Hanna Taller is a content creator for PTC’s ALM Marketing team. She is responsible for increasing brand awareness and driving thought leadership for Codebeamer. Hanna is passionate about creating insightful content centered around ALM, life sciences, automotive technology, and avionics.
The automotive industry is evolving at a breakneck speed and isn’t showing any signs of slowing down. The future of cars is not just connected and electric but increasingly defined by software. This includes everything from driving behavior and safety features to infotainment and personalized user experiences. Digital features are central to the driving experience and how automakers compete.
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What is a software-defined vehicle?
A software-defined vehicle (SDV) is a vehicle in which software—not hardware—is the primary driver of functionality, innovation, and user experience.
Rather than being limited to what was built into the car at the factory, an SDV can evolve through software updates, much like a smartphone or computer.
Unlike traditional vehicles that rely primarily on mechanical and hardware components, SDVs rely on a centralized software architecture and decoupled hardware-software layers, enabling dynamic features, real-time updates, and continuous improvement via software.
These vehicles offer customizable user experiences, integrate seamlessly with digital ecosystems, and utilize data analytics for improved safety, efficiency, and maintenance.
Key characteristics:
- A centralized computing platform replaces dozens of separate electronic control units (ECUs).
- Over-the-air (OTA) updates deliver new features, bug fixes, and security patches remotely.
- Decoupling software and hardware allows for independent upgrades and faster innovation.
- Real-time data powers diagnostics, user personalization, and connected services.
What are the benefits of a software-defined vehicle?
SDVs unlock a range of strategic, technical, and economic benefits for OEMs, suppliers, and customers.
Accelerated innovation
Software-driven features like advanced driver-assistance systems (ADAS), infotainment, personalization, and energy optimization can be developed and tested rapidly. Support for agile and DevOps methods increases development speed and responsiveness to market needs.
Continuous feature updates and improvements
Over-the-air (OTA) updates enable bug fixes, new features, and performance enhancements without dealership visits. Vehicles improve after the point of sale, enhancing customer satisfaction and extending product relevance.
Modular, scalable architecture
A modular, scalable architecture decouples software from hardware, allowing independent evolution. This encourages reuse of software modules across vehicle lines and generations, reducing development time and costs.
Smarter, personalized user experience
Vehicles learn driver preferences, adapt interfaces, and enable more natural human-machine interaction, increasing customer satisfaction. These vehicles also provide seamless integration with mobile apps, smart homes, and digital ecosystems for added convenience.
Enhanced cybersecurity and compliance
Centralized control and real-time monitoring reduce the risk of cybersecurity vulnerabilities. Easier implementation of regulatory updates through remote software patches improves adherence to standards and reduces the cost of penalties.
Longer product lifecycle and resilience
Vehicles stay relevant longer through feature evolution. SDVs enhance resilience to supply chain shocks by decoupling software development from hardware availability.
What is the architecture of software-defined vehicles?
Software-defined vehicles (SDVs) represent a fundamental shift in how cars are designed, developed, and evolved. At the heart of this transformation is a new vehicle architecture that enables continuous innovation, faster time to market, and new revenue opportunities.
From distributed to centralized intelligence
Legacy vehicles rely on a patchwork of 70–100+ electronic control units (ECUs), each running isolated software to control a specific function like braking, lighting, or infotainment.
Software-defined vehicles, by contrast, are built around:
- Central computing platforms that consolidate vehicle functions
- Zonal controllers that collect sensor data and reduce wiring
- A flexible software layer that allows updates, feature expansion, and intelligent behavior, much like a smartphone on wheels
The architecture of SDVs integrates advanced software applications with robust hardware components (ECUs) to create a highly adaptive, connected, and intelligent vehicle. The four key layers of this architecture include the following:
Hardware platform
The hardware in software-defined vehicles includes high-performance, centralized computers that replace dozens of electronic control units (ECUs), while zonal architecture reduces complexity and weight. Vehicles are also equipped with a network of sensors, which gather data about the vehicle’s surroundings and internal systems.
