Software-Defined Vehicle Market Size - By Vehicle, By Propulsion, By Level of Autonomy, By Offering and By Application, Growth Forecast, 2025 – 2034

Software-Defined Vehicle Market Size

The global software-defined vehicle market size was valued at USD 49.3 billion in 2024 and is estimated to register a CAGR of 25.2% between 2025 and 2034. Software-defined vehicles (SDVs) are increasingly equipped with advanced safety features powered by sophisticated software. These include real-time vehicle performance monitoring, advanced driver assistance systems (ADAS) such as lane-keeping assist, emergency braking, collision detection, and other proactive safety mechanisms.  
 

According to survey conducted by HERE Technologies titled ‘Safer cars, safer roads’, in November 2023 showed that over 90% of respondents in India believed ADAS is important for road and driver safety. Furthermore, the global ADAS market is projected to grow from USD 38.1 billion in 2023 to USD 150.2 billion by 2032, with a growth rate of over 17%.
 

The automotive over-the-air (OTA) system is propelling the software-defined vehicle market growth by allowing continuous improvements and adaptability. Automotive OTA enables manufacturers to update software remotely, improving vehicle functions, safety, and user experience. This helps integrate new 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. As a result, automotive OTA helps software-defined vehicles stay competitive and increases customer satisfaction.
 

Furthermore, SDVs also allow for quick updates of security patches to address vulnerabilities, ensuring that vehicles stay protected from cyber threats. This ability to continuously update safety and security features is increasing the demand for SDVs, as automakers aim to meet higher consumer expectations and regulatory standards.
 

Software-Defined Vehicle Market Trends

The market is witnessing a shift towards autonomous driving which depends on advanced software, data processing and AI integration. SDVs allow for continuous updates and upgrades to their systems, enhancing capabilities such as object detection, navigation, and decision-making. As self-driving technology advances, SDVs enable automakers to add new features and functionalities via over-the-air (OTA) software updates, making them crucial for the development and deployment of autonomous driving solutions.
 

Companies are launching specialized software-defined vehicle academies. For instance, in August 2024, Accenture launched a global Software-Defined Vehicle (SDV) Academy, as part of its Accenture LearnVantage business. The SDV Academy offers training modules for automotive companies to build skills for software-defined, service-driven digital mobility.  The academy is created by Accenture's industrial automation experts and ecosystem partners, the academy includes over 40 modules, an interactive sandbox for hands-on learning, and expert coaching in key areas like AUTomotive Open System ARchitecture (AUTOSAR) and Functional Safety. AI-driven personalized learning paths ensure participants receive customized training that combines practical skills and knowledge.
 

The collaborative development of autonomous cars is fostering growth in the software-defined vehicle market. 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.
 

Integrating different software systems in software-defined vehicles is challenging due to interoperability issues. Components and applications from various vendors must work together seamlessly to ensure a smooth user experience. Interoperability problems cause software glitches, reduced system efficiency, and compromised safety features. To solve these issues, the industry needs to develop consistent standards and protocols. This will enable smooth communication between software modules, ensuring they work well together within the vehicle's complex system.
 

Software-Defined Vehicle Market Analysis

Based on vehicle type, the market is segmented into passenger cars and commercial vehicles. The passenger cars segment accounted for a market share of over 80% in 2024 and is expected to cross USD 300 billion by 2032. Consumers are increasingly seeking advanced in-car experiences, driving the adoption of SDVs in passenger cars. Modern vehicles now commonly feature integrated infotainment systems, voice recognition, and seamless smartphone connectivity. This trend is leading automakers to invest in software-focused platforms.
 

Additionally, passenger car manufacturers are providing OTA updates to enhance vehicle performance, add new features, and fix bugs. These updates improve customer satisfaction and reduce the need for physical service visits, making SDVs more attractive in the passenger car market.
 

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 36% in 2024.  The demand for enhanced safety features, driven by consumer awareness and regulatory requirements, is boosting the adoption of ADAS in software-defined vehicles. These systems rely heavily on software to deliver functionalities like lane-keeping assistance, collision avoidance, and adaptive cruise control.
 

Furthermore, the increasing deployment of Level 2 and Level 3 autonomous systems requires standard software for real-time data processing and decision-making, driving the SDV market growth in the ADAS segment.
 

