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From horsepower to computing power - The new software vehicle age

From horsepower to computing power - The new software vehicle age

Publication Date: 08/12/2021
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This presentation-based brief report illustrated the growing importance of software in the automotive industry and highlights OEMs’ strategic vision and business models related to digital services.

Software is becoming a strategically important pillar for OEMs and suppliers, which is supported by their intention towards software research. OEMs are racing to reach a leading position within the in-vehicle software industry to meet customers’ needs for individual, sustainable, and fully connected mobility. To that end, they are doubling their digitalization and software spending.

From a technology development point of view, there is a growing trend towards consolidation both in terms of hardware in the short and medium term, and then software in the longer-term. Migration between distributed systems to the domain-based system and then in the longer term to a centralized control system is a common policy amongst OEMs.

The success of this new system architecture depends on the smooth integration of the middleware software platform that manages system integration. Middleware or platform in the middle facilitates innovative vehicle functions that are always state-of-the-art and are growing at a rate of 27%, especially with autonomy functions. Here, standardizing interfaces improves communication with all parts of the system and can help reduce the complexity of system integration for OEMs and improve cost efficiencies.

OEMs are also investigating how to make money out of digital services, especially with subscription-based features and or on-demand functions. It is fair to say that we may see fewer dealer fitment options and/or accessory fitment options in future model year vehicles.

We may still see a few hardware items in dealer-fitted scenarios like alloys or floor mats, but all other functions that have a touch of software will move to the new business model. With CICD (continuous improvements and development), the vehicle will get regularly improve as it is matures over a lifetime, while consumers can enjoy fresh content.

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