Software platform
A vehicle operating system manages core functions and provides common services that facilitate communication between the car’s hardware and software components. The modular, service-based architecture enables software reuse across models and allows for rapid feature development and deployment.
Connectivity and cloud integration
Connectivity and cloud integration enable over-the-air (OTA) updates for bug fixes, new features, and compliance updates. They also provide real-time data access for diagnostics, fleet optimization, and user personalization.
Applications and services
User applications enable digital features such as infotainment systems, driver assistance, personalization, subscription upgrades, and third-party app ecosystems. Additionally, vehicle management apps provide information on vehicle health, maintenance schedules, and performance analytics.
Challenges in software-defined vehicles
While software-defined vehicles (SDVs) offer significant strategic advantages, they also introduce complex technical, organizational, and market challenges.
Cybersecurity and compliance
As vehicles become increasingly connected and software-driven, cybersecurity is no longer optional—it’s foundational. Every over-the-air update, sensor, and cloud connection introduces potential vulnerabilities that must be proactively managed.
At the same time, global regulatory landscapes are tightening. Standards like UNECE WP.29, GDPR, and emerging US cybersecurity laws mandate strict controls over data privacy, secure software updates, and risk mitigation.
Noncompliance or breaches can lead to legal risk, recalls, and reputational damage.
Software development at scale: balancing complexity with speed
Developing software for modern vehicles is no longer about isolated systems—it’s about building an integrated, real-time platform that spans ADAS, infotainment, powertrain, and more. These are safety-critical systems that must meet rigorous standards like ISO 26262, perform in real time, and function flawlessly as a whole.
The complexity is immense—and so is the risk. Even small integration issues can lead to delays, costly rework, or failures in the field.
Without disciplined software engineering at scale fueled by AI, organizations risk product delays, rising development costs, and reputational harm.
Organizational silos and talent gaps: breaking the hardware mindset
Most automotive organizations are historically built around hardware-driven programs, with long development cycles and rigid structures. But the shift to software-defined vehicles demands a different approach—continuous development, agile teams, artificial intelligence, and software-native thinking.
Unfortunately, many firms face a shortage of critical software talent, limited DevOps capabilities, and deeply embedded silos that resist change.
To compete in the SDV era, companies must reshape their organizations, invest in reskilling existing talent, and build strategic partnerships with tech leaders.
Testing, validation, and certification
The performance and safety of SDVs hinge on the robustness of their software. In a software-defined vehicle, testing isn’t a phase—it’s a continuous, complex process. With millions of lines of code and countless hardware-software configurations, validating performance, safety, and reliability is exponentially more challenging than in traditional vehicles.
While simulation and virtual testing are accelerating development and reducing cost, physical validation remains essential, especially for safety-critical systems like ADAS and braking. Testing complexity drives up cost and time to market without a modern, scalable validation strategy.
The future of software-defined vehicles
The automotive industry is entering a new era—one where the vehicle’s value is increasingly defined by software over hardware. As we look ahead, software-defined vehicles (SDVs) are poised to reshape not only how cars are built and updated, but how they generate value throughout their lifecycle. Tomorrow’s vehicles won’t be frozen in time the moment they leave the factory. Thanks to over-the-air (OTA) updates, they’ll receive continuous improvements—delivered directly to the customer’s driveway.
Artificial intelligence and advanced analytics will power everything from personalized in-car experiences to predictive maintenance and self-driving capabilities. Future SDVs will be deeply integrated into the digital world—syncing with smart homes, responding to digital assistants, and communicating with other vehicles and infrastructure.
The shift to software-defined vehicles is more than a technical evolution—it’s a business model revolution. The winners will be those who think beyond the vehicle, invest in platform thinking, and embrace software as a core competitive asset. The road ahead is not just smarter—it’s more strategic than ever.
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