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Q&A with Neusoft

Software-defined vehicles (SDVs) are reshaping the automotive industry, marking a shift where software — not hardware — is at the core of vehicle innovation. Unlike traditional vehicles that depend largely on mechanical and electrical components, SDVs integrate sophisticated software platforms to deliver advanced capabilities such as intelligent cockpits, advanced driver assistance systems and seamless connectivity. This evolution is largely driven by consumer demand for safer, smarter and more connected driving experiences.

As the industry transforms, the emphasis is moving from hardware-centric manufacturing to software-driven development and user-centric services. This paradigm shift is giving rise to new business models built around software subscriptions, over-the-air (OTA) updates and continuous service delivery. Manufacturers are now focused on capturing value throughout the vehicle’s life cycle rather than just at the point of sale.

The development process is also becoming more agile and collaborative. Traditional distinctions between original equipment manufacturers, tier 1 and tier 2 suppliers are fading, giving way to integrated ecosystems that include tech companies and platform providers. These cross-industry partnerships are essential for delivering the complex software stacks that power SDVs.

At the same time, regulatory frameworks are evolving to accommodate this shift, with regions such as mainland China and Europe adopting differing but increasingly supportive approaches to innovation in software-defined mobility.

To gain deeper insight, Owen Chen, Senior Principal Analyst at S&P Global, sat down at the IAA Mobility 2025 with Angela Wang, senior vice president of Neusoft Corp., chairwoman and president of Neusoft Europe, and chairwoman of Neusoft America.

Key takeaways:

  1. Defining SDVs: Neusoft defines SDVs as vehicles where software plays a central role in connecting the value chain among OEMs, partners and users. In mainland China, there is a strong focus on consumer-friendly features such as intelligent cockpits and ADAS, while Europe emphasizes foundational software and architecture.
  2. Shifting industry focus: The automotive industry is moving away from traditional hardware manufacturing toward software development and customer experience. This change is leading to new business models based on software subscriptions and ongoing services, with a focus on maximizing the value throughout the vehicle's life cycle.
  3. Collaboration and ecosystem building: Neusoft is working to build a collaborative ecosystem for SDVs by partnering with various stakeholders, such as OEMs, chip manufacturers and software developers. This includes developing integrated solutions and enhancing data services to support the evolving needs of the market.
  4. Adapting to market needs: Neusoft is committed to adapting its services to meet the distinct needs of different regions. In mainland China, the focus is on application-layer software, while in Europe, the emphasis is on foundational software. This approach allows Neusoft to provide tailored solutions that align with the specific demands of each market.

The following is an edited transcript of the conversation.

S&P Global Mobility: How does Neusoft define software-defined vehicles? Do you see any differences between how SDV is defined in China versus Europe?

Angela Wang: When we talk about SDVs, there are three key aspects that really stand out:

  1. Reconstruction of technical barriers: The competitive landscape is shifting. Instead of focusing solely on the traditional “big three” vehicle components — engine, chassis and transmission — companies are now prioritizing software research and development. With the skyrocketing demand for automotive software, we’re seeing software costs make up a larger and larger chunk of the total vehicle bill of materials (BOM).
  2. Evolution of development models: The way we develop vehicles is changing too. As hardware and software become more decoupled, along with the systems and applications they support, the development process is moving towards an agile DevOps model. This means integrating development, testing and operations into one smooth workflow.
  3. Shift in value drivers: As vehicles get smarter and more connected, consumers are increasingly focused on entertainment features, convenience and the reliability of mobile internet connectivity. Now, the consumer experience is what truly defines these products. To innovate effectively, we need to have a deep understanding of consumer needs and be able to respond quickly.

China versus Europe

When we compare SDVs in China and Europe, there are some notable differences, particularly in consumer preferences, ecosystem participants and regulatory environments:

What is Neusoft’s strategic positioning and core competence in the SDV field?

Strategic positioning

In the context of SDVs, Neusoft serves as an innovation partner for OEMs and partners within the industrial chain, providing a range of platforms, products, total solutions and services. Our key focus areas include next-generation automotive software platforms, vehicle operating systems, intelligent cockpits, intelligent driving systems, EV powertrain systems, vehicle-cloud integration, intelligent communication, information security, and big data.

Core competitiveness

Neusoft focuses on its software capabilities, leveraging over 30 years of experience with global customers. This experience helps us understand the trends and technical demands related to SDVs. In a market with rapid changes and innovation, Neusoft can respond effectively and adapt our offerings to meet customer needs. Our primary goal is to drive software innovation and improve consumer experience to assist our customers in their transformation efforts.

Which are Neusoft’s main automotive partners for SDV projects in China?

Currently, Neusoft is collaborating with numerous OEMs on domestic SDV projects, including Geely, Changan, Chery, FAW and Great Wall, as well as several joint-venture OEMs and new-energy vehicle (NEV) startups.

In these collaborations, what technical or platform support does Neusoft provide? Does this include E/E architecture, operating systems, middleware, hypervisor, OTA or cybersecurity?

