Tesla and other automakers that use Over-the-Air updates to update and improve their vehicles and even solve recalls are expected to save roughly $1.5 billion by 2028, new research from global technology intelligence firm ABI states.
ABI recognized Tesla as the “leader in this space” and notes that the company “has never required an in-person software update” to solve a vehicle recall. Tesla has routinely fixed issues with its cars, remedying everything from faulty rear-view cameras to tail light issues, with OTA updates that are downloadable with an internet connection and applied, in some instances, while drivers are asleep.
The solution helps eliminate the need to visit Service Centers within Tesla’s network, which has helped those technicians focus on things like collision repair or other maintenance that requires more attention than a software update.
General Motors has also adopted the same strategy to solve issues and recalls. The report indicates GM has “virtually recalled 98 percent of affected vehicles since 2021.”
GM’s 2016 recall of 3.6 million cars due to a faulty airbag sensor may have catalyzed the company’s focus on resolving vehicle issues through OTA updates. The company spent millions to fix this issue, and a software update could have saved GM time and money.
OTA updates save companies money by reducing the cost of implementing fixes but can also “heavily mitigate the risk of recalls in other ways,” ABI said.
With automakers adopting a software-based mentality with their new vehicles, their lack of experience is evident as faults in performance are frequent.
Dylan Khoo, Smart Mobility & Automotive Analyst at ABI Research, commented on the matter:
“Vehicle recalls due to faulty software are becoming more common as software grows in complexity and becomes more deeply integrated into safety-critical functions. In 2022, nearly 10 million cars were recalled in the United States due to software-related issues, with nearly half of these requiring the software to be updated by a car dealer. These recalls will continue to become more prevalent as cars transition toward software-defined vehicles (SDVs), so the capability to remotely repair faulty software without the cost or inconvenience to the customer of in-person updates will be essential for OEMs.”
Khoo also stated that the companies adopting software-based fixes for recalls will save half a billion dollars in 2023 alone, and revenues from OTA subscriptions will amount to roughly $100 million.
“To remain competitive, OEMs must embrace OTA software updates and be capable of using them throughout the vehicle,” he added.
Perhaps a step toward more OTA fixes will help update the terminology for recalls, which Tesla CEO Elon Musk has spoken out against in the past.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
In a major development that will inevitably strengthen Tesla’s dominant position in the American EV market, Polestar has been effectively banned from selling new vehicles in the United States, starting with the 2027 model year.
The U.S. Department of Commerce denied Polestar authorization under the Connected Vehicle Rule, which prohibits vehicles containing certain connected technologies (Cellular, Wi-Fi, Bluetooth, etc.) linked to China or Russia due to national security risks, including potential data collection on American drivers.
🚨 A Tesla competitor goes down
Polestar will no longer sell new vehicles in the United States starting with the 2027 model year.
The U.S. Department of Commerce denied the brand authorization under the Connected Vehicle Rule, which restricts the sale of cars with software and… pic.twitter.com/TrwnQeoiES
— TESLARATI (@Teslarati) June 25, 2026
Polestar, which is majority-owned by China’s Geely Holding, could not obtain the required exemption despite producing some models domestically.
Polestar confirmed it will sell off any remaining inventory of the Polestar 3 and Polestar 4 models, while continuing service and warranty support for existing customers. No new models or major refreshes will reach U.S. buyers, and the company is pivoting its growth strategy to Europe, where it already generates the vast majority of its sales.
The outcome removes a direct premium EV competitor that had positioned itself as a stylish, performance-oriented alternative to Tesla’s lineup. The Polestar 2 challenged the Model 3, while the Polestar 3 and 4 targeted segments overlapping with the Model Y and upcoming Tesla offerings. Polestar’s U.S. sales had already been sluggish amid intense competition and slower demand, representing just 6 percent of its global volume in the first quarter of 2026.
While Polestar was not on Tesla’s level in the U.S., it still places a dent in the evergrowing field of Tesla competitors in the country, where it has long dominated EV sales.
Tesla faces none of these hurdles. As a U.S.-founded and U.S.-headquartered company with major manufacturing in Fremont, Austin, and Nevada, Tesla’s vehicles are built with compliant domestic and allied supply chains. Its Full Self-Driving technology, over-the-air software updates, and vertically integrated ecosystem were developed entirely in-house without foreign ownership entanglements that trigger national security reviews, at least in the U.S.
Of course, it did face a similar threat in China a few years back:
Elon Musk responds to reports of Tesla ban among China’s military over security concerns
The Connected Vehicle Rule, first advanced under the prior administration and upheld under the current one, is part of a broader U.S. effort to protect the domestic auto industry and critical technology from Chinese influence. High tariffs on Chinese-made EVs and related restrictions have already reshaped the market. Tesla benefits directly: it avoids these barriers while continuing to lead in U.S. EV sales volume, Supercharger network expansion, and energy storage integration.
