Summary

The Software Defined Vehicle Market size is projected to grow from USD 213.5 billion in 2024 to USD 1,237.6 billion by 2030, at a CAGR of 34.0%. SDVs are becoming increasingly popular due to various factors such as Consumers benefit from a highly personalized driving experience, with settings and preferences customized as per drivers. For OEMs, SDVs open up new revenue streams by allowing them to sell software-based features and services. Moreover, the rise of pay-per-use mobility models offers flexible usage options like car-sharing and subscriptions, catering to modern consumer preferences.

“Zonal Controller Architecture is likely to be the leading segment in the Software Defined Vehicle market by E/E Architecture during the forecast period.”
SDVs come with an array of electronic features developed for improved driving comfort, vehicle safety, and fault detection. SDV providers such as Tesla (US), NIO (China), XPENG (China), ZEEKR (China), and Li Auto Inc. (China) have adopted a software-first approach in which they start with zonal control units to utilize the advanced and integrated software features of SDVs. Legacy OEMs also plan to shift to zonal compute systems with their SDV shift. Volkswagen plans to integrate XPENG’s CES architecture in its vehicles, starting from 2026, which will be equipped with zonal control central computing. Other OEMs such as Hyundai, Mercedes, and BMW also plan to shift to zonal control architecture by 2026-2028, incorporated in their latest vehicle platforms. Zonal controllers allow OEMs to control the whole vehicle through 4-10 HPCs per vehicle and reduce the need for excessive wiring in the vehicles. Thus, the transition to zonal control is seen as a significant step towards fully realizing the potential of SDVs, offering a more streamlined, adaptable, and efficient vehicle architecture.
“Europe shows high growth potential for Software Defined Vehicle market.”
Europe presents a huge growth opportunity for the Software Defined Vehicle market, which is characterized by stringent safety requirements and a need for better user experience. It is home to leading OEMs such as Volkswagen, BMW, Renault, Stellantis, and Mercedes-Benz, which are transitioning toward SDVs. In Europe, OEMs are expanding in the region through strategic partnerships and acquisitions. For instance, in February 2023, CARIAD GmbH acquired Hexad GmbH's Mobility Services Platform unit which enhanced its cloud service capabilities for Volkswagen Group's digital automotive ecosystem. This acquisition integrated over 75 Hexad developers into CARIAD which strengthened its software development for improved digital services across Group brands. Also, in March 2024, Volkswagen Group plans to utilize its 23 regional plants to support the development and production of SDVs in Europe.
In-depth interviews were conducted with CEOs, marketing directors, other innovation and technology directors, and executives from various key organizations operating in the SDV market. The break-up of the primaries is as follows:
• By Company Type: Tier I – 42%, Tier II – 40%, and OEM –18%,
• By Designation: C-level Executives– 57%, Directors – 29%, and Executives – 14%
• By Region: North America – 39%, Europe – 33%, and Asia Pacific – 28%

The Software Defined Vehicle market comprises major manufacturers such as Tesla (US), Li Auto Inc. (China), NIO (China), Rivian (US), XPENG Inc. (China), and ZEEKR (China), etc.

Research Coverage:
The study covers the Software Defined Vehicle market across various segments. It aims to estimate the market size and future growth potential of this market across different segments such as SDV type, vehicle type, E/E architecture, and region. The study also includes an in-depth competitive analysis of key market players, their company profiles, key observations related to product and business offerings, recent developments, and acquisitions.

This research report categorizes Software Defined Vehicle Market by SDV type (Semi-SDV, SDV), vehicle type (Passenger Car, Light Commercial Vehicle), E/E architecture, (Distributed Architecture, Domain Centralised Architecture, Zonal Control Architecture) and region Region (Asia Pacific, Europe, and North America).

The report's scope covers detailed information regarding the major factors, such as drivers, restraints, challenges, and opportunities, influencing the growth of the Software Defined Vehicle market. A detailed analysis of the key industry players provides insights into their business overview, solutions, and services; key strategies; contracts, partnerships, agreements, new product & service launches, mergers and acquisitions, and recent developments associated with the Software Defined Vehicle market. This report covers a competitive analysis of SMEs/startups in the Software Defined Vehicle market ecosystem.