In our collaborations, Neusoft focuses on designing and building operating systems and software platforms, developing middleware and applications, creating OTA platforms, and establishing cybersecurity architectures. We also participate in discussions about electronic and electrical architectures, providing insights from a software perspective. These capabilities help us support the development of SDVs.

Neusoft's role goes beyond that of a standard technology supplier. We provide OEMs with comprehensive software solutions and services that cover everything from foundational architectures to upper-layer applications, including technical implementation, safety and compliance.

In China, in-vehicle software mainly focuses on application-layer software such as ADAS, smart cockpit/connected services, and AI, while Europe emphasizes foundational software and underlying architecture. How does Neusoft serve different regional markets based on these distinct customer needs?

Neusoft has a software development and delivery team with full-stack technical capabilities and global experience, enabling us to meet the diverse needs of different markets. Our independently developed in-vehicle software platform serves as a unified technical foundation, allowing us to provide customized, high-quality delivery services by flexibly allocating global resources. This approach helps us respond to the rapid iteration and innovation demands of the Chinese market while also meeting the strict standards for functional safety, information security and development processes required in Europe.

Europe is a key international market for Neusoft. After nearly 20 years of focused development, we have established a European R&D system based in Hamburg, Germany, supported by an R&D center in Romania. Neusoft is committed to providing comprehensive innovation support for European clients, covering user experience, technology R&D, and business model innovation to assist in their transformation in the SDV era.

Many automakers are currently promoting full-stack in-house development. From the perspective of a software partner, how do you view the evolving trend between automakers’ in-house development and external sourcing?

In the future, OEMs and suppliers will move towards a cooperation model focused on "software specialization, collaborative innovation, and ecosystem co-construction." The traditional "hardware + software" black-box delivery model will decline, making way for cooperation based on software-as-a-product (SaaP) and Engineering and Integration Services (EIS).

Software suppliers need to shift from being just "suppliers" to becoming "enablers and co-creators" of OEMs’ SDV innovations. This transition requires improving software capabilities, upgrading cooperation models, enhancing customization, and fostering ecosystem collaboration while investing in new technologies. By working closely with OEMs to define and develop products, and building relationships based on "complementary capabilities, risk sharing and value co-creation," software suppliers can maintain a competitive advantage during this industrial transformation.

From the perspective of a software provider, how are the costs of SDVs typically calculated? Is it based on software BOM cost, total cost of ownership (TCO) over the vehicle life cycle, or licensing fees?

From the perspective of software suppliers, the cost of SDVs is typically calculated based on the total cost of ownership (TCO) over the entire life cycle. For components that have independent intellectual property rights — whether developed in-house or procured externally — costs are either listed separately based on licensing fees or accounted for independently according to the number of licenses.

What organizational or operational changes and innovations do you think automakers need to implement to successfully launch SDV products?

Building software capabilities is a systematic project that requires ongoing investment. OEMs need to make comprehensive changes, including reshaping corporate culture, adjusting organizational structures, optimizing management models and strengthening ecological cooperation. These steps are crucial for creating an efficient development system that meets new requirements, supports agile development and rapid iteration, and allows decision-making processes to respond quickly to market demands.

How does Neusoft view the development trends of SDV over the next 5-10 years?

The automotive industry is moving quickly from function realization to experience-driven development. This shift will restructure the automotive value chain and enhance ecological cooperation. Profit and value creation will increasingly focus on software development, application ecosystems, and customer operations, moving away from traditional hardware manufacturing and sales. The distinction between tier 1 and tier 2 suppliers will blur, leading to cross-industry collaborations and new partnerships. Consequently, business models will evolve toward "software subscriptions + ongoing services," making it essential to maximize full life cycle value for profitability.

The SDV sector is currently entering a complex phase, with enterprises facing significant challenges related to agility and resilience. Future competition will focus on balancing innovation, speed and cost. For all stakeholders in the global automotive industry, it is vital to integrate complementary resources and strengths to build rational and mutually beneficial collaborative relationships.

Chinese technology providers have emerged as pioneers in the SDV space, thriving in a competitive market. Through extensive trial and error, they have gained valuable experience and developed strong competitiveness. As a result, they are poised to become significant contributors to the global transformation of SDVs in the future.

What specific initiatives has Neusoft undertaken to build the SDV ecosystem in China and Europe, respectively? For example, collaborations with automakers, chip vendors and software developers, as well as practices related to software ecosystem platforms, OTA updates and data services.

As SDVs gain prominence, Neusoft is enhancing its strategic initiatives to build an open, collaborative and mutually beneficial industrial ecosystem. We see SDV not just as a technological shift but as a change in the industrial paradigm, using software to connect the value chain among OEMs, ecological partners and users. Neusoft integrates its software expertise and innovative practices from the Chinese market into its global business strategy, supporting global OEMs and industrial partners.

With regional headquarters in Hamburg, Germany, and an R&D center in Romania, Neusoft has been established in Europe for nearly 20 years. We also leverage R&D bases in Shenyang, Dalian and Wuhan to create a comprehensive onshore-nearshore-offshore R&D, innovation, and delivery network that helps European clients advance software-driven cooperation models and improve their competitiveness.

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