OTA Pause? The Era of Strict Regulation for Smart Cars Has Arrived

For a long time, OTA has been regarded as one of the core selling points of intelligent electric vehicles, enabling a vehicle to continuously evolve and "remain fresh with regular use" after delivery. However, as the industry scales up and the complexity of functions increases, the risks and controversies associated with OTA have gradually accumulated.

Recently, the State Administration for Market Regulation, in conjunction with the Ministry of Industry and Information Technology, issued the "Notice on Strengthening the Supervision and Management of Recalls and Production Consistency of Intelligent Connected New - Energy Vehicle Products and Standardizing Promotions (Draft for Comment)". Compared with the notice issued at the beginning of the year, the wording is more severe, with the word "shall not" appearing six times. This includes not pushing software versions that have not been fully tested and verified to users, and not concealing defects through OTA. This document is China's first comprehensive regulatory policy formulated for the intelligent connected new - energy vehicle field, marking that the government's standardized management of this emerging industry has entered a new stage.

01

From "Free Trial - and - Error" to "Mandatory Filing"

In the past few years, OTA was regarded as an important means for car manufacturers to capture users' minds. The rapid launch of functions and iterative optimization became the norm. However, from the "Notice on Further Strengthening the Management of Product Access, Recalls, and Online Software Upgrades of Intelligent Connected Vehicles" jointly issued by the Ministry of Industry and Information Technology and the State Administration for Market Regulation, we can see that all OTA upgrades must be filed. For upgrades involving core functions such as autonomous driving, a product change permit needs to be applied for, and for defect repairs, the recall regulations must be followed.

This policy has changed the underlying logic of OTA - car manufacturers have lost the freedom to push software arbitrarily, and instead, there is full - chain supervision and mandatory compliance. The suspension of Tesla's FSD in China is a typical example. On February 25, Tesla announced the launch of FSD push in China and launched a free trial program on March 17. However, it was forced to stop only five days later, and the user - end showed "Service temporarily unavailable".

The industry generally believes that the reason is that Tesla failed to complete the filing and approval before the push. Since FSD involves the core capabilities of autonomous driving, the regulatory requirements are more stringent, so it had to be suspended pending approval. Tesla subsequently responded that it is actively promoting the registration and approval of hardware 3.0 and 4.0, and the push will resume after compliance is achieved.

Tesla is not the only one to encounter such a situation. Chinese domestic car manufacturers such as XPeng and AITO have also experienced delays. XPeng's scheduled MONA M03 OTA update in March was postponed, and AITO's OTA plan was also delayed due to incomplete filing. This series of events indicates that the new regulatory policy is not targeted at a single enterprise but is a unified tightening of the entire industry.

On April 15, 2025, the State Administration for Market Regulation issued a series of interpretations of the "Notice on Further Strengthening the Management of Product Access, Recalls, and Online Software Upgrades of Intelligent Connected Vehicles" - Online Software Upgrades (OTA) for Vehicles. It requires enterprises to file OTA upgrade activities with the State Administration for Market Regulation as required and ensure that the vehicle products after OTA upgrades meet relevant requirements such as national laws, regulations, technical standards, and technical specifications. The tightening of supervision not only slows down the pace of OTA but also triggers disputes at the levels of user experience and consumer rights.

02

The "Rift" between Car Manufacturers' Promises and User Experience

As the frequency of OTA by car manufacturers has significantly decreased, anxious car owners have even asked on social media, "Why haven't the major car manufacturers updated their OTA for so long?" There have even been rumors that "car OTA has disappeared".

For a long time, car manufacturers have been accustomed to emphasizing slogans such as "Lifetime free OTA" and "Continuous evolution" during the marketing phase. Especially for many popular models in the current new - energy market, "Becoming smarter with use" has been used as a selling point. However, when OTA is suspended due to supervision or delayed due to filing, users experience "long - term non - updates" and "stagnant functions".

On the Internet, it is common to see car owners complaining that the infotainment systems of cars of the same model and year have been upgraded, but their own cars cannot enjoy the upgrade service because the infotainment system accessories do not support it. And the manufacturers did not inform them at the time of purchase, which affects the subsequent use of the car owners.

