Debate worth having: can over-the-air updates really add value to your car?

A key feature of today's connected vehicles, over-the-air (OTA) updates allow manufacturers to remotely upgrade the software in your car via Wi-Fi or network data signal, and can include brand new features being added. 

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. 

Living in the age of the software-defined vehicle, it’s now par for the course that new cars receive OTA updates. Nearly all of the major manufacturers offer them, including Mercedes, Vinfast, Jaguar Land Rover and BMW.

Software over-the-air (SOTA) updates include features such as navigation systems, which can be updated with useful real-time map updates that keep navigation systems up-to-date. Another example of a software update is an improvement to an infotainment system, such as a gaming system or in-car karaoke app. 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. 

EV does it

John Ellmore is Editor of Electric Car Guide, a UK-based website for consumers that offers advice, research and guidance for EV buyers. "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. When it comes to SOTA updates, these can also add value—updates to do with lane control and driver assistance."

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. One Toyota update unlocked 30 miles of extra range, according to Top Gear. 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.

The Ericsson Connected Cars report said in 2021 that besides OTA updates being a convenient way to keep your car’s systems up-to-the-minute, these kinds of updates are actually also a way to increase a car’s worth—even when it’s already had an owner and been sold second-hand. 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.

"A feature like heated seats is unlikely to add value to your car anyway," John said. "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’s also a different story depending on whether you’re an individual driver, or you’re a fleet manager. 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. So being charged US$20 or US$30 per month on top of that for an OTA update subscription? That’s a bit of a hit, and it leaves a bad taste," Rei said. 

Rei believes that although OTA updates "can be valuable", they can be overhyped in terms of the possibility of adding value. "If I’m buying a car, then I would 100% prefer one that has OTA updates that will keep on improving the user experience over time. But the question of whether it increases the car's value is dubious," Rei said. 

"Cars are now acting like cellphones when they get updates. But there’s also the same benefits and problems that you see with phones. You get a better user experience, which is fantastic, but at the same time, if your car is a bit older, then older hardware tends to not do so well with those newer software updates, and there are elements which do slow cars down."

In regards to OTA updates adding value to your car, Rei is skeptical. "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 may be updates that absolutely do increase the worth of a vehicle, but essentially, car manufacturers releasing the same model of your car at a lower price each year will be the things that drives down the value of yours."

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.