Reasons to buy this report:
The report will help the market leaders/new entrants in this market with information on the closest approximations of the revenue numbers for the overall Software Defined Vehicle market and the subsegments. This report will help stakeholders understand the competitive landscape and gain more insights to position their businesses better and to plan suitable go-to-market strategies. The report also helps stakeholders understand the market pulse and provides information on key market drivers, restraints, challenges, and opportunities.
The report provides insights on the following pointers:
• Analysis of key drivers (Reduced recall and manufacturing costs, personalized client engagement, integration of ADAS digital cockpits, and increasing adoption of 5G technology), restraints (Limited over-the-air updates and increase in risk of cyberattacks), opportunities (Remote diagnostics, Pay-per-use mobility, SDV platform monetization and Digital twin for emergency repair), and challenges (Complex software updates and security patching and risk of data breach) influencing the growth of the Software Defined Vehicle market.
• Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and new product & service launches in the Software Defined Vehicle market.
• Market Development: Comprehensive information about lucrative markets – the report analyses the Software Defined Vehicle market across varied regions.

• Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in the Software Defined Vehicle market.

• Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players like Tesla (US), Li Auto Inc. (China), NIO (China), Rivian (US), XPENG Inc. (China), and ZEEKR (China), among others in the Software Defined Vehicle market.

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Table of Contents

1 INTRODUCTION 18
1.1 STUDY OBJECTIVES 18
1.2 MARKET DEFINITION 19
1.2.1 INCLUSIONS AND EXCLUSIONS 20
1.3 MARKET SCOPE 21
1.3.1 MARKETS COVERED 21
1.3.2 REGIONS COVERED 21
1.3.3 YEARS CONSIDERED 21
1.4 CURRENCY CONSIDERED 22
1.5 UNIT CONSIDERED 22
1.6 STAKEHOLDERS 22
2 RESEARCH METHODOLOGY 24
2.1 RESEARCH DATA 24
2.1.1 SECONDARY DATA 25
2.1.1.1 Key secondary sources 26
2.1.1.1.1 List of key secondary sources 26
2.1.1.2 Key data from secondary sources 27
2.1.2 PRIMARY DATA 27
2.1.2.1 Primary interview participants
(OEMs, hardware providers, tech integrators) 28
2.1.2.2 Key industry insights 28
2.1.2.3 Breakdown of primary interviews 29
2.1.2.4 List of primary interview participants 29
2.2 MARKET SIZE ESTIMATION METHODOLOGY 30
2.2.1 BOTTOM-UP APPROACH 31
2.3 MARKET BREAKDOWN AND DATA TRIANGULATION 32
2.4 FACTOR ANALYSIS 33
2.5 RESEARCH ASSUMPTIONS 34
2.6 RESEARCH LIMITATIONS 34
2.7 RISK ANALYSIS 35
3 EXECUTIVE SUMMARY 36
4 PREMIUM INSIGHTS 39
4.1 ATTRACTIVE OPPORTUNITIES FOR PLAYERS IN SDV ECOSYSTEM 39
4.2 FUTURE OF SDV MARKET, BY REGION 40
4.3 FUTURE OF SDV MARKET, BY SDV TYPE 40
4.4 FUTURE OF SDV MARKET, BY VEHICLE TYPE 41
5 MARKET OVERVIEW 42
5.1 INTRODUCTION 42
