Is it possible for over-the-air updates to actually increase the value of your vehicle?

Over-the-air (OTA) updates are a crucial component of today’s connected vehicles. They enable manufacturers to remotely upgrade the software in your vehicle via Wi-Fi or a network data signal, and they can include brand new features. And this all takes place without you having to lift a finger—think of it like your cellphone downloading an update while you sleep. But can upgrading the software in your car actually add value to it? We asked two experts their opinions on whether these claims are realistic or overblown.

In this day and age of software-defined vehicles, it is now common practice for new automobiles to receive over-the-air (OTA) updates. They are offered by virtually all major manufacturers, including BMW, Mercedes, Vinfast, and Jaguar Land Rover. Features like navigation systems can be updated via software over-the-air (SOTA) updates with useful real-time map updates that keep navigation systems up to date. An improvement to an infotainment system, such as a gaming system or in-car karaoke app, is another example of a software update. Firmware over-the-air (FOTA) updates relate to a car’s basic functions, such as engine control, safety aspects such as emergency braking, and cruise control.

It’s EV’s job

Electric Car Guide, a consumer website based in the United Kingdom that provides buyers of electric vehicles with information, research, and advice, is edited by John Ellmore. “If updates are meaningful, then they can add value. Anything that can improve the range of an EV will increase its worth,” he told HERE360. “FOTA updates that will upgrade elements such as battery management and brakes will be really important. SOTA updates, such as lane control and driver assistance updates, can also be beneficial.” In the case of electric vehicles (EVs), range is one of the most important features that car manufacturers say OTA updates can help to improve. According to Top Gear, a single Toyota update enabled an additional 30 miles of range. Meanwhile, Polestar states that it has improved the efficiency of its EV batteries by 10% through improvements provided by OTA updates.

“Software is the new horsepower” states the Gartner Digital Index 2024. The report looks at the rise of the software-defined vehicle, scoring car manufacturers highly who center their designs around the digital capabilities of their cars with a “software-first” approach, such as newer American EV companies Rivian and Lucid, and Chinese brands NIO, Xpeng and BYD, against more traditional brands such as Volkswagen and Ford. The report finds that legacy automakers are struggling to keep up against the tech-first giants who design their cars as computers that you can drive, with a digital-first experience in mind.

According to the Ericsson Connected Cars report, in 2021, OTA updates are not only a convenient way to keep your car’s systems up to date, but they also increase a vehicle’s value—even if it has already been owned by someone else and is being sold as a used vehicle. In fact, the report asserted that by 2025, 50% of a vehicle’s value would be comprised of software.

John believes consumers should be cautious about OTA updates that fall into the “nice-to-have” category, like heated seat upgrades. For instance, some manufacturers may offer a free one-month trial, followed by a subscription fee to continue using the feature.

John stated, “A feature like heated seats is unlikely to add value to your car.” “If you’re looking to do this, it’s worth subscribing to features that will increase safety, range efficiency or performance.
“With OTA updates, it’s really about the price point, and what drivers are prepared to pay. It also differs depending on whether you are a fleet manager or an individual driver. One thing I would also flag is that once you’ve signed up for a subscription, it could be that a manufacturer can raise the price and you’re locked in—so that’s worth bearing in mind.”

A lot of hot air?

Rei Vardi is the founder and CEO of Eon, a sustainability-focused platform for EV car-sharing. “Buying a car is one of the most expensive purchases that you’re ever going to make. Being charged an additional US$20 or US$30 per month for an OTA update subscription? That’s a hit, and it doesn’t go away well,” Rei said. Rei is of the opinion that, despite the fact thatOTA updates “can be valuable,” they may be exaggerated in terms of their potential to increase value. “If I were buying a car, I would absolutely choose one with OTA updates that will continue to enhance the user experience over time. However, it’s questionable whether it raises the car’s value,” Rei stated. “Cars are now acting like cellphones when they get updates. But there’s also the same benefits and problems that you see with phones.

It’s great to have a better user experience, but if your car is older, older hardware tends to not work as well with newer software updates, and there are some things that slow cars down.” Rei doesn’t believe thatOTA updates increase the value of your vehicle. “I think these updates are more of a sales feature. If you tell me ‘Hey, your car is going to get better every time you download an update’, then I will say, ‘Great. I prefer that than it not happening’. But ultimately, what’s going to drive the depreciation of a car’s value is the price of new models of that car coming out.

That’s the biggest thing. Of course, there are updates that absolutely do increase a vehicle’s value; however, the primary factor that will lower your vehicle’s value is the fact that manufacturers will continue to release the same model at a lower price each year.” It certainly seems that keeping your car as up-to-date as possible won’t hurt. However, it’s ultimately up to the consumer how much money they want to invest in OTA updates—and if you’re only really interested in the likes of heated seats, don’t expect it to add much. But if an update will make your EV’s battery last longer, or your drive safer, it seems to be a no-brainer.