Automotive OTA Updates Market Outlook by Type (Software, Firmware), Propulsion (Internal Combustion Engine, Electric), Vehicle Type (Passenger Vehicle, Commercial Vehicle), Application (Telematics Control Unit, Infotainment System, Electronics Control Unit) - Global Industry Revenue Estimation and Demand Forecast to 2030

Market Overview

The global automotive OTA updates market size was USD 3,315.8 million in 2022, and it is expected to reach USD 13,959.5 million by 2030, advancing at a CAGR of 19.7% during 2022–2030. This can be attributed to the increasing number of connected cars and electric vehicles (EVs). With the rapid growth in the number of such automobiles, which depend heavily on advanced software, the demand for OTA updates continues to rise. As a result, OEMs are investing in technologies that update the automotive software wireless, to allow people to have their vehicle in the optimum working condition.

Software Category Contributes Majority of Revenue

The software category accounted for the larger revenue share, of 80%, in 2022, and it is further expected to maintain its dominance during the forecast period. This is due to the advancements in connectivity technology and deployment of IoT, which have made connectivity between embedded automobile systems and connected devices easier. This enables the provision of critical information, such as the location of fuel and charging stations and battery and charging status, in addition to facilitating remote diagnosis for all types of connected vehicles.

Furthermore, the OTA services offered by companies to upgrade vehicle software are fast and secure, which, in turn, results in the high sales in the category.

Simplification of Automotive Software Upgradation Process Drives Market Growth

The increasing automotive digitalization implies that vehicles need regular software updates, including cybersecurity updates, to keep up with the latest advancements in connectivity technologies. Instead of repeatedly recalling sold automobiles to a garage, it is much more efficient as well as economical to install these updates wirelessly, or over the air. Moreover, OTA updates help facilitate an IoT-enabled environment by enhancing functionality, making it easier to introduce new features, and allowing devices to stay longer in the field. The OTA technology manages software and lets users wirelessly upgrade the operating firmware from their mobile devices.

Furthermore, companies offering OTA services enable connected vehicles to receive updates regarding their functioning. New firmware is published on the portal and allows devices to be updated individually or in groups, with a single click. Besides, OTA campaigns can be monitored in real time and systems can be upgraded as per convenience.

Electric To Be Faster-Growing Category

The electric category, under the propulsion segment, will witness the faster growth during the forecast period, with a CAGR of 28%. This can be ascribed to the increasing government support, in the form of incentives and grants, for the adoption of EVs and the stringent emission regulations. Moreover, almost all EVs are equipped with advanced connected systems for efficient operations and high level of safety and security.

Additionally, the ICE category held the larger market share in 2022, and it is further expected to maintain its position in the coming years. This can be ascribed to the fact that not only cars but most medium- and heavy commercial vehicles are driven by an internal combustion engine. Moreover, OTA updates have enhanced predictive maintenance, cost savings, and allowing devices to stay operational without malfunctioning longer. The OTA technology manages software and lets users wirelessly upgrade the operating firmware from their mobile device. Hence, as the majority of the vehicles sold annually are ICE variants, the category is expected to continue dominating the market during the forecast period.

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Incorporation of Smart, Connected Technologies Is Key Industry Trend

The increasing adoption of the IoT technology is encouraging major automobile manufacturers to shift their focus to connected vehicles and either launch new variants or integrate advanced connectivity features in the existing models. This is a response to the increasing demand for state-of-the-art infotainment, telematics, and navigation systems by people. These systems rely on the software installed on the embedded automotive hardware, which requires regular updates for smooth functioning. Thus, the rising incorporation of smart, connected technologies is a major trend being observed in the automotive over-the-air updates market.

TCU Category To Hold Largest Revenue Share

The telematics control unit (TCU) category accounted for the largest share, of 38%, in 2022, and it is further expected to dominate the market during the coming years. This can be attributed to the rising number of telematics applications, with the continuous rise in the penetration of connected vehicles. These applications assist consumers with the remote locking and unlocking of their automobiles and roadside assistance. Additionally, they provide fleet management services, including vehicle finance, maintenance, tracking, and diagnostics, for the efficient operation of all systems.