5.2 MARKET DYNAMICS 43
5.2.1 DRIVERS 43
5.2.1.1 Reduced recall and manufacturing costs 43
5.2.1.2 Personalized client engagement 44
5.2.1.3 Integration of ADAS digital cockpits 46
5.2.1.4 Increasing adoption of 5G technology 47
5.2.2 RESTRAINTS 48
5.2.2.1 Limited over-the-air updates 48
5.2.2.2 Increase in risk of cyberattacks in SDVs 49
5.2.3 OPPORTUNITIES 50
5.2.3.1 Remote diagnostics 50
5.2.3.2 Pay-per-use mobility 51
5.2.3.3 SDV platform monetization 52
5.2.3.4 Digital twin for emergency repair 53
5.2.4 CHALLENGES 54
5.2.4.1 Complex software updates and security patching 54
5.2.4.2 Risk of data breach 55
5.3 ECOSYSTEM ANALYSIS 57
5.3.1 OEMS 57
5.3.2 TIER 1 HARDWARE PROVIDERS 57
5.3.3 TIER 2 PLAYERS 57
5.3.4 CHIP PROVIDERS 57
5.3.5 SOFTWARE PROVIDERS 58
5.3.6 CLOUD PROVIDERS 58
5.4 TECHNOLOGY ANALYSIS (KEY ENABLERS OF SDV) 59
5.4.1 INTRODUCTION 59
5.4.2 CENTRAL HPC 60
5.4.3 ZONAL CONTROLLERS 61
5.4.4 OVER-THE-AIR UPDATES 62
5.4.5 SCALABLE E/E ARCHITECTURE 63
5.5 OEM SDV SHIFT COMPARISON 65
5.6 STRATEGIES FOLLOWED BY LEGACY OEMS FOR SDV SHIFT 66
5.6.1 OEM DASHBOARD FOR SDV OFFERINGS BY KEY OEMS 67
5.7 COMPARISON OF TECH PLAYERS AND CLOUD PROVIDERS IN SDV ECOSYSTEM 68
5.8 E/E ARCHITECTURE PLANS OF OEMS SHIFTING TO SDV 69
5.9 CASE STUDY ANALYSIS 72
5.9.1 CUBIC TELECOM'S ROLE IN TRANSFORMING VEHICLE ARCHITECTURE 72
5.9.2 IMPLEMENTING VIRTUAL TESTING ENVIRONMENT WITH RED HAT 72
5.9.3 VOLKSWAGEN'S STRATEGIC FOCUS ON SOFTWARE INNOVATION 73
5.9.4 STANDARDIZING OVER-THE-AIR UPDATES WITH ESYNC ALLIANCE 73
5.9.5 CONTINENTAL AUTOMOTIVE EDGE PLATFORM IN COLLABORATION WITH AWS 74
5.9.6 REVOLUTIONIZING AUTOMOTIVE SOFTWARE DEVELOPMENT WITH BLACKBERRY IVY AND AWS 75
5.9.7 AWS AND BLACKBERRY'S APPROACH TO MODERNIZING VEHICLE SOFTWARE 76
5.9.8 NVIDIA’S DRIVE PLATFORM POWERS VOLVO’S AUTONOMOUS VISION 76
5.9.9 TESLA'S JOURNEY INTO SOFTWARE-DEFINED VEHICLES 77
5.9.10 BMW'S STRATEGIC SHIFT IN AUTOMOTIVE SOFTWARE 78
6 FUTURE OF SDV MARKET, BY E/E ARCHITECTURE 79
6.1 INTRODUCTION 79
6.2 DISTRIBUTED ARCHITECTURE 79
6.3 DOMAIN CENTRALIZED ARCHITECTURE 80
6.4 ZONAL CONTROL ARCHITECTURE 80
7 FUTURE OF SDV MARKET, BY SDV TYPE 81
7.1 INTRODUCTION 82
7.2 SDV 83
7.2.1 INCREASED FLEXIBILITY AND AGILITY THROUGH OVER-THE-AIR UPDATES TO DRIVE SDV SHIFT 83
7.3 SEMI-SDV 84
7.3.1 TRANSITIONAL PHASE TOWARD MORE ADVANCED ZONAL CONTROL ARCHITECTURE 84
7.4 KEY PRIMARY INSIGHTS 84
8 FUTURE OF SDV MARKET, BY VEHICLE TYPE 85
8.1 INTRODUCTION 86
8.2 PASSENGER CAR 87
8.2.1 CONSUMER EXPECTATIONS FOR SEAMLESS, TECH-DRIVEN EXPERIENCES TO DRIVE MARKET 87
8.3 LIGHT COMMERCIAL VEHICLE 88
8.3.1 RAPID ADOPTION OF SOFTWARE-DEFINED LIGHT COMMERCIAL VEHICLES FOR GOODS TRANSPORT IN NORTH AMERICA TO DRIVE MARKET 88
8.4 KEY PRIMARY INSIGHTS 89
9 FUTURE OF SDV MARKET, BY REGION 90
9.1 INTRODUCTION 91
9.2 ASIA PACIFIC 93
9.2.1 GENERATIVE AI IMPACT ANALYSIS 95
9.2.2 CHINA 95
9.2.2.1 Platformization and SDV ecosystem development to drive market 95
9.2.3 JAPAN 96
9.2.3.1 Government and OEM partnerships to drive market 96
 
