Hyundai Announces Future Roadmap: Subscriptions, Software Defined Vehicles, and OTA Updates

Matt Posky
by Matt Posky

Hyundai Motor Group – which includes Hyundai, Kia, and Genesis – has announced a comprehensive plan for its products from 2025 onward with the key components being perpetual connectivity, subscriptions, and software-defined automobiles. It sounds benign but actually represents a major shift in the way the company operates by calling for widespread platform standardization and leaning into novel revenue streams reliant on vehicles existing on its corporate network.

"By transforming all vehicles to Software Defined Vehicles by 2025, Hyundai Motor Group will completely redefine the concept of the automobile and take the lead in ushering in a never-before-experienced era of mobility," Chung Kook Park, President and Head of Hyundai’s R&D Division, stated. "Creating visionary vehicles empowered with the ability to evolve through software will enable customers to keep their vehicles up to date with the latest features and technology long after they have left the factory."

The sales pitch here is that Hyundai Motor Group will be able to offer customers new features that can be ordered (or unlocked) via over-the-air (OTA) updates. Though determining what Hyundai Motor Group gets out of the deal requires you to read the press release it issued earlier this week. Considering how loaded up with corporate buzz terms it happens to be, I’ll spare you from as much as possible and quote its central thesis: “Constantly upgradeable software will provide diverse, stable revenue streams while offering fresh functionality and features to keep customers' vehicles up to date.”

To paraphrase, the manufacturer feels that offering these services means it’ll be able to get more money from a larger swath of customers over a longer period of time – presumably by telling them they need to constantly update their vehicles. And that may be necessary because the business also plans on standardizing models as much as possible to reduce development time and operating costs.

Hyundai Motor Group said this would apply not only to new vehicles but also to “those already purchased” and focus on “convenience, connectivity, security, and driving performance.” But the situation is supposed to be kicked into overdrive once the manufacturer’s next-generation EV platform, integrated controller, and internally developed Connected Car Operating System (ccOS) come into play in 2025.

“The Group expects 20 million vehicles to be registered to its connected car service worldwide by 2025. Connected vehicles equipped with cutting-edge telecommunication features will create unprecedented value and possibilities and provide customers personalized services, such as software subscriptions.” explains the release, “Furthermore, connected car data will network with future Group mobility solutions, including Purpose Built Vehicles (PBVs), Advanced Air Mobility (AAM), robotaxis and robots. By establishing a new data platform, innovative services will be provided through connecting and processing the various data generated throughout the car life cycle, as well as promoting the creation of an open ecosystem in partnership with diverse industries such as logistics and accommodation.”

That sounds a lot like Hyundai, Kia, and Genesis will be selling your data to loads of partnered companies. Though I suppose this shouldn’t be all that surprising since the entire industry has been working toward this kind of stuff for the last decade. Some companies are already using similar business models and most brands that haven’t are already investing heavily into the relevant technologies so they eventually can. Data has always been a valuable commodity and automakers don’t want the tech industry to be the only industry profiting from it.

Hyundai Motor Group has already stated that it plans on investing 18 trillion won (almost $12.6 billion USD) in resources by 2030 to advance the plan and help establish a new Global Software Center “to bolster its software capabilities and accelerate Software Defined Vehicle development.” But the company actually opened its first data center in Guizhou Province, China, in 2017.

It’s something a lot of automakers have been doing over the last few years.

I utterly despise most forms of vehicular connectivity and I’m telling you this to make my bias totally transparent while also using it as an opportunity to bash an industry that’s diving into anti-consumer practices as quickly as possible. In my estimation, very little of what’s being offered via over-the-air updates seems to actually benefit the consumer and instead sets the stage for automakers to nickel and dime customers via subscriptions that provide access to the physical hardware that’s already been equipped to the vehicle. Meanwhile, they’re using those same services to harvest your personal information in a manner not dissimilar to how big tech companies track your activity online.

The alleged upside for you is that companies can leverage the software to offer drivers new services as they become available. But this has also opened the door to automakers stripping vehicles of preexisting features or even limiting functionality when there’s a dispute about what’s supposed to be activated. Ultimately, you’re losing control of one of the most expensive items you own so the manufacturer can introduce subscription fees and swipe information.

That’s not to discount optimists who feel connectivity will gradually usher in upgraded features we can’t yet imagine. The potential for true innovation exists here and there have already been some neat little enhancements thanks to vehicles being able to interface with the internet. But there’s also good reason to be skeptical based on how we’ve seen the concept handled thus far. Software updates have become a convenient way for automakers to buy time during mechanical recalls and there’s little reason to assume these proposed subscription plans are being advanced primarily to benefit the customer unless you happen to be incredibly naive.

In exchange, your car becomes more like the phone you’re already carrying around by offering similar functions and apps – it’s just embedded into the dashboard now.

Though finding the premise less-than appetizing won’t change much. This is the way the industry is currently heading and we’re going to have to deal with it until the backlash is too strong for manufacturers to ignore, it ultimately proves to be unprofitable, or connectivity is normalized to a point that almost nobody is out there complaining about it anymore.

[Image: Papin Lab/Shutterstock]

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Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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3 of 34 comments
  • Slavuta Slavuta on Oct 17, 2022

    "Software Defined Vehicles".... do they consult with Bill Gates?

    • ToolGuy ToolGuy on Oct 17, 2022

      Hardware: If you play with it long enough, it breaks.

      Software: If you play with it long enough, it works.

  • TDIGuy TDIGuy on Oct 18, 2022

    So we have Software as a Service (SaaS), Platform as a Service (PaaS), etc. Now we have Automobile as a Service (nevermind)?

    Of course we also haven't yet heard what will happen when they are resold as used cars if the paid-for features will remain or get turned off.

    Forget shrink wraps for today's cars, I'm looking into tinfoil wraps, lol.

  • Dartdude They need to rebrand the models, The standard model should be Wagoneer and long version should be Grand Wagoneer. There should offer the Ram Rev powertrain in these
  • Irvingklaws Seems more like they're adopting Honda styling queues. Now if they would just adopt their reliability...
  • FreedMike "Obsidian Edition."Oooooh, obsidian is really, really hard stuff.
  • John The awesome Infiniti G series saved this company 20 years ago, but they are right back on track to obsolescence. (yawn)
  • Teddyc73 White with black wheels, I'm so sick of. Or dull grey and black wheels. Just stop.