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Ford plans to launch technology for over-the-air upgrades to millions of cars — just like Tesla

2021 Ford F-150 Raptor interior

Ford

DETROIT – Ford Motor said Thursday it has launched the technology to make significant remote upgrades to its cars and trucks, and it plans to roll it out to 33 million vehicles by 2028.

The new technology would create a massive global fleet that would collect data on millions of consumers and commercial customers, giving the automaker access to lucrative new markets and potential streams of revenue.

“We believe that data is the new oil,” said Alex Purdy, director of business operations, enterprise connectivity for Ford’s enterprise connectivity unit. “It enables us to have an always-on relationship with our customer.”

Ford is calling its new over-the-air update capability “Power-Up,” highlighting its ability to enhance and upgrade a vehicle well into its lifecycle.

Tesla in 2012 became the first automaker to utilize OTA for significant upgrades such as driving characteristics. Other automakers such as General Motors have used remote updates for navigation or infotainment systems but have only recently started launching vehicles that can receive more significant upgrades.

OTA updates could save automakers billions in warranty and recall costs. They also provide a direct connection between the automaker and consumer, increasing potential earnings from data fleet monetization and recurring revenue opportunities for new features or updates.

“It’s a total reversal of the ownership model, where vehicles just used to get older,” Purdy said. “Now, Fords will get better over time.”

Ford said it has already sent OTA updates to more than 100,000 F-150 pickups and Mustang Mach-E customers since late March. An update to the F-150 for a battery drainage issue saved Ford more than $20 million in warranty costs, according to the company.

“This is highly transformative,” said Aziz Makkiya, manager of software updates for Ford’s enterprise connectivity unit. “The sky’s the limit as we have more population of vehicles that are capable of this new technology.”

Officials said OTA capabilities will eventually be available across Ford’s vehicle lineup as it releases new cars and trucks with more capable electrical systems and components that can handle the updates. The next vehicle to feature OTA updates is the upcoming Bronco SUV, according to the company.

One of the next updates will be a drawing pad and kid-friendly games for the touchscreen of the Mach-E, according to Ford. It expects to send out an update this fall to include Amazon’s Alexa voice assistant for inside their vehicles in the U.S. and Canada.

More significantly, Ford plans to update vehicles such as the F-150 and Mach-E remotely later this year to enable a new hands-free driving system for highways.

Ford CEO Jim Farley has touted data analytics and vehicle connectivity as important opportunities for the automaker, especially for its profitable commercial business customers and EV buyers.

“Those are growth initiatives that I believe are not in the stock price today,” he previously told CNBC. “Not that that’s the only thing that’s important, but they’re growth initiatives that could really add tremendous value.”

Since Farley became CEO in October, shares of Ford are up by about 70%. That includes a roughly 30% increase in 2021. The automaker’s market value is $44 billion.

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