The automotive over-the-air (OTA) software market has seen big changes in the last year. The major auto OEMs are pushing hard to deploy OTA to connected cars. New regulations for both OTA and cybersecurity will be required and provide guidance on how and what needs to be done for deploying and managing ongoing OTA.
This post updates an earlier column, reflecting a flurry a recent OTA development. I will focus on these questions:
- What changes are emerging in the OTA market—technology, regulation and business models?
- Who are the key OTA players?
- What is the outlook for OTA?
The table below primarily explores how business models, technology and regulation to a large extent are rewriting the OTA playbook.
Any discussion of the auto industry must address the software-defined vehicle, which is especially relevant for OTA software updates. Most car features are now implemented through software, and accompanying hardware. OTA updates are now used regularly to fix inevitable bugs in new software code.
A software-defined car consists of a hierarchy of many platforms that communicate via APIs. This service-oriented architecture is becoming the preferred software system framework.
Automotive software is making greater use of AI technology. Machine learning and neural networks are being steadily added to OTA, cybersecurity and other automotive software platforms.
Software business models
Software creates revenue for suppliers. But for auto OEMs it has been a cost center due to expensive software development and lifetime debugging and maintenance. Automotive software is now emerging as an OEM profit center, with increased opportunities over the next decade.
Tesla has pioneered paid functional software updates, among the first OEM opportunities. Others such as BMW and VW are also in the mix.
Software-as-a-Service is another category, with multiple segments ranging from annual OTA and cybersecurity updates to delivering vehicles data from OEMs’ telematics systems as well as infotainment and other passenger content.
In mid-2020, the United Nations adopted the UNECE WP.29 OTA and cybersecurity regulation. WP.29 applies to 54 countries, including the EU, UK, Japan and South Korea. Combined, they account for about 35 percent of global vehicle sales. All auto OEMs, selling into those markets must follow WP.29 OTA regulations, showing proof of compliance to obtain type approval to enter a market.
The WP.29 regulation is a major factor in deploying both OTA and cybersecurity. Deployment generally starts in 2022, and will be required by 2024 in Europe and other regions.
A new type approval is not needed for an OTA bug fix. However, if software functionality changes as part of an OTA update, a new type approval is required.
The U.S. is not among the 54 WP.29 countries, instead using a self-certification procedure for each auto OEM.
A variety of system architecture changes are also shaping OTA software updates. The switchover to domain ECUs will require increased OTA capabilities due to more complex and larger software platforms. ADAS and especially future AV domain ECUs will include complex software platforms, tens of sensors and powerful hardware.
Over the next five years or so, an Ethernet-based architecture will emerge as the dominant network framework. Ethernet will provide faster OTA updates and more secure operation.
Key OTA players
What follows is an overview of five key OTA players list alphabetically with some perspectives on each company, their strategies and progress. This is a representative sample; a previous post includes information about other players.
Aurora Labs is the most innovative OTA software startup, offering unique, patented technology. Aurora provides what it calls line-of-code-behavior software technology—also called self-healing for software-defined cars. Aurora’s AI-based technology analyzes software during the compilation phase to analyze code for relationships between software platforms while identifying potential errors.
OTA functionality is built-in during the development and compile phase, making it easier and more cost-effective to manage OTA activities during the typical 15-year software use phases. The technology will also prove useful for managing type approval for the WP.29 OTA spec. More information is here.
Aurora’s strategy differs from other OTA suppliers in that it can be used for much more than OTA, promising more reliable code with fewer bugs—including the health of software-defined vehicles.
Aurora Labs was founded in 2016 and has so far attracted $34 million in venture funding. The company has several unnamed OTA customers and is starting volume production in late 2021. Aurora Labs is likely to be acquired.
Excelfore and eSync
Excelfore has developed an OTA software platform called eSync that includes OTA clients and a cloud platform. The eSync platform can also manage other data services, including diagnostics and fleet analysis.
Excelfore and other companies have formed the eSync Alliance to standardize the platform for use by its members. The alliance has eleven members, including Alps/Alpine, Aptiv, DSA, Excelfore, Faurecia, Hella, Mobica, Molex and ZF. The standards effort is becoming a key player in the nascent OTA market.
One eSync project is an effort with the World Wide Web Consortium and GENIVI to set standards for car-to-cloud communications. The initiative has potential data and OTA applications.
Excelfore and eSync boast more than 1 million vehicles using its OTA platform as of March 2021, including nine auto OEMs and Tier-1 suppliers. Over 60 percent were in Europe, with nearly 30 percent in China and the rest in Japan. Excelfore and eSync also had 14 million OTA vehicles under contract by mid-2021.
Harman emerged as an OTA leader in 2015 when it acquired Red Bend and Symphony Teleca. Red Bend was a leader in smartphone OTA technology. Symphony Teleca provides OTA and strong cloud capabilities. Harman leveraged these capabilities into extensive OTA services with client and cloud-based software services.
