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.
Level 2 vehicles already account for roughly 40% of new car sales globally. By 2032, that figure is projected to climb to 62% - and in the U.S., it could surpass 75%. Those numbers represent more than a market shift. They represent a transformation in the volume, complexity, and stakes of every safety-critical requirement, validation process, and compliance document that quality teams are responsible for managing.
The question facing OEMs and Tier 1 suppliers isn’t whether Level 2 adoption will continue to grow. It will. The real question is whether your quality processes can survive the complexity that comes with it.
The numbers behind the shift: Level 2 goes mainstream
The data is unambiguous. Level 2 vehicles – those equipped with features like adaptive cruise control, lane-keeping assist, and automatic emergency braking – are no longer a premium option. They are rapidly becoming the industry default.
This trajectory runs parallel to a broader transformation in automotive technology. According to the Boston Consulting Group, the automotive software and electronics market is projected to grow from $320 billion to $1.2 trillion by 2035, with software now driving more than 90% of new vehicle features. Every Level 2 vehicle carries multiple ADAS systems, each with its own web of independent, safety-critical requirements.
The implication is direct: the complexity curve tracks the adoption curve. What was manageable at niche volumes – hundreds of vehicles, a handful of programs – becomes increasingly difficult to govern at mainstream scale.
Why ADAS multiplies the quality burden
Traditional vehicle features follow relatively predictable failure modes. ADAS systems don’t. They are software-intensive, sensor-dependent, and operate in unpredictable real-world conditions where edge cases – not typical use – drive the most serious risks.
This creates several distinct challenges for quality teams:
Requirements interdependencies
A single ADAS program can generate thousands of interconnected requirements that must stay aligned across design, test, and validation. When those requirements are managed in disconnected tools, like spreadsheets, email chains, and standalone documents, alignment breaks down.
Hardware-software interaction defects
Defects that emerge at the intersection of hardware and software are difficult to detect in siloed testing environments. The interaction between a radar sensor and the software interpreting its signal may behave correctly in isolation, yet fail in specific real-world conditions.
Post-production validation demands
Over-the-air (OTA) updates mean vehicles continue to evolve after Start of Production (SOP). Traceability can’t end at launch; it must extend throughout the vehicle’s operational life.
The research underscores the urgency. Nearly 70% of quality issues appear in the early phases of vehicle development – concept, requirements, and initial design. Industry quality studies estimate that between 55% and 65% of total defects originate during the design phase, before manufacturing begins. Catching problems early is not just good practice; at ADAS scale, it’s operationally essential.
ADAS doesn’t simply add more requirements. It changes the nature of validation itself, demanding continuous, traceable proof of quality rather than a one-time check at launch.
The regulatory weight: ISO 26262 and SOTIF
Two standards define the compliance landscape for ADAS development, and both demand rigorous documentation.
ISO 26262 addresses functional safety, ensuring that systems behave safely when faults occur. It requires documented safety cases backed by auditable evidence connecting every requirement to its design, test, and result.
SOTIF (Safety of the Intended Functionality) goes further. It addresses system behavior in the absence of hardware or software faults, targeting the edge-case scenarios that are uniquely prevalent in ADAS. Situations where the system functions as designed, but that design is insufficient for a real-world condition.
Together, these standards transform compliance into a documentation and traceability challenge as much as an engineering one. The evidence matters as much as the outcome.
This is not a theoretical concern. Approximately 45-67% of quality audit failures among Tier 1 supplier entrants are linked to incomplete documentation, outdated risk assessments, or weak evidence of process capability, not product defects. The product may perform correctly. The documentation may not support it.
Fragmented, spreadsheet-based processes cannot generate the continuous, auditable evidence these standards require at scale.
When quality processes can’t keep up: the cost of standing still
The consequences of inadequate quality processes are measurable, public, and costly.
Recent years have seen software emerge as a leading root cause of automotive recalls. A major OEM recalled more than 250,000 SUVs for software-related issues and issued its largest recall of 2025 – over 1.4 million vehicles – for a backup camera fault. Another major OEM has faced multiple recall campaigns tied to software and battery issues across vehicle programs. These aren’t isolated incidents. They reflect a structural trend: as software defines more of the vehicles, software-driven failures define more of the recall landscape.
For quality leaders, these failures translate directly into the metrics that matter most: Cost of Poor Quality (COPQ), warranty claims rate, recall frequency and severity, and the brand damage that compounds each event. At mainstream ADAS scale, a single quality escape doesn’t affect a niche segment; it affects a significant share of new vehicle production.
The counterargument to process modernization is cost. That concern is legitimate but incomplete. The cost of a single ADAS-related recall at scale – financial, regulatory, and reputational – is far greater, and far more visible.
With Level 2 becoming the standard configuration rather than a feature tier, the margin for unsustainable quality processes is disappearing.
What a sustainable path forward looks like
Scaling quality alongside Level 2 adoption requires a deliberate shift: from fragmented, after-the-fact verification to continuous, traceable quality built into the product lifecycle. Several capabilities define this approach:
End-to-end traceability
Connects every requirement, design artifact, test, and result across mechanical, electrical, and software domains, not just within them.
Integrated requirements and test management
Ensures full validation coverage of safety-critical requirements and prevents coverage gaps from reaching production.
Continuous compliance
Maintains audit-ready evidence eves as OTA updates change the vehicle after SOP. Compliance cannot be a launch-gate activity when the vehicle keeps evolving.
A connected digital thread
Breaks down silos between hardware, software, and quality teams, enabling cross-functional visibility and faster root cause analysis.
The business case for this approach is well-documented. In a recent survey, nearly 70% of respondents reported improved product quality after adopting an integrated ALM-PLM strategy. The shift from siloed tools to a unified lifecycle framework produces measurable outcomes, not just process improvement.
Buyer’s guide: Integrating ALM and PLM
Discover how to select the best solution to accelerate the co-development of software and hardware for products.
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PTC’s integrated ALM, PLM, and CAD framework is built to enable exactly this kind of end-to-end traceability and lifecycle quality. By embedding compliance and validation into the development process rather than appending them at the end, PTC helps quality teams keep pace with the demands ADAS adoption places on their organizations.
Adapt your quality strategy before the curve catches up
Level 2 adoption is climbing from 40% towards 62%, and the safety-critical requirements, validation demands, and compliance documentation are scaling alongside it. Legacy quality processes – disconnected tools, manual documentation, and siloed teams – were not built for this environment. The scale of ADAS adoption makes them unsustainable, and the cost of standing still now outweighs the cost of change.
Two immediate steps are worth prioritizing:
Assess your current traceability and documentation process
Can they support continuous, audit-ready compliance across the vehicle’s operational life, including post-SOP OTA updates?
If the answer involves significant manual effort or spreadsheet management, that’s a gap to address.
Explore how an integrated ALM-PLM approach can embed quality across the lifecycle
The goal is not better tooling in isolation. It’s a connected process where every requirement, design decision, and test result is traceable from concept through field.
The vehicles being developed today will carry ADAS systems that operate in conditions that can’t be fully anticipated in a test lab. The quality processes governing them need to be built for that reality.
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