Introduction of New Passenger Safety Norms

The strict norms related to passenger safety are expected to drive the automotive OTA updates market around the world. Vehicle safety has always been a prime concern for automotive manufacturers, and with the introduction of newer safety regulations and vehicle monitoring standards, it has become imperative for manufacturers to make their models compliant. Moreover, with the increasing sophistication in the automotive technology and the improving degree of programmability, automakers are rapidly focusing on upgrading their automobiles.

Passenger Vehicles Witness Higher Rate of Wireless Software Updates

Passenger vehicles accounted for the larger revenue share, of around 68%, in 2022, and it is further expected to maintain its position during the predicted period. This will be due to the increasing sales of mid-range and premium passenger vehicles with added features, such as autonomy. Additionally, autonomous cars are equipped with a variety of systems for eye tracking, virtual assistance, speech recognition, driver monitoring, gesture recognition, and natural language interfaces. These systems heavily rely on regular OTA updates for safe and secure operation, which further contributes to the market growth.

Rising R&D in Connected Car Technologies Drives Market

With the advent of programmable features in modern automobiles, manufacturers are now able to upgrade certain aspects of vehicle performance through software updates. Since the OTA update technology is vastly unexplored, OEMs are constantly investing in R&D in order to make their vehicles more efficient in terms of fuel economy, performance, and customizability from a software standpoint.

Hence, as the automotive industry moves toward connectivity features, automotive OTA update services would be in even higher demand. Therefore, the increasing R&D in connected car technologies will prove to be a major driver for the market.

North America Dominates Market

North America accounted for the largest revenue share, of around 37%, in 2022, and it is further expected to maintain its dominance during the coming years, due to the increasing adoption of connected vehicles in the region. The demand for automobile networking, navigation, communication, and entertainment features has increased immensely with the growing compatibility of mobile devices with vehicles. Additionally, the OEMs and technology providers in the region are consistently investing substantial sums in the creation of robust technologies, to attract customers. Moreover,

• The U.S. contributes the majority of the revenue to the region, owing to the stringent government regulations and growing demand for safer vehicles.

The European region accounted for a substantial revenue share in 2022, and it is further set to maintain its position during the forecast period. This is because the region has a large number of automobile manufacturers and a high adoption rate for cutting-edge automotive technologies. Additionally, the market size is being boosted by the rising demand for high-end vehicles, growing number of vehicle manufacturers, and significant capital expenditures in the R&D and manufacturing of automobiles. Furthermore,

• Germany contributes the majority of the revenue to Europe, and it is expected to maintain the same trend in the coming years. This can be ascribed to the presence of a large number of industry players and technological advancements in the automobile industry.

APAC will register the fastest growth in the market during the forecast period. This can be ascribed to the increasing usage of passenger cars, as the region has a high number of daily commuters and a high production capacity. In addition, the rising disposable income, improving lifestyles, enhancing communication and information technology infrastructure, and growing count of connected devices in vehicles are responsible for the fast regional growth. Furthermore,

• Emerging economies, such as China, India, and South Korea, hold significant regional market shares as they are home to a huge automobile industry. Additionally, the growing need for passenger cars due to the rising population, increasing acceptance rate of smart technologies, and surging traction for EVs drive the market here.

Top Automotive OTA Update Providers Are:

• DENSO Corporation
• Aptiv PLC
• Continental AG
• Garmin Ltd.
• HARMAN International
• HERE Global B.V.
• Infineon Technologies AG
• Nvidia Corporation
• Qualcomm Incorporated
• Robert Bosch GmbH
• Xevo Inc.
• Lear Corporation
• Verizon Communications Inc.

Market Size Breakdown by Segment

The report analyzes the impact of the major drivers and restraints on the market, to offer accurate market estimations for 2017–2030.

Based on Type

• Software
• Firmware

Based on Propulsion

• Internal Combustion Engine (ICE)
• Electric

Based on Vehicle Type

• Passenger Vehicle
• Commercial Vehicle

Based on Application

• Telematics Control Unit (TCU)
• Infotainment System
• Electronics Control Unit (ECU)

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe Automotive
  • Germany
  • France
  • U.K.
  • Italy
  • Spain
• Asia-Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia
• Latin America
  • Brazil
  • Mexico
• Middle East and Africa
  • Saudi Arabia
  • South Africa