The Countdown to Software-Defined Vehicles

Following a period of high anticipation and ambitious predictions for software-defined vehicles, the industry now is recalibrating its expectations. This shift stems from the recognition of the extensive complexity surrounding this transformation, especially for traditional automakers entrenched in legacy practices.

Unsurprisingly, a survey of global automotive executives conducted by chipmaker NXP Semiconductors and Wards Intelligence finds that nearly 60% of the industry believe it will be beyond 2030 before more than half of the new vehicles sold annually in mature markets are software-defined.

Optimism appears higher among respondents based in Europe and within Tier 1 and Tier 2 suppliers, with 79% and 68%, respectively, projecting this shift by 2031. In contrast, 47% of North American counterparts foresee the transition occurring from 2032 onward. Interestingly, a substantial 27% of OEM respondents are uncertain about the timeline for SDV series production.

Looking more specifically at the isolated completion of the various SDV elements, respondents are skeptical any key steps will be achieved before 2024. Mature over-the-air (OTA) update capabilities (59%), the automotive software stack (60%) and integrated vehicle data infrastructure (58%) are slated for finalization between 2025 and 2030, according to those surveyed.

Conversely, scaling an optimal E/E architecture and Ethernet backbone across the vehicle fleet (59%), digital twins (57%), DevOps cloud flow (Continuous Integration/Continuous Deployment) (50%) and automated software certification (56%) are estimated to be completed beginning in 2028.

This division in expectations aligns with the development stages within OEMs.

OTA capabilities and integrated vehicle data infrastructure pertain to data management and analysis capabilities OEMs have pursued ever since embedded connectivity became prevalent in vehicles. Consequently, these are already at a more advanced stage of development, with 62% of respondents expecting these steps to be completed between 2025 and 2027.

The challenges faced by OEMs in deploying OTA updates and upgrades in existing platforms, mainly due to legacy electrical/electronic architecture, monolithic software and limited control over the supply chain (as electronic control units are often vertically designed by Tier 1 suppliers), have driven OEMs to move toward the development of their own automotive software stacks.

While OEMs are adopting diverse approaches to platform development and are at varying stages of progress, this technology is well under way for many, with 60% of respondents anticipating its completion between 2025-2027 (27%) and 2028-2030 (32%).

The subsequent SDV elements slated for implementation in the upcoming decade encompass advanced and intricate technologies, which are new for most OEMs, requiring additional time, experience and expertise before they can enter series production. These entail sophisticated cloud-based software development technologies such as digital twins and virtual software development environments, as well as comprehensive overhauls in organizational processes (e.g., DevOps).

Automated software certification stands out as one of the most complex tasks within the SDV landscape, presenting challenges for all OEMs, not solely for incumbent players. The survey shows that 38% of OEM respondents and 29% of all respondents foresee its implementation beyond 2031. Noteworthy is that a significant 33% of OEM respondents and 24% of North America-based experts express uncertainty about achieving this step, while 8% of all respondents doubt that OEMs will reach this stage at all. There is also substantial uncertainty among OEM respondents regarding the implementation of digital twins (33%) and, notably, the adoption of DevOps and CI/CD (43%). 

While not directly linked to advanced software-development capabilities, the scaling of an optimal E/E architecture and Ethernet backbone across the entire vehicle fleet is expected post-2031 by 29% of respondents. This somewhat pessimistic outlook likely stems from the challenge of cost optimization, particularly for OEMs managing extensive vehicle portfolios ranging from premium to entry-level vehicles. This challenge has been identified as one of the top three hurdles for SDV implementation by 48% of all respondents.

Overall, respondents in Europe exhibit more optimism regarding the completion of virtual development environments and DevOps cloud flow (CI/CD) by 2030, selected by 79% and 64% of respondents, respectively. This aligns with the higher emphasis on software in the European market, as revealed by the survey.

However, this outlook, with recalibrated expectations, isn’t matched among respondents based in Asia-Pacific, where industry insiders anticipate the completion of all SDV elements within this decade. This could be attributed to the advanced stages achieved by BEV disruptors from China.

The full report on the NXP Semiconductors-Wards Intelligence survey, “Unveiling Tomorrow’s Ride: A Deep Dive Into Software-Defined Vehicles,” is available HERE.