The Future of Autonomous Vehicles: How SDVs (Software Defined Vehicles) Are Revolutionizing the Automotive Industry Part (1/2)

For a basic understanding of SDVs (Software Defined Vehicles), please refer to the following address.

https://simcrys.com/revolutionizing-mobility-the-dawn-of-self-defined-vehicles-sdvs/

This post is structured as follows:

1. The Emergence of SDV
   • Difference from traditional vehicles
2. Core Technologies of SDV
   • SDV Core Technologies and development
   • The role of SDV in the automotive industry

The next post will cover:

3. Manufacturers’ Strategy Shift
   • New business models and partnership opportunities
   • Changes in the competitive landscape and new entrants
   • Social and economic impacts of SDVs
   • Challenges and future outlook
4. Conclusion
   • Implications

1. The Emergence of SDV

According to Continental*, SDV represents the next evolutionary step in vehicle development, emphasizing that modern vehicles are equipped with up to 150 million lines of code and more than 100 control units. This highlights the revolution that software, cloud, and service-oriented vehicle architecture are bringing to vehicle structures.

*https://www.continental.com/en/products-and-innovation/innovation/sdv/

Aptiv* describes SDV as vehicles primarily enabled through software, explaining this as the result of a continuous process where cars are transitioning from primarily hardware-based products to software-centric electronic devices. It emphasizes how the three powerful trends of electrification, automation, and connectivity are reshaping customer expectations and forcing manufacturers to increasingly rely on software to meet these expectations. In particular, it mentions that software-defined vehicles offer many benefits beyond unlocking new safety, comfort, and convenience features.

*https://www.aptiv.com/en/insights/article/what-is-a-software-defined-vehicle

Thus, automotive OEMs are approaching customers in new ways. Rather than ending with the sale and maintenance services of internal combustion engine vehicles, they provide new experiences to customers by updating vehicles through software. The development of SDVs represents a key technology that transforms cars from mere means of transportation into mobility that can offer new experiences.

2. Core Technologies of SDV

2-1 Software-centric Vehicle Design and Development

Deloitte* emphasizes that SDV is shifting the automotive industry from a traditional mechanical and electrical engineering focus to a software-centric one, centered around user experience, digital customization, and infinite ecosystem integration.

*https://www.deloitte.com/global/en/Industries/consumer/analysis/the-software-defined-vehicle-revolution.html

Going forward, vehicle development is likely to be software-centric. While customerss typically purchase a new vehicle every 5-7 years, the emergence of software updates could significantly change this cycle. In the future, it appears that software updates, rather than manual repairs, will resolve issues with one’s vehicle.

2-2 The Role of SDV in the Automotive Industry

BCG* explains that as cars transform from analog machines to software-defined vehicles (SDVs), the boundaries between the automotive and technology industries are blurring. SDVs can bring benefits to individuals and society at large, with autonomous driving (AD) functions potentially reducing traffic fatality rates by up to 90% and providing independent mobility for people with disabilities. Moreover, SDVs allow for experiencing innovation through software updates that manage, maintain, and improve vehicles daily, enabling new features to be enjoyed.

https://www.bcg.com/publications/2023/rewriting-rules-of-software-defined-vehicles

Therefore, the role of SDV within the automotive industry is becoming increasingly important. Software updates that provide customer service can save OEMs labor and material costs, addressing vehicle accident rates, societal benefits, and vehicle management, maintenance, and improvement. According to IDTechEx*, Tesla could have faced billions of dollars in costs due to a recent recall, but instead, a wireless software update was all that was needed to address the issue affecting over two million vehicles.

*https://www.idtechex.com/en/research-article/teslas-major-recall-shows-the-benefits-of-software-defined-vehicles/30355

3. Implications  

I anticipate that SDVs will significantly change the structure of the automotive industry, extending it from a manufacturing-based industry to the IT domain. Through SDVs, new automotive manufacturers will not only serve as means of transportation but also as a foundation for expanding into new areas. Entertainment, gaming, music, and automotive spaces will play a vital role beyond transportation, becoming a crucial strategy for OEMs. The next article will focus on manufacturers’ strategy changes and the ultimate goals of SDVs.