Software-Defined Vehicles (SDVs) have become a buzzword in the automotive industry, marking a transformative shift in how vehicles are designed, manufactured, and used. With the automotive industry and customers embracing electrification and digitalisation, SDVs are enhancing vehicle functionality and reshaping business models.
At the 9th edition of the ETAuto EV Conclave 2024 held in New Delhi, Satish Sundaresan, Managing Director of Elektrobit India, presented insights into the emerging SDV landscape. He highlighted its importance for future mobility and how India can leverage this trend. Sundaresan explained that the shift toward electrification has significantly altered vehicle manufacturing.
“When you replace the engine—the most complex mechanical part—with a battery, the cost of the vehicle rises significantly, from around 19% to nearly 40%. However, the complexity of the electric motor is greatly reduced,” he noted. This simplification has paved the way for increased competition, especially in the EV space, where even smaller players are making inroads.
What is a software-defined vehicle, and why does it matter?
SDVs are distinct for their “vehicle functions that can be enabled via software,” Sundaresan explained. Early examples include features like cruise control, Apple CarPlay, and Android Auto. However, SDVs aim to go beyond these functionalities, evolving through over-the-air (OTA) updates and enhanced connectivity.
To elaborate, Sundaresan outlined the evolution of SDVs into levels:
- Software-Enabled Vehicles: Features like electronic stability control or brake-by-wire systems depend on software for operation.
- Connected Vehicles: Systems such as navigation apps and music streaming are examples of connected functionalities.
- Updatable Vehicles: OTA updates enhance or fix software, much like updates on smartphones.
- Upgradable Vehicles: Software upgrades improve hardware-specific functions, such as ECU (Electronic Control Unit) enhancements.
- Platform-Based Vehicles: Unified software platforms streamline production and maintenance across multiple vehicle models.
- Customisable Ecosystems: The ultimate SDV vision integrates third-party apps and customisations, offering a seamless digital experience across devices and vehicles.
While levels 1 to 3 are increasingly common, achieving the higher levels remains a significant industry challenge.
Challenges of the SDV revolution
The transition to SDVs requires a fundamental shift in vehicle development and maintenance. Replacing internal combustion engines with batteries simplifies mechanical complexity but increases production costs. Unlike hardware, which incurs fixed costs, software requires continuous investment. Sundaresan also highlighted challenges hindering SDV adoption:
- Long-Term Maintenance: Software updates and bug fixes must be maintained throughout a vehicle’s lifecycle, often spanning over a decade.
- Cost Management: Treating software development as an operational expense complicates budgeting.
- Monetisation Hurdles: Consumers are hesitant to adopt subscription models. Sundaresan noted, “If someone pays INR 50 lakh for a car, they’re unlikely to be happy about an additional INR 10,000 per year for live traffic updates.”
These factors reveal that monetising SDVs isn’t as straightforward as it appears.
Collaboration: The road ahead for SDVs
Despite the challenges, Sundaresan expressed optimism about SDVs’ potential. He emphasised the need for collaboration among OEMs, tier-one suppliers, and engineering service providers. “OEMs are building their own software teams, tier-one suppliers must decide whether to become technology companies, and engineering service providers need to align their capabilities with market demands,” he said.
The journey to fully realising the potential of SDVs may be complex, but Sundaresan’s insights underscore the immense possibilities for the future of mobility.