Some car owners also said that a series of problems occurred with their vehicles after OTA upgrades. Mr. Peng, a car owner, mentioned that after the system upgrade of his car, problems such as a black screen while driving, a frozen rear - view camera, the music pausing inexplicably, occasional screen flickering on the display, and the inability to charge the phone occurred during driving. "It not only affects the driving experience, but also the safety is difficult to guarantee." Even after three system updates, the problems with the vehicle still have not been solved.

Legal experts point out that if car manufacturers promise "Lifetime OTA" but fail to fulfill it, they may infringe on consumers' right to fair trade and right to know, constituting a breach of contract or even false advertising. Once large - scale complaints or class - action lawsuits occur, it will not only involve economic compensation but also cause serious damage to the brand.

Meanwhile, users' expectations for OTA are being reshaped. In the past, users were used to "pleasant surprises every now and then", but now they have to accept "waiting for compliance first". This gap is testing users' patience and brand loyalty. Data from a research institution shows that in the first quarter of 2025, the satisfaction index of Chinese new - energy car owners with in - car OTA decreased by 12 percentage points quarter - on - quarter, with "Not meeting expectations" and "Too slow to update" being the main complaints.

It can be seen that the wave of OTA suspension is not only a technical compliance issue but also a fuse for a user trust crisis.

03

OTA Payment Will Become the Future "Hidden Treasure" of Car Manufacturers' Wealth

OTA is no longer simply a "free benefit" but may evolve into part of a long - term service.

As early as when Tesla first applied OTA to cars, it laid the groundwork for future paid OTA upgrades.

In July 2020, Tesla announced an acceleration improvement service for the Model 3 Long Range All - Wheel Drive version. Users could pay 14,100 yuan to reduce the 0 - 100 km/h acceleration time from 4.6 seconds to 4.1 seconds. In September 2020, Tesla announced a rear - seat heating function upgrade service for the Model 3 Standard Range version. Users could pay 2,400 yuan for an online upgrade via OTA.

Looking at the price alone, spending thousands or even tens of thousands of yuan to upgrade a single item seems a bit expensive. But think about it carefully. Spending such an amount, which is far less than the cost of buying a new car with the upgraded item, to enjoy such a considerate and comfortable service, isn't it also worth it?

Currently, paid software has become a new source of revenue for some car manufacturers. Tesla's revenue from paid software services has exceeded 1 billion US dollars. In 2024, Tesla's FSD business recognized revenue of 1.19 billion US dollars, accounting for 1.6% of the total vehicle sales revenue.

Analysts from Morgan Stanley, a globally leading financial services company, believe that Tesla's future revenue from selling software subscription services will exceed that from selling cars. The German consulting firm Berylls once predicted that from 2020 to 2030, the scale of the automotive software market will more than triple, with an average annual growth rate of 13%. The market scale will increase from 76 billion euros to 252 billion euros.

In recent years, Chinese car manufacturers have also been trying similar models. NIO's "NAD Intelligent Driving Package" is available for monthly subscription, and some advanced functions of BYD's models are gradually moving towards "paid unlocking". Under the strong regulatory framework, car manufacturers will pay more attention to improving the stability and added value of functions rather than simply the update frequency, and at the same time, further increase their revenue. We believe that in the future, OTA is likely to shift from a "surprise factor" to a "long - term service factor".

04

Conclusion

As OTA is brought under supervision, in the future, once the push is interrupted or the promise is not fulfilled, it is more likely to trigger collective complaints and legal lawsuits. This wave of OTA suspension is both a challenge and an opportunity for the industry.

The challenge is that car manufacturers have lost the window for rapid trial - and - error. The R & D and compliance costs will inevitably increase, the rhythm of function launch will be extended, and in the short term, users' sense of "continuous renewal" will be significantly weakened. The opportunity is that strong supervision will force enterprises to conduct more rigorous safety tests and compliance verifications in advance, avoiding problems such as black screens, system crashes, and even safety hazards caused by hasty pushes.

For users, although the short - term experience is limited, in the long run, the software updates of vehicles will be more stable and safer, and the overall trust foundation of the industry is expected to be strengthened. Behind the suspension of OTA, the deeper meaning is that it marks that the regulatory logic of China's intelligent vehicles is shifting from "encouraging innovation" to "prioritizing safety and compliance". It is believed that with the development of technology, China's intelligent vehicles will move towards a new stage in the balance between compliance and innovation.

This article is from the WeChat official account "Youjia", author: Gao Yifei. It is published by 36Kr with authorization.