Survey by Strategy Analytics and Aurora Labs shows new revenue streams for OEMs on the rise

Vehicle Software Intelligence is essential to enable deep insights into automotive software behavior

• More than 76% of respondents are planning to own an electric vehicle within the next several years
• 44% would pay up to $20 per month for additional features delivered as an over-the-air (OTA) update
• 92% of automotive professionals state that it is difficult or very difficult to ensure software quality

Tel Aviv, Boston, November 2, 2022 – Aurora Labs, provider of Vehicle Software Intelligence solutions, announces the results of its third annual Automotive Software Survey conducted together with the leading market research and consulting firm Strategy Analytics. For the study, more than 200 experts worldwide from the automotive and supplier industry as well as the software sector were surveyed.

The survey reveals increasing enthusiasm about EV adoption. While in 2021, about 11% of respondents owned an electric vehicle, the number has already increased to 15% within one year. Additionally, more than 76% of those surveyed plan to own an EV in the future, 38% already within the next three years. This is a clear sign how fast EV adoption will move forward.

Additional revenue streams for OEMs through OTA updates

This year’s survey also includes beneficial outlooks for automotive manufacturers. Almost 44% of those surveyed would pay for optional vehicle functionality after they have already purchased the vehicle. This means: A large part of consumers are willing to pay for upgrades that their vehicles can receive via OTA updates – either as a one-time fee or as a subscription.

44.4% of respondents would pay up to $20 per month for additional services, 14% would even pay up to $50. These results indicate that consumers are open to new business models that could bring OEMs additional and recurring revenue streams through software sales. An additional finding supports that conclusion: 62% of the automotive professionals surveyed expect that OEMs will make up to 10% of their revenue from the selling of new features and functions over-the-air in model year 2027.

When it comes to dealing with OTA updates, the third Automotive Software Survey highlights an industry that is showing signs of real maturity, but is also realizing that the automakers need to partner with other companies in order to meet the challenges of the software-defined vehicle, develop advanced E/E architectures and guarantee OTA updates are completed with no more than 10 minutes of downtown resulting in the user experience consumers demand. Only 9% of respondents are very confident that OEMs will have the required software development skills in-house by 2025 to develop advanced E/E architectures, while 48% are somewhat confident.

“Having the necessary software development skills – in-house or by partnering with software companies – is essential to deliver a great customer experience to drivers. AI adds immense value to the vehicle software quality for automotive manufacturers by enabling deep insights into the software behavior and ensuring that OTA updates will be performed seamlessly and without vehicle downtime.” says Roger Ordman, EVP Marketing & Business Development at Aurora Labs.

Vehicle Software Intelligence needed for a deep understanding of software behavior

As new regulations for type approval suggested by the UNECE World Forum for Harmonization of Vehicle Regulations (WP.29) is starting to be implemented by OEMs, the Automotive Software Survey also asked whether current processes for the regulation and type approval of software updates are sufficient. 84% of respondents agree that the industry needs a more agile approach to support regular and frequent updates.

“The challenge is that current type approval processes were developed to regulate vehicles that were defined by their hardware. Today, software is changing more frequently, and with more potentially unintended consequences than hardware. New agile CI/CD processes will be required to ensure effective regulation that neither strangles innovation nor put consumers in danger”, explains Ian Riches, VP Automotive Practice and Director at Strategy Analytics.

Looking at the challenges that come along with ever-changing software, an overwhelming majority of 92% of respondents stated that it is difficult or very difficult to get a clear understanding of software interdependencies during the development, integration and quality control processes. OEMs might need to partner to acquire innovation so they can deliver the software-defined vehicle safely and in a timely fashion – solutions like Vehicle Software Intelligence can support automotive companies to get the deep understanding of interdependencies required to deliver a safe and secure experience. 85% of automotive professionals also agree that it is important or very important to be able to predict, rather than only react to software anomalies to minimize recalls once the car has shipped. This also highlights the necessity of AI-based solutions that enable deep insights into the software behavior for OEMs.

About Aurora Labs

Aurora Labs is pioneering the use of AI and Software Intelligence to solve the challenge of automotive software development.

Aurora Labs brings AI-based Vehicle Software Intelligence to the entire lifecycle of a vehicle from software development to testing, integration, quality control, continuous certification and on-the-road over-the-air software updates. Aurora Labs focuses on the embedded systems that are key to the development of the software-defined vehicle and enables automotive manufacturers to more efficiently manage software costs and the resources required to develop and manage new vehicle features and mobility services.

The Company’s products have been adopted on customer platforms around the world, and with a commitment to conform and meet ISO-26262/ASIL-D and ASPICE-L2, will be in vehicles in coming car models. Aurora Labs, founded in 2016, has raised approximately $100m and has been granted 90 patents. The Company is headquartered in Tel Aviv, Israel, with offices in Germany, North Macedonia, the US, and Japan.
www.auroralabs.com

About Strategy Analytics

Strategy Analytics, Inc. is a global leader in supporting companies across their planning lifecycle through a range of customized market research solutions. Our multi-discipline capabilities include: industry research advisory services, customer insights, user experience design and innovation expertise, mobile consumer on-device tracking and business-to-business consulting competencies. With domain expertise in: smart devices, connected cars, intelligent home, service providers, IoT, strategic components and media, Strategy Analytics can develop a solution to meet your specific planning need.

Strategy Analytics is now part of TechInsights.

For more information, visit us at www.strategyanalytics.com or www.techinsights.com