ABI Research projects 2.03 billion SDV OTA updates by 2035

Recurring revenue goals and expanding fleets of software-capable vehicles are set to lift global over-the-air update volumes to 2.03 billion a year by 2035, according to ABI Research.

Annual OTA update volumes for software-defined vehicles stood at 546.1 million in 2025. ABI Research estimates that true SDVs, defined as Level 3 and above, will make up 16.7% of new vehicles sold in 2026. The firm links that share to a broader shift in how vehicle value is delivered and monetized.

Level 3+ SDVs are forecast to rise from roughly 16% of global vehicle shipments in 2025 to about 46% in 2035, with Level 4 shipments growing from 5.6 million to 46.6 million. The installed base of OTA-addressable Level 3+ vehicles is expected to reach 211 million in 2031, representing more than 11% of vehicles in circulation, and all SDVs are projected to generate over 1 billion individual OTA updates that year.

Asia-Pacific accounted for more than 58% of true SDV shipments in 2025 and is projected to reach 63% by 2031. BYD, Geely, SAIC, Changan, XPENG, NIO, and Xiaomi together accounted for 37% of Level 3+ SDV shipments that year, while Tesla and BYD Group led the fragmented OEM landscape at 10.6% and 9.7%. The findings come from ABI Research's Software-Defined Vehicles Market Data report, part of its Automotive research service.

Jennie Baker, Research Analyst at ABI Research, said: “Software-defined vehicles are changing the automotive business model from one centered primarily on hardware sales to one increasingly shaped by lifecycle software monetization,” “The ability to deliver meaningful functional upgrades OTA gives OEMs a path to one-off feature purchases, subscriptions, and stronger long-term customer engagement, making software architecture a strategic differentiator rather than just a technical design choice.”

Baker said: “As competition intensifies, OEM leadership in SDVs will depend on how effectively companies align centralized compute, OTA capabilities, and scalable E/E architectures,” and “Zonal and domain-based designs, combined with Ethernet networking, will be foundational to supporting the bandwidth, flexibility, and service agility needed for the next generation of automotive software platforms.” ABI Research's projections extend through 2035.