Software-Defined Vehicle Market - By Vehicle Type (Passenger Cars, Commercial Vehicles), By Propulsion Type (ICE, Electric Vehicle), By Level of Autonomy (Level 1, Level 2, Level 3, Level 4), By Offering, By Application, Forecast 2023 – 2032

Software-defined Vehicle  Market Size

Software-Defined Vehicle Market size was valued at USD 35.8 billion in 2022 and is anticipated to register a CAGR of 22.1% between 2023 and 2032. Enhanced safety and sustainability are driving the software-defined vehicle industry growth by offering real-time monitoring, predictive analytics, and autonomous driving capabilities. Advanced software enables immediate response to potential accidents, reducing collision rates. Additionally, data-driven insights promote eco-friendly driving behaviors, enhancing sustainability. Software-defined vehicles also enable over-the-air updates, ensuring vehicles stay up to date with the latest safety features, reducing the need for new physical components, and contributing to a greener environment.
 

The automotive over-the-air (OTA) system is propelling the software-defined vehicle market growth by ensuring continuous improvements and adaptability. Automotive OTA enables seamless software updates, enhancing vehicle functionalities, safety features, and user experiences remotely. This capability also facilitates the integration of cutting-edge technologies such as autonomous driving and advanced driver-assistance systems. Manufacturers can swiftly address security vulnerabilities and bugs, thus ensuring that vehicles are always up to date. Consequently, automotive OTA empowers software-defined vehicles to evolve, enhancing market competitiveness and customer satisfaction.
 

The integration of diverse software systems in software-defined vehicles can be challenging due to interoperability issues. Different components and applications from various vendors must seamlessly work together, ensuring a cohesive user experience. Interoperability problems may lead to software glitches, reduced system efficiency, and compromised safety features. To mitigate these challenges, industry standards and protocols need consistent development, enabling smooth communication between different software modules and ensuring that they function harmoniously within the vehicle's complex ecosystem.
 

COVID-19 Impact

The COVID-19 pandemic negatively impacted the software-defined vehicle market. Disruptions in the global supply chain, factory closures, and reduced consumer spending have hampered production & sales. Automotive companies faced challenges in sourcing necessary components, leading to delays in software-defined vehicle development. Consumer demand also declined as economic uncertainties grew, affecting new vehicle purchases. Uncertain market conditions have slowed down investments in research and development, hindering the advancement of software-defined vehicle technologies.
 

Software-Defined Vehicle Market Trends

The collaborative development of autonomous cars is fostering growth in the software-defined vehicle industry. Partnerships between technology companies, automotive manufacturers, and research institutions allow for shared expertise & resources, expediting the advancement of autonomous driving technologies. For instance, in May 2023, Tata Technologies and TIHAN IIT Hyderabad entered a Memorandum of Understanding (MoU) to partner on platform and Proof of Concept (POC) development in Software Defined Vehicles (SDV) & Advanced Driver Assistance Systems (ADAS). Their collaboration aims to discover inventive solutions, accelerating the development of autonomous vehicles, cutting down incubation time, and decreasing costs.
 

Software-Defined Vehicle Market Analysis

Based on vehicle type, the software-defined vehicle market is divided into passenger cars and commercial vehicles. The passenger cars segment accounted for a market share of over 80% in 2022. Vehicle manufacturers pioneering in Software-defined vehicles (SDV) without the need for hardware modifications are propelling the growth of passenger cars segment. This innovation allows passenger cars to continuously adapt and integrate new features without altering their physical components. For instance, in May 2023, Renault Group and Valeo collaborated to enhance the electrical and electronic architecture of Renault's upcoming vehicles. The partnership focuses on developing Software-Defined Vehicle (SDV) architecture, thus ensuring seamless integration of new functionalities without the requirement of hardware modifications over their lifespan.
 

Based on application, the software-defined vehicle market is categorized into infotainment systems, advanced driver assistance systems (ADAS), autonomous driving, telematics, powertrain control, and others. The advanced driver assistance systems (ADAS) segment held a market share of around 29% in 2022. Advanced driver assistance systems (ADAS) are witnessing growth primarily due to their significant contributions to safety. These systems including features such as adaptive cruise control, lane-keeping assistance & automatic emergency braking substantially enhance vehicle safety by providing real-time assistance and reducing the risk of accidents. As consumers increasingly prioritize safety, automakers are integrating ADAS into their vehicles to meet this demand, leading to the widespread adoption of these advanced technologies in the automotive industry.
 

North America led the global market with a major share of over 30% in 2022. The surge in software-defined vehicle innovations in the U.S. is driving substantial growth in the North America software-defined vehicle market. Companies are pioneering cutting-edge technologies including automotive OTA updates & Advanced Driver Assistance Systems (ADAS), enhancing vehicle functionalities and safety. This innovation is attracting significant investments, both from within the U.S. and internationally, positioning North America as a key hub for software-defined vehicle development. The market's dynamism and innovation are propelling its expansion and influencing global trends in automotive technology.
 

Software-defined Vehicle Market Share

Major players operating in the software-defined vehicle market are:

• Aptiv PLC
• Continental
• Mobileye
• NVIDIA Corporation
• Robert Bosch GmbH
• Tesla Inc.
• Waymo LLC

Tesla Inc. and NVIDIA corporation are major market player in the market. Tesla Inc. develops a significant portion of its vehicle software and hardware in-house. This level of control allows the company to rapidly innovate and tailor its software-defined vehicle systems to its specific needs and goals. NVIDIA offers the NVIDIA DRIVE platform, which is a comprehensive hardware and software solution specifically designed for autonomous vehicles. This platform includes powerful GPUs, hardware accelerators, software development kits (SDKs), and libraries for autonomous driving development.
 

Software-defined Vehicle Industry News

• In August 2023, Sibros, a company specializing in connected vehicle platforms, partnered with iWave Systems, a prominent provider of embedded systems & Original Design Manufacturer (ODM) solutions. This collaboration aims to expedite software-defined vehicle innovation across various vehicle architectures.
   

The software-defined vehicle market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments:

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By Vehicle Type

• Passenger Cars
• Commercial Vehicles

By Propulsion Type

• ICE
• Electric Vehicle

By Level of Autonomy

• Level 1
• Level 2
• Level 3
• Level 4

By Offering

• Software
  • Infotainment & Telematics Software
  • Advanced Driver Assistance Systems (ADAS) Software
  • Autonomous Driving Software
  • Over-the-Air (OTA) Software Update Platforms
  • Cybersecurity Software
  • Connectivity Solutions
  • Others
• Hardware
  • Sensors
  • Computing Hardware
  • Connectivity Modules
  • Others
• Services
  • Integration Services
  • Connectivity Services
  • Others

By Application

• Infotainment Systems
• Advanced Driver Assistance Systems (ADAS)
• Autonomous driving
• Telematics
• Powertrain control
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Netherlands
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa