Software-defined vehicles: Moving digitalization into the fast lane

Automotive companies are increasing their R&D spending to reach a leading position in software. The key focus remains autonomy application development and testing, cybersecurity software, and middleware development. Growth in intelligent software such as Artificial Intelligence (AI)-based Infotainment Headunit solutions and Cybersecurity client software is an outcome of increased software spending. However, market data clearly shows that spending is not uniform across vehicle propulsion systems. For example, EV and Hybrid propulsion platforms are witnessing more innovations compared to others. Software investments are primarily gearing up to support future Software-Defined Vehicles business models. This results in an evolving development scenario that prioritizes competencies and capacity building by automakers.

With harmonized vehicle abstraction and independent software life cycles, automakers are aiming to increase economies of scale and feature development scope. The success of this development depends on middleware integration, API rollout, and a secure hardware and software separation layer. The industry is witnessing a significant growth in middleware and AUTOSAR spending and revenue. Furthermore, automakers are reinventing the prevailing business model, adopting subscription-based and on-demand features.