OEMs’ deployment strategy for the software-defined vehicle (SDV)

OEMs’ deployment strategy for the software-defined vehicle (SDV)

Publication Date: 02-Jul-2025
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The automotive industry’s transition to SDVs is a multi-year, multi-dimensional transformation. It combines deep technical shifts, organizational restructuring, supply chain evolution, and business model reinvention. Most automakers target full SDV capability (centralized compute, real-time OTA, cross-domain orchestration) by 2026–2030, starting with premium or EV lines and expanding to mass-market vehicles.

S&P Global defines SDV as a vehicle that is fully updatable and upgradeable over the air across all domains throughout its lifetime, made possible by abstracting the hardware resources from software functions.

The concept of SDV can be traced in the automotive industry’s accelerated digital transformation in recent years. An average connected and automated vehicle today has somewhere between 100-200 million lines of code – many times more than a commercial aircraft. This development has given rise to the software-defined vehicle (SDV), a veritable revolution which is transforming both the relationship between the car and the on-board user experience, and the way the industry works.

The SDV is being seen as the logical consequence of some of today’s greatest mobility trends—Connectivity, Autonomy, Shared Mobility and Electrification (CASE). The SDV provides a suitable platform for these trends with its centralized, cross-domain E/E architectures.

One of the key promises of SDVs is the ability to deliver over-the-air (OTA) software updates, introduce new functions, and enable faster vehicle improvements and fixes throughout the vehicle’s lifecycle via centralized compute systems that feature less wiring and fewer electronic control units.

What does SDV bring to the table? A safer, more efficient, more enjoyable and more personalized experience for the driver and reduced costs, faster time-to-market, and diverse monetization opportunities for automakers, not to mention an optimized value chain and enhanced design, development and production.

This report seeks to:

  • Inform, align, and guide stakeholders on how the industry plans to transition from traditional vehicles to SDV-based products and services. 

  • Explain the rationale for adopting an SDV strategy.

  • Clarify the transformation roadmap—technical, organizational, and financial.

  • Define roles, partnerships, and risks involved.

  • Demonstrate OEMs' strategic alignment with long-term business goals.

 

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