Drivers today—and even more so in the future—demand connected driving experiences tailored to their personal tastes. This concept, already applied to many digital experiences, requires car Original Equipment Manufacturers (OEMs) and their suppliers to focus on Software-Defined Vehicle (SDV) architecture. While SDVs are essential to enabling future vehicle services—and new revenue streams for automakers—there are several ways the software-defined car will change the way the automotive industry approaches vehicle development.
Table of Contents
- New Vehicle Architectures
- Decoupling Software from Hardware
- Combating Future Cyberthreats
- New Roles in the Automotive Supply Chain
- Working with Big Tech Companies
Why Software-Defined Vehicles Are the Future
The two main reasons why SDVs are on an upward trend in terms of adoption is due to changing customer expectations and driver safety regulations. People want a car that's more than just a car; they want it to feel like an extension of their digital lives. Thanks to smartphones, smart homes, and other digital products, drivers are used to personalized experiences. With a software-defined vehicle, consumers will seek similar levels of personalization and connectivity. Automakers have to give drivers a more customizable and innovative experience in their cars, using the latest tech.
Advanced features like autonomous driving aren't just novel concepts sure to attract consumers, they're becoming mandatory because of new laws. For example, in the European Union (EU), cars must have features like Intelligent Speed Assistance (ISA), Autonomous Emergency Braking (AEB), Lane Keeping Assistance (LKA), and Driver Monitoring Systems (DMS). All of these new requirements make new software and sensors necessary, which means that software is highly important for vehicle manufacturers now.
Traditional Electrical/Electronic (E/E) architectures are not well-suited for software-defined vehicles, given the profusion of isolated Electronic Control Units (ECU) they contain. Each ECU is responsible for controlling vehicle functions like door locks, power steering, and airbags, running independently with its own data connections, processing, and, increasingly, software features. This architectural approach is inelastic and tricky to manage. To tackle this challenge, automotive manufacturers are turning to domain-based and zonal E/E architecture solutions.
- Domain-Based E/E Architecture: With a domain-based vehicle architecture, function-specific ECUs are consolidated and connected to Domain Controller Units (DCUs), and grouped within domains like powertrain, infotainment, Advanced Driver-Assistance Systems (ADAS), and passenger comfort. This facilitates easier architecture optimization, greater modularity, and better reuse of the same building blocks for various vehicle domains.
- Zonal E/E Architecture: Vehicles with zonal E/E architecture use Ethernet-connected zonal controllers to manage different body sections of the vehicle. By acting as a centralized nucleus for a section of the vehicle, this greatly reduces the quantity of ECUs and cables required. The zonal architecture enables a single ECU to manage vehicle functions across different domains, which can cut costs, save weight, and ease the development process. This level of flexibility unlocks the ability to run software from different suppliers on the same processor completely isolated.
Figure 1: Hybrid Zonal E/E Architecture (Source: NXP)
If the full potential of SDVs is to be realized, vehicle software must be decoupled from hardware. This delicate process has been perfectly exemplified in the world of smartphones. Through rigorous standardization and flexible hardware, developers can create and update apps across many smartphone models without interoperability concerns. Moreover, smartphone users can install and update their apps independently so they don’t conflict with one another.
This level of ease of use for software features is a basic expectation for consumers at this point, and digital experiences in vehicles are no different. Carmakers must be on par, in terms of software user experience, to attract users and remain up to date, making Over-the-Air (OTA) updates a critical enabler of SDVs. After all, it’s practically impossible to predict what software features consumers will want years in advance, given that drivers typically keep their cars for as long as 15+ years. ABI Research expects heavy SDV platform standardization efforts to unfold among OEMs toward the end of the decade as they aim to simplify software and hardware decoupling.
Cybersecurity risks are heightened as software becomes increasingly integrated into cars, especially with non-critical apps, such as infotainment systems or cloud servers. Malicious actors could potentially use these apps as access points to safety-critical functions, such as brakes and steering. Moreover, they could steal critical telematics data from high-value targets/vehicles.
