remotely upgraded to achieve an "incremental" update of the controller function. It generally involves a small-scale local update of the application layer, excluding the core system of the car, and has little impact on the performance and safety of the whole vehicle. The upgrade preconditions are relatively low. In theory, all electronic control units (ECUs) that support firmware updates can be covered in the FOTA range (such as automotive power control systems, chassis electronic systems, autonomous driving systems, body control systems, etc.), such as opening up autonomous driving assistance functions such as ACC/ALC, optimizing fatigue detection algorithms based on face recognition, etc.

From the perspective of development model, OTA is divided into two modes: self-developed by car companies and provided by third parties. Some car companies have established relevant departments or subsidiaries to adopt self-developed methods and are deeply involved in all aspects of OTA; among third-party OTA suppliers, there are traditional Tier 1 represented by Bosch, and other software technology companies represented by Airlabi; with the formulation of relevant national laws and regulations, automotive OTA has reached the industrial level, with software saleable functions and corresponding service systems, and the integration of various domain controls has been further improved. The corresponding OEMs will also face greater security and compliance challenges.

From the supply side, OTA suppliers are mainly divided into third-party professional suppliers and OEMs. Among third-party suppliers, the first echelon represented by Airlabi and Harman has perfect OTA development capabilities. Among them, Harman has become one of the few foreign-funded enterprises in the first echelon with Tesla; some self-developed car companies have deployed related capabilities through their subsidiaries, joint ventures, and companies with strong business relationships, focusing on breakthroughs in OTA technology in the software-defined car environment, which can fully grasp various data and contribute to vehicle safety. Most of the car companies still choose third parties to provide, and a few car companies conduct independent development. Among them, new power brands Wei, Xiaoli and Li Auto all adopt self-development, and the overall competition pattern of OTA is relatively clear.

From the demand side, most of the mainstream car companies at home and abroad can support FOTA. Among the independent brands, BYD and some new brands have achieved full-domain upgrades. Among the joint venture brands, a few car companies such as BMW can also achieve full-domain upgrades, but the overall process is still in the lead for domestic car companies. In terms of business model, with the maturity of vehicle OTA capabilities, car companies have begun to use software subscription services such as OTA paid upgrades, car networking functions and automatic driving optional packages as new profit growth points. New forces such as Wei, Xiaoli and others have launched software subscription services. At present, the core of software payment for new car companies is intelligent driving functions. The lower level is centered on high-speed intelligent navigation assistance and intelligent parking, with a price of 30,000 to 40,000 yuan, and the higher level is centered on urban intelligent navigation assistance; the intelligent cockpit functions mostly adopt a free-first-pay-later model to gradually cultivate user habits, mainly including navigation, in-car entertainment service packages, traffic packages, music cockpits, etc.

From the perspective of market performance, from 2022 to November 2023, my country's OTA installation rate continued to rise. In November 2023, the OTA installation rate reached 66.2%, an increase of 6.7 percentage points year-on-year. The TOP10 brands equipped with OTA accounted for more than 60%, among which domestic and foreign brands such as BYD and Honda had significant growth. In terms of installed brands, thanks to the rapid increase in the volume of new energy vehicles, the market share of domestic brands OTA increased to 59.2% from January to November 2023. In terms of installation rate, both domestic brands and joint venture brands have improved compared with 2022, but domestic brands are significantly higher. For joint venture brands, it reached 76.7%; in terms of penetration rate, the penetration rate of new force brands almost reached 100%, and the overall OTA penetration rate of traditional brands was relatively high. Among them, BYD under the independent brand has reached 99.7%, and the penetration rate of luxury brands such as Mercedes-Benz and BMW among joint venture brands is relatively high; from 2022 to 2023, the frequency of OTA upgrades of major car brands will increase significantly, and the high-end sub-brands of new forces brands and traditional independent car companies will be relatively obvious, maintaining a high frequency of monthly or bimonthly updates. The version is updated from multiple dimensions, such as autonomous driving, voice recognition and interaction, which will bring improvements to the performance of the entire vehicle.

In general, automotive OTA will achieve technical upgrades from function-oriented to service-oriented through the development of four stages: SOTA platform construction, FOTA platform construction, OTA application expansion, and OTA software-defined automotive operations. At the same time, it is necessary to solve the pain points in technology and compliance. The technical pain points mainly include the duration of a single OTA upgrade, the success rate of OTA upgrades, the safety and reliability of OTA upgrades, and the accuracy of OTA upgrade content; the compliance pain points are mainly in the name of OTA upgrades to cover up product disadvantages.

From a technical perspective, with the concentration of electronic and electrical architecture and the improvement of hardware configuration, the upgrade scope of future automotive OTA will become increasingly wider, extending from basic software updates to full vehicle upgrades.

In terms of application scenarios, currently most car companies' OTA is mainly focused on after-sales software updates. As OTA applications become more and more mature, they will develop from a single after-sales upgrade scenario to an application scenario throughout the vehicle life cycle. From the perspective of the vehicle life cycle, except for the parts stage which is not suitable for OTA upgrades, the final assembly stage, transshipment stage, pre-sales inventory, and the relatively mature after-sales stage can all support OTA upgrades, thereby improving the efficiency of delivery in each link.

At the same time, as security issues become increasingly prominent, the security of OTA upgrades has also become an important concern. After the vehicle establishes communication with the outside world through the Internet, the potential risks of the originally closed car being attacked, held hostage, and information leaked will increase. Establishing a security system for OTA cloud-managed vehicles is a necessary condition.

Source: "Smart Car OTA Industry Report" (2024 Edition)

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