North America software-defined vehicle market accounted for 30% of the revenue share in 2024. North America, particularly the U.S. has presence of leading technology and automotive companies such as Tesla, GM, and Google’s Waymo, leading the development of software-defined vehicles. This tech innovation drives SDV adoption in the region.
 

The U.S. government’s support for autonomous vehicle testing and development, through initiatives such as the Autonomous Vehicle Innovation Act, is further fueling the growth of SDVs in the region. States including California and Arizona have set up regulations to help autonomous vehicle testing, promoting the development of software-driven automotive technologies.
 

The Asia Pacific region, especially China, is witnessing a surge in demand for smart mobility and connected car technologies due to rapid urbanization and increasing traffic congestion. SDVs enable smart transportation solutions, driving market growth. Countries including India, Indonesia, and Thailand are investing in electric vehicle EV infrastructure, which is accelerating the adoption of software-defined vehicles. These countries are building extensive charging networks, smart grids, and supportive policies to increase EV use. Integrating software-defined platforms in EVs is key for optimizing charging, energy management, and enhancing user experience with connected features.
 

Europe's stringent emissions regulations including Euro 7 standards and safety requirements are driving automakers to adopt SDVs for compliance. Software-defined platforms allow for real-time adjustments to vehicle performance and emissions. The European Commission’s target to cut CO2 emissions from new cars by 55% by 2030 is speeding up the shift the transition to software-defined electric vehicles. Additionally, European countries are heavily investing in connected and autonomous vehicle infrastructure, which is important for the growth of SDVs. Projects such as the UK’s Connected and Automated Mobilit initiative are setting the stage for widespread adoption of software-centric vehicles.
 

Software-Defined Vehicle Market Share

Tesla Inc. and Robert Bosch hold a market share of over 5% in the software-defined vehicle industry.  Tesla develops its software in-house, covering everything from the vehicle's operating system to advanced driver-assistance systems (ADAS). This control allows the company to release OTA updates to improve performance, add features, and fix bugs without physical recalls. This approach boosts customer satisfaction and cuts costs, giving the company a competitive edge in the market.
 

Robert Bosch focuses on creating integrated software platforms like the Vehicle Control Unit (VCU) and Bosch Automotive Cloud Suite. These platforms integrate ADAS, infotainment, and connectivity features, helping automakers develop scalable and modular SDVs. By offering customizable software, Bosch accelerates SDV development and strengthens its position in the automotive software supply chain.
 

Software-Defined Vehicle Market Companies

Major players operating in the software-defined vehicle industry include:

• Aptiv
• Continental
• Ford
• General Motors
• Marelli Holdings
• Mercedes-Benz
• Nvidia
• Robert
• Tesla
• Volkswagen
   

Software-Defined Vehicle Industry News

• In November 2024, Panasonic Automotive Systems Co., Ltd. partnered with Arm to standardize automotive architecture for Software-Defined Vehicles (SDVs). This new partnership will use and expand VirtIO device virtualization framework to separate automotive software development from hardware, speeding up development cycles in the automotive industry.
   
• In October 2024, Hyundai Motor Co., Kia Corp. and Samsung Electronics have announced a strategic partnership to link software-defined vehicles to smartphones, creating new mobility experiences for customers.  These companies will work with Hyundai’s global software center, 42dot, to develop a next-generation open infotainment system and mobility ecosystem. The goal is to create a user-centered vehicle environment. Hyundai and Kia plan to build a software development kit and share vehicle data APIs with business partners, allowing developers to create in-vehicle features that will run on Samsung’s "SmartThings" platform.
   

The software-defined vehicle market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Vehicle

• Passenger cars
  • Sedan
  • SUV
  • Hatchback
  • Others
• Commercial vehicles
  • Light Commercial Vehicle (LCV)
  • Heavy Commercial Vehicle (HCV)

Market, By Propulsion

• ICE
• Electric
• Hybrid

Market, By Level of Autonomy

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

Merket, By Offering

• Software
  • Infotainment & telematics software
  • Advanced Driver Assistance Systems (ADAS) software
  • Autonomous driving software
  • Over-the-Air (OTA) software ipdate platforms
  • Cybersecurity software
  • Connectivity solutions
  • Others
• Hardware
  • Sensors
  • Computing hardware
  • Connectivity modules
  • Others
• Services
  • Integration services
  • Connectivity services
  • Others

Market, 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
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina 
• MEA
  • UAE
  • South Africa
  • Saudi Arabia