How are software-defined vehicles disrupting the automotive industry?

Software is turning the automotive industry on its head. New and future vehicles boast a growing array of software and technologies that are improving vehicle safety, the driving experience and overall vehicle performance.

This transformation has given rise to the term “software-defined vehicle.” And it’s changing everything.

As the name suggests, SDVs rely on software – rather than solely mechanical components – to control and manage the various systems and functions in a vehicle, completely redefining the driving experience. Software is being incorporated in engines, transmissions, brakes, steering, infotainment and elsewhere. This enables software updates when new technology comes to market, giving drivers more control over the personal driving experience.

Factors driving this trend include increasing demand for advanced safety features, the rise of autonomous driving technology, and the need for vehicles to be more connected and integrated with other devices and systems.

And the trend is driving even broader change than just the options on individual vehicles. The shift to SDVs is profoundly affecting every function and facet of the automotive industry. Here’s a closer look at the six key ways SDVs are changing the automotive industry and what automakers can do to stay relevant:

Collaborative Innovation

With software now playing a central role in vehicle design, manufacturing, and functionality, traditional automakers find themselves competing with technology companies and startups for talent and resources.

Tesla may be the most well-known example of an automaker that has embraced the shift toward SDVs. However, traditional automakers such as Ford, Volkswagen, Stellantis, Mercedes Benz and BMW are also investing heavily in software and technology. Many have established their own software departments. But, just as with any new industry, the problem many will deal with is a lack of talent. The OEMs that can create a culture of collaborative innovation and secure partnerships with third-party providers will have an edge on those that navigate this transition alone.

Development Approach

SDVs are also driving changes in the development process, as automakers and their suppliers adapt to new software development methodologies and practices.

One of the most significant changes to automotive operations is the adoption of agile software development cycles, which are designed to be more flexible and adaptable than the traditional sequential waterfall development processes common in automotive manufacturing.

Shorter development cycles, frequent releases, and a focus on collaboration and continuous improvement characterize agile development processes. This approach is well-suited to software development, as it allows teams to respond quickly to changing requirements and market conditions and to incorporate feedback from users and stakeholders.

However, the move towards agile software development cycles, such as the V model, can conflict with traditional hardware development methodologies, creating a culture clash between the software and hardware teams. For example, teams that typically work in a structured and sequential manner may struggle to adapt to the more flexible and collaborative approach of agile developments. Conversely, teams working in an agile development environment may struggle to fit into the more structured and hierarchical setting of traditional hardware development.

Automakers and their suppliers are addressing this cultural difference by adopting new development methodologies that blend the best of both worlds. For example, some companies are adopting a hybrid approach that combines agile software development cycles with elements of the V model. This approach allows teams to take advantage of the flexibility and collaboration of agile development while still ensuring the hardware development process is well-structured and sequential.

Others are creating separate software and hardware development teams, each with their own methodologies and processes. This approach allows individual teams to focus on their respective areas of expertise and work in ways best suited to their strengths. The reality is, there is not a single established method for dealing with this impending culture clash, as SDVs are new territory for everyone. But the one who finds the most streamlined approach could find itself in the driver’s seat for future innovation.

Over-the-Air Updates

One of the most significant advantages of SDVs is their ability to adapt and evolve. With traditional mechanical systems, changing or updating a vehicle's functionality requires physical modifications, which can be costly and time-consuming. In contrast, SDVs can be updated and improved through over-the-air software updates, allowing manufacturers to improve and enhance the vehicle's capabilities continually with much less vehicle downtime.

These updates can fix bugs, enhance performance and add features, allowing drivers to enjoy a continually improving vehicle. In addition, SDVs can receive these updates directly from the manufacturer without the need to visit a dealership or service center. Over-the-air software updates can also increase cybersecurity for SDVs. Automakers can send security patches and updates directly to the vehicle, making it easier to address security vulnerabilities and protect against cyber threats.

Car buyers will love this new world of over-the-air updates. However, consumer behavior adapts quickly to the status quo, and many will look to the automakers that can provide over-the-air updates faster and with more reliability. Those who can manage the process most efficiently will be better suited for success.

Reduced Costs for Automakers and Consumers

Reduced costs are a significant benefit of the shift toward SDVs. With software controlling many vehicle systems, fewer complex and disparate mechanical systems are needed. This can lead to a reduction in the overall cost of the vehicle, as well as a reduction in the cost of maintenance and repairs. In combination with over-the-air updates, automakers can reduce the number of vehicle recalls.

Software-defined vehicles can also reduce costs with predictive maintenance. By collecting data from sensors and other sources, the software can analyze the condition of the vehicle's various components and anticipate when maintenance will be required. This can help reduce the likelihood of unexpected breakdowns and repairs and optimize the vehicle's maintenance schedule to minimize downtime and maximize efficiency.

Finally, software-defined vehicles can improve fuel efficiency by optimizing the vehicle's various systems and functions, improving the vehicle's overall efficiency. This can lead to significant savings over the life of the vehicle, particularly for fleet operators and other high-mileage users.

The advent of SDVs also provides the opportunity for car buyers to not just maintain the value of their vehicle but increase it with new features they didn’t have when they bought the vehicle. Automakers that can figure out how to create added value for their customers after the vehicle leaves the lot will drive resale prices and overall brand value.

Transformed Driving Experience

With software controlling many vehicle systems and functions, drivers can expect a more streamlined and integrated driving experience with greater levels of safety, convenience, personalization and comfort. Advanced safety features, such as lane departure warnings, automatic emergency braking and adaptive cruise control, are now standard on many SDVs. These features can help drivers stay safe on the road and avoid accidents, making the driving experience more enjoyable and less stressful.

SDVs are also driving changes in the way we interact with our vehicles. Many vehicles now come equipped with advanced infotainment systems that allow drivers and passengers to access a range of digital content, such as music, movies and navigation. In addition, these systems are often voice-activated, making it easier and safer for drivers to stay connected while on the road.

Increased Connectivity

Advanced communication systems, along with a wealth of sensors and other data-gathering devices on board, generate vast amounts of data that can be used to improve everything from the driving experience to overall vehicle performance. For example, predictive maintenance systems rely on increased connectivity and data-driven insights. These systems use data from sensors and other sources to monitor a vehicle's performance and identify any potential issues before they become problems.

The drive towards SDVs is set to accelerate, with software and technology playing an ever-greater role in the automotive industry, now and for years to come. Luxoft, a DXC technology company, helps automakers accelerate the development of software-defined vehicles and overcome the challenges and concerns to be addressed.

The opportunities presented by SDVs are simply too exciting to ignore. As this trend continues, we can expect to see a range of new features and capabilities emerge that will transform how we drive and interact with our vehicles even further.

To learn more about Luxoft’s solutions that are accelerating the transformation to software-defined vehicles, visit luxoft.com/automotive.