Basics: What is a Software-defined Vehicle
Last updated
Last updated
To answer this question, we need to look at two different perspectives: the customer perspective and the OEM (Original Equipment Manufacturer) or car manufacturer's perspective.
From the customer’s point of view, a software-defined vehicle is:
Connected: Always online and integrated into a digital ecosystem.
Personalized: Tailored to user preferences with driver profiles and custom settings.
Ever-Expanding: New features and services can be activated through updates and app stores.
Self-Updating: Software updates bring improvements and new features automatically.
It’s becoming more than just a car—it’s a habitat on wheels.
From the manufacturer’s point of view, a software-defined vehicle:
Enables Vehicle Experiences: Through advanced software-driven features.
Decouples Hardware and Software: Allowing for faster, modular development.
Uses Open Standards and Open Source Software: Encouraging a collaborative ecosystem.
Supports Iterative Development: Continuous improvement and regular updates.
The core philosophy is continuous improvement and ecosystem-centric design.
How can a software-defined vehicle support differentiation?
Today, especially among younger generations and in regions like China, the definition of what makes a car valuable is shifting. It's no longer just about horsepower but about gigaflops, reflecting digital performance.
Cars are now judged by their digital experience, not just physical attributes. This includes:
Entertainment Features: Like in-car karaoke.
Interactive Systems: AI-powered assistants and advanced infotainment.
Software-Enabled Services: Custom digital features that can be added after purchase.
This software-driven differentiation is reshaping what makes a vehicle stand out.
In our modern world, we’ve moved from a geocentric to a heliocentric view of the universe.
But in the automotive world, this question still has two possible answers:
From the customer's perspective, the smartphone is the primary tool. They expect cars to fit into their smartphone-driven ecosystem seamlessly, offering easy integration, data sharing, and familiar interfaces.
From the OEM’s perspective, they prefer the car to be the central ecosystem. They are reluctant to play second fiddle to smartphone companies, as this could limit their control over customer interactions and valuable data.
Apple: Rumored to have explored building its own electric car but may have paused due to profitability concerns.
Xiaomi: Has entered the automotive market with the Xiaomi SU7, a car many describe as a "smartphone on wheels."
The competition between these two perspectives will continue to shape the future of mobility.
From the customer's perspective, an always-connected software-defined vehicle offers a seamless digital experience, including:
Navigation and Traffic Alerts: Real-time route updates and traffic warnings.
Connected Infotainment Services: Streaming music, podcasts, and videos on the go.
Remote Vehicle Apps: Control functions like unlocking doors or starting the engine remotely.
On-Demand Services: Location-based services like ridesharing or delivery.
Maintenance and Emergency Services: Automatic updates, diagnostic alerts, and emergency assistance.
Smart Home Integration: Connecting the car to home automation systems for convenience.
Traditionally, OEMs lost contact with vehicles the moment they left the factory. Their only touchpoints with customers came through occasional repair visits or aftermarket services, leaving them with little insight into how vehicles were used on a day-to-day basis. This lack of data limited their ability to understand product performance, anticipate issues, and offer tailored services. The arrival of connected cars has eliminated this disconnect, enabling continuous monitoring and customer interaction.
From the OEM's perspective, connected vehicles revolutionize the entire automotive business:
Real-Time Data Insight: Understanding how cars are used, which features are popular, and identifying problems early.
Continuous Product Improvement: Using customer feedback and data analytics to improve product features and user experiences.
Enhanced Customer Relationships: Offering personalized services and creating long-term customer engagement.
Revenue Optimization: Developing new revenue models through connected services, upgrades, and feature subscriptions.
In the old way of working, developing a new vehicle model was treated as a project with a clear endpoint: the Start of Production (SOP). After SOP, the development team moved on, and only a few years later, a new project might be initiated to create a vehicle facelift or next-generation model. This approach left little room for continuous improvement after the vehicle’s initial release.
In the modern software-defined vehicle (SDV) paradigm, the concept of "never finished" is visualized as a continuous improvement process following the Start of Production (SOP) milestone. Unlike traditional automotive development models that ended with SOP, SDVs embrace iterative enhancements:
Regular Improvements: Regular updates ensure a constantly improving user experience.
New Features on Demand: Customers can activate new functionalities as needed.
Personalization: Tailored settings and user experiences.
Value Retention: Updates ensure the vehicle remains relevant and competitive over time.
New Business Models: Opportunities for subscriptions, feature unlocks, and service-based revenue streams.
Build/Measure/Learn Cycle: Continuous feedback loop to optimize features and performance.
Agile Organization: Adoption of new processes and ways of working.
Ecosystem Expansion: Vehicles are part of a broader digital and connected ecosystem.
This approach represents a shift from static product development to a dynamic lifecycle model, benefiting both customers and manufacturers.
The cost perspective in automotive has changed with the rise of software-defined vehicles:
Battery Cost Management: Software helps optimize energy use, extending battery life and reducing costs.
Reduced Bill of Materials (BOM): Shifting features from hardware to software lowers engineering and production costs.
Simplified Vehicle Variants: Offering only basic vehicle models and enabling additional features via software unlocks.
Increased Reuse: Software platforms can be reused across models, reducing development costs and time-to-market.
The automotive industry is undergoing a big shift in how vehicles are developed:
From Hardware-Centric to Software-Centric: Software defines the vehicle's value, making hardware upgrades less critical.
Platform Standardization: A unified software platform supports multiple models, reducing complexity.
Ecosystem Expansion: Cars become part of a larger digital ecosystem, offering compatibility with external platforms like smartphones.
Re-Use as a Key Enabler: Developing the core software platform once, then deriving customized versions for specific vehicle models using APIs for model-specific features while keeping one shared platform across all vehicle models.
The Software-Defined Vehicle (SDV) Approach relies on several technical building blocks:
Hardware Abstraction: Decoupling hardware from software for modular development.
APIs and Service-Oriented Architectures (SOA): Enabling communication between software components.
Container Technology: Isolating services to run them independently and securely.
DevOps and Automated Pipelines: Streamlining development, testing, and deployment processes.
Virtualization: Allowing development before hardware is ready through virtual testing environments.
Continuous Homologation: Ensuring faster regulatory approvals for new features and updates.
