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14-11-2023 | Automotive Electronics + Software | Infographic | Article

Software-defined Vehicles Determine Corporate Strategy

Author: Christiane Köllner

1:30 min reading time

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For OEMs and suppliers, software-defined vehicles play a key role in their corporate strategy. However, complexity and costs are still obstacles to the scaling of SDVs.

Automotive companies are on their way to a software-defined future, according to a survey of 141 suppliers and OEMs based in the UK, France and Germany conducted by management consultants Deloitte with the support of Clepa, the European Association of Automotive Suppliers. According to the survey, 89 % of respondents confirmed that the transformation to the software-defined vehicle (SDV) plays at least a major role in their overarching corporate strategy. Only 1 % said that the topic was of secondary importance.

SDVs will Prevail in the Medium Term

"Our survey shows that the industry has recognized the opportunities surrounding the software-defined car. SDVs are a prerequisite for autonomous driving and can optimize the powertrain of electric cars. They also enable new revenue streams over the entire life cycle of a vehicle," says Dr. Elmar Pritsch, Partner at Deloitte with global responsibility for automotive software. These include entertainment offers and subscriptions, bookings for safety and performance updates, predictive maintenance, the use of mobility services and over-the-air (OTA) updates.

In addition, 90 % of the company representatives surveyed assume that software-based vehicles will become widely accepted in the next five to ten years. They are investing accordingly: Over half had stated that they would use more than 15 % of their total investment for the development of software-defined vehicles. Furthermore, 50 % of those surveyed said that this business area already accounted for 15 to 30 % of their total turnover.

Complexity and Costs are the Biggest Barriers to Scaling

78 % of respondents cited the development process for SDVs as the biggest cost driver and motive for entering into collaborations. For example, 65 % agreed with the statement that the development of SDVs largely depends on collaboration with other companies, through which the associated costs are shared. 27 % said that it depended entirely on this.

Complexity and cost (60 %) are also cited as the biggest barrier to scaling SDVs, followed by security and privacy (52 %) and lack of political support and planning uncertainty (40 %). AI and machine learning are cited as the most important technologies when it comes to reducing complexity in the current transition to software-defined vehicles.

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