The automotive industry is currently experiencing a transformative shift towards software-defined vehicles (SDVs) that integrate advanced connectivity and artificial intelligence (AI) technologies. A recent study indicates that while manufacturers previously prioritized data management and systems integration, the focus has shifted markedly towards harnessing AI and advanced software capabilities as critical drivers of innovation and functionality in modern vehicles.
Industry Survey Insights
Conducted by Sonatus and Wards Intelligence in March 2025, a comprehensive survey collected insights from 576 professionals across various sectors within the automotive industry, including manufacturers, Tier 1 and Tier 2 suppliers, consultants, and trade associations located in North America, Europe, and Asia. The findings were published in the report titled The State of Software-Defined Vehicles: Industry Perspectives and Market Trends.
One of the key revelations from this survey is the industry’s recognition of AI and software technology as essential for the evolution of the automotive sector. While AI is often highlighted for its role in enhancing infotainment systems—such as voice-activated assistants—the report emphasizes that its most impactful applications are now being developed for fundamental vehicle functions, a sentiment echoed by industry experts.
Preparing for Change: Readiness Gap
Despite widespread acknowledgment of the importance of SDVs, a significant readiness gap remains. Over 80% of respondents deemed SDVs critical for long-term success, yet only 23% felt “very prepared” for their integration. This disparity highlights the ongoing challenges faced by manufacturers as they transition into this new era of automotive technology. Interestingly, a more aligned sense of urgency was observed among automotive manufacturers in the Asia-Pacific and European regions compared to their North American counterparts.
The initial drive towards adopting SDVs has largely been propelled by over-the-air (OTA) updates, with most industry professionals affirming that this capability is already in place. Following OTA technology, many manufacturers are exploring continuous improvement and continuous integration practices to enhance their software offerings.
Interestingly, there are notable differences in how regions prioritize software capabilities versus AI. For instance, respondents from Asia appear to view software capabilities as even more pressing than AI, contrasting with perspectives from Europe and North America. Insights into projected implementation timelines reveal that AI will first be employed in advanced driver-assistance systems (ADAS), expected to roll out from 2026 to 2027, followed by applications in vehicle comfort and infotainment by 2028 to 2029. Organizational AI processes are also anticipated to commence in 2028, with a slower adoption pace noted in Asia-Pacific.
Regional Variances and Future Outlook
While this timeline is generally consistent across most regions, some explicit deviations were observed. Japan is expected to experience a significant delay in implementing AI in organizational processes. Conversely, Germany projects a later introduction of ADAS and AV applications by 2028 to 2029, diverging from the global expectation of 2026 to 2027. Furthermore, China demonstrates a reduced urgency regarding automated software certification, potentially influenced by a lesser focus on product longevity.
As the industry progresses, there is a growing consensus among experts that zonal architectures will dominate the electrical and electronic architecture landscape by 2030, though North America may lag in implementation. Additionally, a pronounced interest in open-source solutions, particularly concerning safety-critical domains like Linux, has emerged, representing a shift in the automotive industry’s approach to technology.
While the industry shows strong belief in the transformative potential of SDVs, financial viability remains a significant hurdle. The ability to monetize post-sale opportunities is seen as a potential benefit primarily for luxury and mid-range vehicles, yet mass-market manufacturers struggle to identify feasible monetization strategies. Current evaluations tend to prioritize bill of materials calculations over total cost of ownership considerations, hindering opportunities for maximizing the long-term financial returns of SDVs.
Strategic Implications
This ongoing evolution in the automotive sector lays the groundwork for a more connected, intelligent vehicular landscape. As manufacturers prepare for a future defined by SDVs, the integration of advanced software solutions and AI technologies will become increasingly crucial. However, addressing the readiness gap and financial concerns is essential for capitalizing on the potential that these innovations bring.
Quick Reference Table
| Aspect | Details |
|---|---|
| Survey Participants | 576 professionals from various automotive sectors |
| Critical for Long-term Success | 80% respondents agree SDVs are crucial |
| Preparation for SDVs | Only 23% feel “very prepared” |
| Initial Adoption Driver | Over-the-air updates |
| AI Implementation Timeline | ADAS: 2026-2027, Infotainment: 2028-2029 |
| Financial Viability Issues | Challenges in mass-market monetization |