SDV Market Tracker: 2024 Analysis

Software-defined vehicles (SDVs) are a prominent topic in the automotive industry, with nearly all automakers defining and pursuing ambitious SDV roadmaps. However, as the transition to SDVs – and even the concept itself – is still in its early stages, there is limited clarity on their definition and even greater challenges in measuring adoption.

To address this, Wards Intelligence has introduced its newly published SDV Market Tracker. The report offers a clear definition of SDVs, drawing from Wards Intelligence’s extensive SDV research portfolio, including industry surveys and scorecards, and also delivers a global 12-year forecast of SDV sales with high-level granularity.

According to Wards Intelligence, the term “software-defined vehicle” refers to the broader digital transformation of the automotive industry. It encompasses not only advancements in vehicle platforms – such as consolidated Electrical/Electronic (E/E) architectures and the decoupling of hardware and software – but also fundamental changes to automakers’ organizational processes, structures, culture and supplier relationships.

Applying this definition, the tracker reveals that SDVs accounted for 3% of all new vehicles sold globally in 2023, with this share projected to grow to 3.87% in 2024. Tesla’s Model Y and Model 3 were the top-selling SDV models in 2023 and are expected to maintain their leadership in 2024. Disruptor OEMs, who pioneered the SDV concept, have dominated the market so far, and Wards Intelligence predicts this dominance will continue through at least the mid-2030s.

From a country-of-origin perspective, U.S. OEMs, driven primarily by Tesla, captured a dominant 71% share of the global SDV market in 2023. However, Wards Intelligence projects that APAC OEMs, particularly those based in China, will surpass U.S. automakers and maintain leadership in the SDV market through at least 2036. European OEMs are anticipated to show increased global competitiveness beginning in 2026. In terms of regional sales, APAC is forecasted to account for over 50% of global SDV sales in 2024.

When it comes to SDV Electrical/Electronic (E/E) architecture, the report highlights significant differences in strategies between disruptors and incumbent OEMs. Disruptor OEMs are gradually advancing their architectures, reflecting a measured learning curve. In contrast, incumbent OEMs are attempting to leapfrog directly from distributed systems to zonal architectures, bypassing intermediate steps entirely.During the transition to full electrification, SDVs with other powertrains, such as hybrids, are expected to emerge, albeit on a smaller scale. However, setbacks in electrification have undeniably posed significant challenges to the SDV transition, particularly for incumbent automakers.