Automakers' OTA Upgrade Strategies Are Undergoing Significant Changes; Connectivity Penetration Rate May Reach 85% by 2030
"By 2030, the global connected car market is expected to grow to 77 million units, with a penetration rate of 85%. It's estimated that 95% of new connected cars will have over-the-air (OTA) upgrade capabilities, focusing on in-vehicle and driving assistance." On August 14th, S&P Global Automotive's chief analyst, Li Fan Ni, announced at the "2025 Mobility Intelligence Dialogue" series event that automakers' OTA upgrade strategies are undergoing significant changes.
In response to recent policy tightening on intelligent connected cars, Li Fan Ni told a reporter from Every Day Economic News in an interview that current automaker OTA upgrade strategies are shifting from rapid iteration to a more stable pace. By the second half of 2024, some automakers can still maintain a software version update frequency of once every two weeks, but by the first half of 2025, the industry as a whole has slowed down significantly, reflecting the trend towards standardization in software management.
"Now, when automakers upgrade their software, they not only need to integrate new versions, but also submit complete software packages and functional explanations to regulatory agencies to ensure compliance. This marks the industry's gradual transition towards maturity." Li Fan Ni believes.
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In terms of technological innovation, the three-electric system is undergoing a leapfrog development from single-performance competition to system integration capabilities. Yang Jie, senior analyst at S&P Global Automotive's China automotive supply chain and technology team, pointed out that in the electric field, apart from single-performance comparison, system integration and global adaptability are also key focuses.
"Chinese manufacturers have entered a high-integration stage in electric drive technology, evolving from early 3-in-1 systems to 12-in-1. This has integrated core components such as motors, controllers, reducers, and charging machines into a single platform. This change not only improves power density and efficiency but also shortens adaptation cycles and reduces manufacturing and maintenance costs. Additionally, integration is beneficial for automakers' overseas expansion by reducing foreign production steps, difficulties, and costs." Yang Jie stated.
From an industry-wide perspective, the Chinese automotive market is undergoing a deep adjustment. Tao Guang, joint general manager of S&P Global Automotive's Greater China automotive analysis team, pointed out that according to estimates, domestic automobile production capacity reached its peak in 2017-2018, and over the past two years, as the auto industry has weeded out the strong from the weak, many new forces have begun to exit, resulting in a significant decline in overall production capacity. Although current utilization rates are at relatively low levels, accompanied by continued growth of export markets and domestic car consumption recovery, it is expected that domestic automobile production capacity will return to a healthy level of around 80%.
In this background, S&P Global Automotive's Greater China business leader, Zhang Lei, emphasized that Chinese automakers are facing a rare global opportunity window. From intelligent cockpit to three-electric systems, and to mid-to-heavy truck fields, can they break through in electric drive integration, local production, differentiated cockpit services, etc.? This will directly determine the position of China's automotive industry in the next round of global automobile industry segmentation.
Every Day Economic News