Given the long life span of vehicles, it's essential to design for cybersecurity with an eye to the future. For example, in 15 years’ time, the threat landscape could be vastly different from today, with quantum computers being a potential threat. As a result, vehicles need to be able to upgrade their security systems to post-quantum standards through firmware updates at the lower layers of the software stack, making OTA updates crucial for cybersecurity. Cybersecurity should be approached holistically, with consideration given to every stage of design, development, and throughout the life span of the vehicle.
The shift to software-defined vehicles has caused big changes in how the automotive industry supply chain works. Auto OEMs, in their efforts to gain greater control of their software platforms, are now going further down the supply chain to find new suppliers with specialized skills for software development. Tier One suppliers, which used to be the main suppliers of parts to car companies, are now being asked to work alongside automakers to codevelop software.
Vehicle OEMs are also buying hardware and software from different places, going straight to software companies for products. They are also taking on the role of integrators themselves to implement third-party solutions in their proprietary SDV platforms.
As a result of these trends, Tier Ones are changing their role. In this new, software-defined landscape, Tier One suppliers are becoming more involved in automakers’ in-house software development (Continuous Integration/Continuous Delivery (CI/CD)) and focusing more on providing digital services, such as fleet management, data analysis, and digital twins.
The automotive industry and big tech companies will be strong partners in the era of software-defined cars. Big tech companies have shown considerable interest in the automotive industry due to the growing importance of software in vehicles, but they have not been successful in breaking into the industry. While the Android Automotive Operating System (AAOS) has largely succeeded, Google's Google Automotive Services (GAS) failed to make much progress due to customer data privacy concerns from car manufacturers.
Google has addressed these concerns by changing its model and offering vehicle OEMs access to its assets to create their own branded experiences. At the same time, Google is underscoring its focus on generating non-advertising revenue through licensing. Rather than dominating the software space in the automotive industry, big tech companies like Google will behave as more traditional suppliers, using their respective technical expertise.
Big tech's role in the automotive industry will vary by region, with companies playing a more significant consumer-facing role in China, where tech firms are forming partnerships with manufacturers to sell SDVs.
Where OTA Updates Fit into the Software-Defined Vehicle Picture
There’s no doubt that software is the future of connected car experiences. The transformation to SDVs, however, requires automakers and their suppliers to make some major pivots in terms of manufacturing and software development. An essential enabler in all of these changes is OTA updates. ABI Research estimates that by 2028, automakers will save US$1.5 billion via remote resolution to vehicle software faults.
The rise of software-defined cars has given rise to an increase in vehicle recalls. For example, Chrysler recalled 4.8 million vehicles in 2018 because cars were getting stuck on cruise control. Or you can look at GM and Nissan recalling 1 million pickup trucks and 1.2 million SUVs, respectively, due to software bugs.
Automakers face significant costs and damage to their reputation and market share from product recalls, especially as software-related recalls become more common. These recalls, triggered by safety-critical functionality issues, are required by regulators. With the number of software-related recalls rising and the cost of software updates at dealerships estimated to be around US$100, automakers urgently need to find remote solutions to fix faulty software.
In 2022, software-related recalls accounted for just 12% of all recalls but affected 32% of all vehicles recalled. Unlike hardware defects that can be limited to a few facilities, software is more likely to be used across many vehicles, which makes recalls due to software faults more likely to affect a larger number of vehicles.
Providing customers with the vehicle software and digital services that they are accustomed to is impossible without constant patches. OTA updates fix software bugs, eliminate security vulnerabilities, improve vehicle performance, and tack on new features. In other words, OTA updates are paramount to ensuring an unobstructed path for the software-defined vehicle market.
Learn more about the crucial role of OTA updates for SDVs in ABI Research’s Research Highlight A Smooth Journey to Next-Generation Vehicles Depends on Automotive Over-the-Air (OTA) Updates. This content is part of the company’s Smart Mobility & Automotive Research Service.