Last month, my car went into the shop for its third software-related recall in six months. Once again, the friendly guys at the dealership were unable to install the necessary update themselves. Instead, our now-undriveable SUV sat there, waiting its turn with the experts at BMW headquarters. The waiting list took four days.
This delay was painful and useless. Automakers have long learned that they must have the necessary parts and labor available before a vehicle is actually recalled for recall. Surely the company that claims to have 9 million fully upgradeable cars on the road could already set up a similar software process.
Managing such updates will become increasingly important as electric vehicles, sophisticated digital information and safety systems become increasingly common in gasoline-powered cars. Software fixes accounted for 15 percent of recalls in the United States last year, compared to 6 percent five years ago, according to data from the National Highway Traffic Safety Administration.
NHTSA records show that BMW's three software recalls in the U.S. last year put it ahead of several competitors. Ford had the most vehicles overall with 19, closely followed by Chrysler. Tesla had the largest share, as 50 percent of the 16 recalls it made required a software fix. This is not surprising given that electric cars rely more on software and contain fewer parts than internal combustion engines.
But the recall data only scratches the surface of the larger software problem. Automakers, like mobile phone service providers, routinely use updates to improve existing functionality and sell new services to existing customers. Tesla was a pioneer in offering regular “over-the-air” upgrades and paid subscriptions to its Autopilot self-driving system.
Most manufacturers regularly send out updates covering everything from interior lighting modes and improved battery usage to safety-critical changes. “Before, you could build a car, shrink it, package it and sell it,” says Kevin Mixer, a senior analyst at consultancy Gartner. “Now the car is a living platform. . . . Companies are learning quickly.”
This is more difficult for older automakers than for their newer competitors. When Gartner ranked automakers based on their digital performance last year, the top seven were all Chinese and American electric vehicle makers, including Rivian, Tesla and Nio, and the traditional manufacturers recorded a woeful average score of 33 out of 100.
Software problems have delayed recent launches at Volvo and General Motors, among others. Volkswagen executives were so frustrated with their in-house software development that they signed a $5 billion agreement with Rivian last summer.
Traditional automakers struggle with updates for the same reason big banks spend billions updating back-office technology: sprawling legacy systems. While Tesla started with a clean slate, existing automakers have to contend with legacy electrical systems and production lines, bypass firewalls, and integrate software code written by suppliers.
This means that some updates easily float out of the ether. Others turn the car into a brick. Or, as with my recent problems, the associated BMW app misleads me into believing that my car is located 1,300 miles east of its true location with a battery life that is half its actual battery life.
The rewards of getting this right are great. As more cars offer stylish displays and infotainment systems, and electric vehicle battery technology improves, automakers will need to find new ways to differentiate themselves from their competitors.
Luxury goods makers have already shown that making customers feel like they are getting something special is crucial to convincing them to pay more. If done properly, software updates can strengthen automaker-customer relationships, maintaining the regular communication provided by oil changes and maintenance checks.
“User experience and vehicle design are once again front and center of what can differentiate cars,” says Jurgen Rehrs, global automotive sector head at consultancy Accenture. “Customer care in the best possible sense.”
Software updates are also revenue opportunities in themselves. Accenture estimates that digital services could generate up to $3.5 trillion annually for automakers by the 2040s, or 40 percent of total revenue, up from 3 percent today. Possibilities range from upgrades to heated seats and self-parking to enabling drivers to purchase food, fuel or premium entertainment directly from the vehicle.
But that lucrative future will have to wait until automated groups master the art of seamless software updates. As the two BMWs' visit to car purgatory shows, that has eluded them until now.
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