By clearing Polestar from the new-vehicle playing field, the policy reduces competitive pressure in the premium and performance EV segments where Tesla has invested billions. American consumers seeking cutting-edge electric vehicles now have one fewer option tied to foreign adversaries — and one clearer path to the market leader that has driven the EV transition from the start.
For Tesla, this is more than regulatory relief. It is a strategic tailwind that reinforces its position as America’s premier EV innovator at a time when domestic manufacturing and technological independence matter most.
Tesla Cybercab stands to gain from new rules that the Trump Administration is aiming to enforce on autonomous vehicles. On Thursday, NHTSA, under the Trump Administration’s U.S. Department of Transportation, commenced rulemaking on the Federal Motor Vehicle Safety Standards (FMVSS).
This effort aims to eliminate the mandate for manual brake pedals in vehicles that are designed to be driven exclusively by automated driving systems. This would impact the Tesla Cybercab, which the company has stated would operate without a steering wheel or pedals.
Tesla Cybercab launch is imminent after latest sighting at Giga Texas
The Trump Administration is looking to revise FMVSS No. 135, which requires standard braking systems on light-duty vehicles.
Currently, the regulation requires light-duty cars to use traditional manual braking systems that allow operators to slow the vehicle. With the advent of self-driving in the U.S., these regulations need updating, and these are the changes that could come to FMVSS No. 135:
- Removes requirements for hand- or foot-operated brake controls for vehicles designed never to be operated by a human. Existing rules still apply to AVs that retain manual controls.
- All subject vehicles must still meet the same stopping distance performance criteria via alternative testing procedures.
- While this update ensures AVs can physically stop when commanded, NHTSA is separately developing safety performance requirements for AVs in real-world driving scenarios.
- NHTSA will continue to use its broad defect enforcement authority to investigate unsafe ADS behavior and oversee recalls.
As autonomy becomes a greater part of passenger travel, these types of rule adjustments will be more than reasonable. It will give manufacturers the ability to self-certify their vehicles and avoid any red tape that could ultimately delay the deployment of these vehicles.
Administrators are also incredibly excited about the opportunity to play a role in the advancement of self-driving vehicles.
“We are at the cusp of the greatest technological revolution in vehicle technology since the innovation of the Model T,” NHTSA Administrator Jonathan Morrison said. “If we want America to lead the way, we have to reimagine our regulatory framework. That’s why under Secretary Sean Duffy’s AV Framework, NHTSA is tearing down pointless barriers to innovative designs while strengthening the fundamental safety requirements that matter and holding AV developers accountable for safe performance.”
The Cybercab entered mass production at Gigafactory Texas in April. Tesla ultimately plans to push the vehicle into its Robotaxi fleet, potentially when frameworks like these are established.
Tesla plans to boost production at its Gigafactory Berlin plant in Germany following a sharp rebound in sales and demand in Europe after a softer 2025.
The plans put Tesla in a better position to compete with strengthening companies in Europe and potentially other markets; demand indicators show Tesla is much better off than in 2025.
Last year was a tough year for Tesla in terms of overall demand in Europe. The company produced over 200,000 vehicles at the German plant last year, a soft figure compared to the 375,000 vehicles Tesla lists as its current capacity at the factory.
🚨 Tesla said this morning it will ramp up production at Gigafactory Berlin to a volume of 7,500 vehicles per week.
This is a 20 percent boost in production. Tesla will hire 1,000 new employees to help with the increase.$TSLA pic.twitter.com/kravKfRO5n
— TESLARATI (@Teslarati) June 25, 2026
Tesla’s overall European sales dropped significantly last year due to a variety of factors. However, sales are rebounding, and demand is strong once again, and only getting stronger. Tesla is now planning to bump production of Model Y vehicles at Giga Berlin upward by about 20 percent. It will also bring 1,000 new jobs to the plant.
Tesla confirmed the details of its planned production expansion in Germany this morning. It is a strategy to keep up with strengthening demand.
In Q1, Tesla saw a record 61,000 vehicles produced at Giga Berlin. European registrations rebounded sharply, with Model Y seeing 117 percent increases in March 2026 compared to last year. Germany alone saw stark increases, with a quadrupling in registrations to 9,252 units.
This trend continued in other key European markets, including France, Denmark and Sweden. Tesla registrations were up over 46 percent in some of these markets, and Model Y continued its trend as a top BEV in the market.
Demand has been recovering strongly in 2026, giving Tesla a reason to expand production efforts at the factory. These increases signal management’s confidence in sustained or growing European pull for Berlin-built vehicles.
One of Tesla’s biggest threats just got banned in the U.S.
Tesla Cybercab stands to gain from new Trump autonomy rules