Its Ignite platform is a connected car and cloud platform delivering extensive services, including ecosystem and infotainment apps for OEMs. Harman is focused on an automotive-centric app store compliant with the Android Automotive OS. It appears Harman’s apps and connected service business are now more important than OTA.
Harman remains the industry leader with over 50 million OTA-enabled vehicles and perhaps contracts for another 50 million. It also claimed more than 40 OEM customer in 2020. Harman’s public data has not been updated since 2020.
The company has more than 20 years of experience in automotive electronics across multiple segments, with infotainment a particular focus. KPIT has been in the OTA market for more than seven years, but has maintained a low profile. It boasts a full-function OTA client and cloud platform with extensive deployment experience. It has also completed 100,000 update cycles on a single vehicle.
KPIT’s OTA platform started with infotainment, telematics and gateway segments. It now covers powertrains, ADAS, diagnostics and other data-centric applications. Compliance with WP.29 has been added to the platform.
KPIT’s cloud platform is focused on managing the large software and hardware dependencies among the many software platforms. Those dependencies include the variations OEMs must account for as they deploy OTA across models, brands and regions.
KPIT has more than 5 million OTA vehicles in-use and over 11 million additional OTA vehicles under contract. Another 8 million ECUs have been flashed with KPIT OTA-based products. The vendor has four OEM customers for OTA updates and five other OTA-related OEM customers.
The OTA software startup was founded in 2018 and currently has venture funding totaling $15 million. The founders have experience with Tesla, Uber and other auto startups. Sibros’ Deep Connectivity Platform includes OTA client and cloud services for whole-vehicle OTA updates and data collection functionality.
The Sibros platform provides multi-function capabilities with OTA as the core function. Other apps include remote diagnostics/prognostics, fleet management and analytics. The platform can provide data for usage-based insurance, parking and similar connected car applications. The platform also includes cloud-based services to manage SaaS apps from Sibros and customers. Sibros has been shipping its OTA products since July 2019.
Sibros has over 500,000 OTA vehicles in-use from 12 customers in multiple countries. It expects volume production from two auto OEMs to commence by the end of 2021.
The three-year-old startup has performed well considering how slow the auto industry usually moves for unproven suppliers.
Over-the-air capabilities are a core function that auto OEMs require to manage their increasingly software-defined cars. Hence, OTA is becoming a growth business with market forces aligning to boost expansion.
Cases in point:
- Regulations are on the books to specify the obligations of OEMs and suppliers in updating software to meet legal requirements.
- OTA technology and expertise are more than ready. Many OTA client and cloud platforms are available for deployment from competent suppliers.
- Auto OEMs want and need OTA deployment. “Tesla envy” must be solved sooner rather than later. OTA capabilities are becoming a required competitive feature. The potential for new revenue streams from future feature updates is the clincher.
- Auto buyers want reliable and convenient OTA—another smartphone impact.
- OTA platforms are becoming more than just OTA: Expanding the use of OTA technology for additional connected car functionality is rising sharply. Nearly every OTA platform can be expanded to add other applications with data flowing to and from cars.
- OTA will not be all smooth sailing: Tesla’s clean-sheet system architecture made it simple to include OTA functionality. Not so for traditional OEMs due to existing ECUs and system architectures that bring with them complexity and variations not foreseen with OTA functionality. It is much harder to add OTA capabilities for these legacy systems.
- OTA deployment complexity may favor large vendors with extensive OEM and/or Tier-1 experience and other working relationships. Among the key OTA companies mentioned here, Harman and KPIT have such relationships, as does Excelfore-eSync via its members.
OTA software updates are on a rapid growth path. An IHS Markit database tracks OTA availability by OEMs and their auto models, finding that 30 percent of vehicles sold in 2020 had OTA capability.
The OTA market is forecast to grow to 79 percent of vehicles sold worldwide by 2025. That trend is creating a strong market for OTA clients and an even larger market for cloud OTA services.
>> This article was originally published on our sister site, EE Times.
|Egil Juliussen has over 35 years’ experience in the high-tech and automotive industries. Most recently he was director of research at the automotive technology group of IHS Markit. His latest research was focused on autonomous vehicles and mobility-as-a-service. He was co-founder of Telematics Research Group, which was acquired by iSuppli (IHS acquired iSuppli in 2010); before that he co-founded Future Computing and Computer Industry Almanac. Previously, Dr. Juliussen was with Texas Instruments where he was a strategic and product planner for microprocessors and PCs. He is the author of over 700 papers, reports and conference presentations. He received B.S., M.S., and Ph.D. degrees in electrical engineering from Purdue University, and is a member of SAE and IEEE.|
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