Automakers are switching to programmatic recalls en masse: what's going on

Most manufacturers offer regular updates that cover everything from interior lighting modes and improved battery life to vital security changes.

In the past, you could build a car, shrink-wrap it, and sell it. Nowadays, a car is a living platform. Companies are learning on the go

Older automakers are having a harder time than their newer competitors. When Gartner ranked automakers last year based on their digital performance, the top seven included all Chinese and American electric car manufacturers, including Rivian, Tesla, and Nio, while traditional manufacturers received an average score of 33 out of 100.

Software problems have delayed recent launches at Volvo and General Motors, among others. Volkswagen's management became so frustrated with its own software development that last summer it signed a $5 billion cooperation agreement with Rivian.

With more and more automakers now offering gorgeous screens and infotainment systems in their cars, and with the technology of electric vehicles improving, automakers will have to find new ways to differentiate themselves from their competitors.

Software updates are also a source of revenue. Accenture estimates that by the 2040s, digital services could generate up to $3.5 trillion annually for automakers, or 40% of total revenues, up from 3% today. Opportunities range from upgrades to heated seats, self-parking, to allowing drivers to purchase food, fuel, or premium entertainment directly from the car.

Recall

Tesla reported a decline in annual sales in 2024 to 1.79 million vehicles compared to 1.81 million in 2023. The drop is attributed to increased competition from Chinese and European manufacturers.