software defined vehicles

Software-defined vehicles (SDVs) are becoming the industry standard in the automotive space. As the vehicles people utilize daily evolve from mechanical marvels to digital powerhouses, the software aspect has become increasingly prominent launching transportation into the future. While these new developments provide reason to be excited, a major mindset shift is necessary to get the full potential out of SDVs from a manufacturer’s perspective.

A software-defined vehicle refers to a vehicle whose features and functions are primarily driven by software. This shift represents the transformation of automobiles from mainly hardware-based products to software-centric electronic devices on wheels. In an SDV, much of the vehicle's functionality, such as advanced driver assistance systems (ADAS), infotainment, connectivity, and vehicle diagnostics, is enabled and managed through sophisticated software systems.

The Evolution of Automotive Technology 

For nearly a century, cars were purely mechanical. The late 1970s saw the advent of small computers in vehicles, paving the way for electronic and electric (EE) architecture. Today, we are transitioning into the era of SDVs, where cars function more like powerful computers with integrated features rather than a collection of dedicated, distributed systems.

SDVs represent a paradigm shift. Unlike traditional vehicles with specific functionalities managed by separate computers, SDVs integrate various features into a cohesive system. This allows for continuous updates and improvements, similarly to how a smartphone operates. The concept of a "smartphone on wheels" is becoming a reality, but with the added complexity of ensuring functional safety in a highly dynamic environment.

Business Mindset Transformation 

The need for a fundamental shift in business strategies to embrace SDVs is imperative. Traditional automotive business models relied on long product cycles with minimal changes. SDVs, however, require a continuous evolution of features and capabilities. Previously, once an ECU went into production, the performance and technology was frozen for 3-6 years meaning the chipset and software would become obsolete quickly.  With SDV, a company that is continuously innovating can now get their innovations into the car and stay further ahead of the competition. This shift not only opens new revenue streams but also demands a rethinking of how companies manage engineering, development, and market strategies.

Transitioning to SDVs brings its own set of challenges and opportunities. For original equipment manufacturers (OEMs), this means adapting to a new business reality where competition is constant and innovation is rapid. For suppliers, the integration of diverse functionalities into a unified system requires new skill sets and collaborative approaches. Adjusting to this transformation is key to staying on pace with competitors.

According to a research article by Global Market Insights, the market for software-defined vehicles was worth $35.8 billion in 2022 and is expected to grow by 22.1% each year from 2023 to 2032. This growth is driven by several factors, including the potential for greater safety features, remote software updates, zero emission, and autonomous driving.

Consumer Benefits 

SDVs offer numerous benefits to consumers, transforming the driving experience and enhancing vehicle functionality. One significant advantage is the ability to receive over-the-air updates, ensuring the vehicle remains current with the latest features and safety improvements without needing physical modifications. This capability allows for the continuous enhancement of performance, convenience, and safety features. Additionally, SDVs can offer personalized settings, automatically adjusting seats, mirrors, lighting, and climate control based on the driver's preferences. Advanced software also improves vehicle diagnostics and predictive maintenance, reducing downtime and repair costs. SDVs can also integrate seamlessly with smart home systems and mobile devices, providing a more connected and efficient lifestyle. Overall, SDVs bring increased convenience, safety, and personalization to modern driving.

Privacy and Collaboration 

Privacy and collaboration are crucial in the development of SDVs. As these vehicles become more integrated with digital technologies, they collect and transmit vast amounts of data. Ensuring this data remains private and secure is essential to maintaining consumer trust and complying with regulatory standards. At the same time, collaboration among automakers, technology providers, and regulatory bodies is vital for the advancement of SDVs. Open collaboration allows for the sharing of innovations and best practices, fostering faster development and implementation of new features while ensuring compatibility and safety across the industry. Balancing privacy with collaborative efforts can accelerate technological advancements in SDVs while protecting consumers' rights and data.


The rise of software-defined vehicles (SDVs) marks a significant milestone in the evolution of automotive technology. Transitioning from mechanical to digital powerhouses, SDVs offer a host of benefits, including enhanced safety, personalized features, and seamless integration with modern digital ecosystems. However, to fully realize the potential of SDVs, a substantial shift in business strategies and engineering practices is essential. Embracing continuous updates, fostering open collaboration, and ensuring data privacy will be crucial in driving this transformation. As the market for SDVs continues to expand, with projected significant growth in the coming years, both manufacturers and consumers stand to gain from this innovative leap. Ultimately, SDVs promise to deliver a safer, more efficient, and highly personalized driving experience, heralding a new era of smart mobility.

To discover more about software-defined vehicles, visit

Watch our recent LinkedIn Live, “Accelerating Auto Innovation: Streamline & Scale in the SDV Era” recording here

Author FPT Software