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.
Many OEMs already have Software-Defined Vehicles on the road. The real question is whether their engineering processes have evolved with them.
In a recent automotiveIT podcast, Michele Del Mondo, Senior Advisor, Global Automotive, PTC, argues that the industry’s biggest challenge is no longer getting software into the vehicle. That milestone has largely been achieved. Instead, the challenge is managing what happens after the vehicle leaves the factory: continuous updates, software versions, traceability, compliance, variant management, and lifecycle-wide visibility.
Software-Defined Vehicles (SDV) are fundamentally changing how vehicles are engineered, maintained, and monetized. Yet many automotive organizations continue to rely on development processes designed for a hardware-centric world, where the Start of Production (SOP) marked the end of engineering rather than the beginning of a new phase in the product lifecycle.
An SDV is more than software in a vehicle
A vehicle does not become a Software-Defined Vehicle simply because it contains millions of lines of code. Modern vehicles have been software-intensive for years. The defining characteristic of an SDV is its ability to evolve after delivery.
Software-Defined vehicles continue to gain new functionality throughout their operational life through software updates, feature enhancements, and digital services. Rather than remaining fixed once production begins, they become dynamic platforms that continuously adapt to customer needs, regulatory changes, and business opportunities.
As Michele Del Mondo explains:
“A vehicle with a large amount of software is not automatically a Software-Defined Vehicle. What matters is how it continues to evolve after it has been sold”
This distinction changes everything. The focus shifts from delivering a finished product to managing a living product throughout its entire lifecycle.
SDVs meet processes from the last decade
Traditional automotive development was built around a clear milestone: SOP.
For decades, engineering teams defined requirements, developed the vehicle, tested it secured approvals, and released it into production. Once SOP was reached, the product was largely considered complete.
Software-defined vehicles disrupt this model entirely.
Today, vehicles continue to evolve long after they leave the production line. Software updates introduce new functionality, fix issues, improve performance, and enable entirely new business models. Development does not stop at SOP. Instead, it becomes a continuous process extending throughout the vehicle’s operational life.
This created both an opportunity and a challenge. OEMs can now generate value beyond the initial vehicle sale through software-enabled services and feature-on-demand offerings. However, doing so requires engineering organizations to rethink how they manage requirements, resting, release, approvals, and compliance across the entire lifecycle.
Many organizations are operating SDVs with development processes that were designed for a different era.
The real challenge is variant management
One of the most important insights from the discussion is that software often increases complexity rather than reducing it.
Platform strategies have helped OEMs reduce hardware diversity by standardizing vehicle architectures and components. But the complexity doesn’t disappear. Instead, it shifts into software.
Every software-enabled feature introduces new combinations of functionality, configurations, regional regulations, market requirements, and customer options. OTA updated add yet another layer of variability as vehicles running different software versions coexist in the field.
The result is an explosion in the number of possible vehicle configurations that must be engineered, tested, approved, and maintained. OEMs must understand exactly which features exist within which software versions and how these features affect individual vehicle variants.
“Platform strategies reduce hardware configurations. Variant diversity continues to grow because the complexity is being shifted into software” - Michele Del Mondo
Managing that complexity has become one of the automotive industry’s most pressing engineering challenges.
Listen to the full conversation
Explore the complete conversation with Michele Del Mondo and learn why traceability, variant management, and lifecycle thinking are becoming critical in the SDV era.
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Why excel has reached its limits
The podcast title highlights a reality many engineering organizations still face today: critical engineering information remains trapped in spreadsheets, disconnected databases, and siloed tools.
The episode shared the example of an OEM that maintained a Quality Function Deployment matrix in Excel containing more than 39 000 cells. While spreadsheets may appear manageable at first, they quickly become difficult to scale, audit, maintain, and synchronize once product complexity increases.
The problem is not Excel itself. The problem is fragmentation.
When requirements, variants, tests, approvals, software versions, compliance evidence, and release information reside in separate systems, organizations create countless opportunities for inconsistency and error.
As Michele explains:
“Every interface between systems is a potential breaking point.”
In an SDV environment, disconnected toolchains make it nearly impossible to understand the impact of a change quickly and confidently. Engineering teams need integrated systems that connect data across the entire development lifecycle rather than isolated repositories of information.
Traceability becomes a competitive advantage
In the SDV era, traceability is no longer simply a quality-management best practice. It is becoming a strategic capability.
Every software change creates a chain of dependencies that spans requirements, design decisions, testing activities, approval workflows, software releases, and vehicle configurations. When an issue occurs, manufacturers need to understand its impact immediately.
That visibility requires answers to critical questions:
- Which vehicle configurations are affected?
- Which software versions are installed?
- Which requirements, tests, and approvals are associated with the change?
- What update history and rollback procedures exist?
Increasingly, regulators expect OEMs to provide this level of evidence and traceability across the software lifecycle. Standards and regulations such as UNECE R15 and R156 reinforce the need for documented, auditable processes around software updates and vehicle configurations.
As Michele puts it:
“The company that can respond fastest through its systems will win the future.”
OTA updates require complete visibility
Over-the-air updates are often viewed as a technical capability. In reality, the technology behind delivering software is only one part of the challenge.
The greater challenge is operational readiness.
Before an update can be deployed safely, OEMs must know exactly which vehicles are affected, which software versions are currently installed, which approvals have been completed, and what actions must be taken if the update introduces unexpected issues.
If a problem occurs, organizations must be able to trace every vehicle, every requirement, and every approval associated with the release. They must also maintain clear rollback procedures and update histories.
“If I cannot identify within minutes which requirement a software update came from and who approved it, then I have a structural problem that the next update will not solve.” - Michel Del Mondo
The success of OTA updates depends far more on lifecycle traceability than on the ability to transmit software remotely.
SDVs are changing business models, not just engineering
Perhaps the most profound implication of the Software-Defined Vehicle is that it changes how OEMs create value.
Historically, revenue generation was concentrated around a single transaction. The vehicle was developed, produced, sold, and largely considered complete.
The assumption no longer holds.
Software-defined vehicles can continue generating value throughout their operational life. New features can be delivered after purchase. Existing functions can be improved. Digital services can be introduced based on changing customer needs and market demands.
This creates opportunities for:
- Feature-on-Demand offerings
- Subscription-based services
- Premium software capabilities
- Continuous customer engagement
- Lifecycle revenue generation
The transformation is therefore not only technological. It is organizational and commercial. OEMs must shift from managing a finished product to operating a continuously evolving platform.
As Michele explains in the episode:
“My vehicle is not finished at SOP. In reality, it may never truly be finished. That creates the opportunity to continue generating revenue through software and capabilities long after the vehicle has been sold”
Conclusion: The SDV challenge Is an organizational challenge
The Software-Defined Vehicle is a transformation challenge, rather than a software one.
The OEMs that succeed in the SDV era will not necessarily be those with the most software. They will be the ones that can connect engineering, testing, compliance, software operations, variant management, and lifecycle governance through shared processes and end-to-end traceability.
Vehicles are becoming software platforms that continuously evolve. To support them, OEMs must move beyond SOP-centric thinking and embrace lifecycle-centric engineering.
Because in the SDV era, competitiveness is no longer determined by what happens before production. It is determined by how effectively manufacturers manage everything that happens after it.
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