9.2.4 SOUTH KOREA 97
9.2.4.1 Global expansion of South Korean OEMs to drive market 97
9.3 EUROPE 98
9.3.1 GENERATIVE AI IMPACT ANALYSIS 99
9.3.2 GERMANY 99
9.3.2.1 Strong engineering landscape and leading component providers and OEMs shifting to SDV offerings to drive market 99
9.3.3 FRANCE 100
9.3.3.1 OEM initiatives and partnerships with software providers to drive market 100
9.3.4 UK 100
9.3.4.1 Government regulations to drive SDV adoption 100
9.3.5 SPAIN 101
9.3.5.1 OEMs planning to develop software architecture for SDVs to drive market 101
9.4 NORTH AMERICA 102
9.4.1 GENERATIVE AI IMPACT ANALYSIS 103
9.4.2 US 104
9.4.2.1 Technological advancements and OTA updates by OEMs to drive market 104
9.4.3 CANADA 104
9.4.3.1 Strategic partnerships and infrastructure development to drive market 104
10 COMPETITIVE LANDSCAPE 105
10.1 INTRODUCTION 105
10.2 KEY PLAYER STRATEGIES 105
10.3 MARKET SHARE ANALYSIS, 2023 107
10.4 REVENUE ANALYSIS, 2019–2023 109
10.5 COMPANY EVALUATION MATRIX: KEY PLAYERS, 2023 110
10.5.1 STARS 110
10.5.2 EMERGING LEADERS 110
10.5.3 PERVASIVE PLAYERS 110
10.5.4 PARTICIPANTS 110
10.5.5 COMPANY FOOTPRINT: KEY PLAYERS, 2023 112
10.5.5.1 Company footprint 112
10.5.5.2 Vehicle type footprint 113
10.5.5.3 Region footprint 114
10.6 COMPANY EVALUATION MATRIX: START-UPS/SMES, 2023 114
10.6.1 PROGRESSIVE COMPANIES 114
10.6.2 RESPONSIVE COMPANIES 114
10.6.3 DYNAMIC COMPANIES 115
10.6.4 STARTING BLOCKS 115
10.6.5 COMPETITIVE BENCHMARKING: START-UPS/SMES, 2023 116
10.7 COMPANY VALUATION AND FINANCIAL METRICS 117
10.8 COMPETITIVE SCENARIOS AND TRENDS 118
10.8.1 PRODUCT LAUNCHES 118
10.8.2 DEALS 120
11 COMPANY PROFILES 122
11.1 KEY SDV PROVIDERS 122
11.1.1 TESLA 122
11.1.1.1 Business overview 122
11.1.1.2 Products offered 124
11.1.1.3 Recent developments 126
11.1.1.3.1 Product launches 126
11.1.1.3.2 Deals 127
11.1.1.4 MnM view 128
11.1.1.4.1 Key strengths 128
11.1.1.4.2 Strategic choices 128
11.1.1.4.3 Weaknesses and competitive threats 128
11.1.2 LI AUTO INC. 129
11.1.2.1 Business overview 129
11.1.2.2 Products offered 130
11.1.2.3 Recent developments 131
11.1.2.3.1 Product launches 131
11.1.2.3.2 Deals 132
11.1.2.4 MnM view 133
11.1.2.4.1 Key strengths 133
11.1.2.4.2 Strategic choices 133
11.1.2.4.3 Weaknesses and competitive threats 134
11.1.3 ZEEKR 135
11.1.3.1 Business overview 135
11.1.3.2 Products offered 136
11.1.3.3 Recent developments 137
11.1.3.3.1 Product launches 137
11.1.3.3.2 Deals 138
11.1.3.3.3 Expansions 139
11.1.3.3.4 Others 139
11.1.3.4 MnM view 140
11.1.3.4.1 Key strengths 140
11.1.3.4.2 Strategic choices 140
11.1.3.4.3 Weaknesses and competitive threats 140
 
11.1.4 XPENG INC. 141
11.1.4.1 Business overview 141
11.1.4.2 Products offered 142
11.1.4.3 Recent developments 144
11.1.4.3.1 Product launches 144
11.1.4.3.2 Deals 145
11.1.4.4 MnM view 145
11.1.4.4.1 Key strengths 145
11.1.4.4.2 Strategic choices 145
11.1.4.4.3 Weaknesses and competitive threats 145
11.1.5 NIO 146
11.1.5.1 Business overview 146
11.1.5.2 Products offered 147
11.1.5.3 Recent developments 148
11.1.5.3.1 Product launches 148
11.1.5.3.2 Deals 148
11.1.5.4 MnM view 149
11.1.5.4.1 Key strengths 149
11.1.5.4.2 Strategic choices 149
11.1.5.4.3 Weaknesses and competitive threats 149
11.1.6 RIVIAN 150
11.1.6.1 Business overview 150
11.1.6.2 Products offered 152
11.1.6.3 Recent developments 153
11.1.6.3.1 Product launches 153
11.1.6.3.2 Deals 153
11.1.6.4 MnM view 154
11.1.6.4.1 Key strengths 154
11.1.6.4.2 Strategic choices 154
11.1.6.4.3 Weaknesses and competitive threats 154
11.2 KEY OEMS SHIFTING TO SDV 155
11.2.1 VOLKSWAGEN AG 155
11.2.1.1 Business overview 155
11.2.1.2 Products offered 157
11.2.1.3 Recent developments 159
11.2.1.3.1 Product launches 159
11.2.1.3.2 Deals 159
11.2.1.3.3 Expansions 161
11.2.2 HYUNDAI MOTOR CORPORATION 162
11.2.2.1 Business overview 162
11.2.2.2 Products offered 164
11.2.2.3 Recent developments 166
11.2.2.3.1 Deals 166
11.2.3 FORD MOTOR COMPANY 167
11.2.3.1 Business overview 167
11.2.3.2 Products offered 169
11.2.3.3 Recent developments 170
11.2.3.3.1 Product launches 170
11.2.3.3.2 Deals 170
11.2.4 GENERAL MOTORS 172
11.2.4.1 Business overview 172
11.2.4.2 Products offered 174
11.2.4.3 Recent developments 175
11.2.4.3.1 Product launches 175
11.2.4.3.2 Deals 176
11.2.5 RENAULT GROUP 178
11.2.5.1 Business overview 178
11.2.5.2 Products offered 180
11.2.5.3 Recent developments 182
11.2.5.3.1 Product launches 182
11.2.5.3.2 Deals 182
11.2.6 TOYOTA MOTOR CORPORATION 184
11.2.6.1 Business overview 184
11.2.6.2 Products offered 186
11.2.6.3 Recent developments 188
11.2.6.3.1 Deals 188
11.2.7 STELLANTIS 190
11.2.7.1 Business overview 190
11.2.7.2 Products offered 193
11.2.7.3 Recent developments 194
11.2.7.3.1 Product launches 194
11.2.7.3.2 Deals 195
11.2.8 MERCEDES-BENZ AG 196
11.2.8.1 Business overview 196
11.2.8.2 Products offered 198
11.2.8.3 Recent developments 200
11.2.8.3.1 Product launches 200
11.2.8.3.2 Deals 201
11.2.9 BYD 202
11.2.9.1 Business overview 202
11.2.9.2 Products offered 204
11.2.9.3 Recent developments 206
11.2.9.3.1 Product launches 206
11.2.9.3.2 Deals 207
11.2.10 BMW 208
11.2.10.1 Business overview 208
11.2.10.2 Products offered 210
11.2.10.3 Recent developments 212
11.2.10.3.1 Product launches 212
11.2.10.3.2 Deals 213
11.3 KEY TECH INTEGRATORS 214
11.3.1 NVIDIA CORPORATION 214
11.3.2 QUALCOMM TECHNOLOGIES INC. 215
11.3.3 BLACKBERRY LIMITED 217
11.3.4 VECTOR INFORMATIK GMBH 218
11.3.5 GOOGLE INC. 220
11.3.6 AMAZON INC. 221
11.3.7 MICROSOFT 223
11.3.8 APEX.AI 224
11.3.9 MOBILEYE 225
11.3.10 TENCENT 226
11.3.11 ALIBABA 227
11.3.12 HORIZON ROBOTICS 228
11.3.13 TATA TECHNOLOGIES 229
11.3.14 KPIT TECHNOLOGIES 230
12 RECOMMENDATIONS BY MARKETSANDMARKETS 231
12.1 LEGACY OEMS BACKWARD-INTEGRATING TO DEVELOP THEIR SOFTWARE SYSTEMS 231
12.2 TRANSITION TO SDV TO BE SLOWER IN ICE VEHICLES AND MARKET TO BE LED BY LUXURY VEHICLES 231
12.3 LEGACY OEMS SHIFTING TO DOMAIN CENTRALIZED ARCHITECTURE AND ZONAL CONTROL 231
12.4 CONCLUSION 232
13 APPENDIX 233
13.1 KEY INSIGHTS OF INDUSTRY EXPERTS 233
13.2 DISCUSSION GUIDE 233
13.3 KNOWLEDGESTORE: MARKETSANDMARKETS’ SUBSCRIPTION PORTAL 235
13.4 CUSTOMIZATION OPTIONS 237
13.4.1 FURTHER BREAKDOWN OF FUTURE OF SDV MARKET, BY VEHICLE TYPE AT COUNTRY-LEVEL (FOR COUNTRIES PRESENT IN THE REPORT) 237
13.4.2 ADDITIONAL COUNTRIES (APART FROM THOSE ALREADY CONSIDERED IN REPORT) WITH SIGNIFICANT SDV MARKET 237
13.4.3 COMPANY INFORMATION 237
13.4.4 PROFILES OF ADDITIONAL MARKET PLAYERS (UP TO FIVE) 237
13.5 RELATED REPORTS 237
13.6 AUTHOR DETAILS 238