Automotive Software: The Backbone of Tomorrow's Vehicle Ecosystem

As the automotive industry evolves, software is becoming the cornerstone of innovation, transforming vehicles into highly connected, intelligent systems. Today’s cars are no longer just mechanical machines; they’re sophisticated digital platforms that rely on advanced software for everything from autonomous driving and advanced safety features to seamless infotainment and real-time diagnostics. Automotive software serves as the backbone of this ecosystem, enabling vehicles to communicate, adapt, and improve over time. As we move toward a future of smart, electric, and autonomous mobility, the role of automotive software will only grow, shaping the next generation of transportation with enhanced safety, efficiency, and connectivity.

The global automotive software market is projected to grow from USD 19.0 billion in 2023 to USD 32.3 billion by 2030, at a CAGR of 7.8%, during the forecast period 2023 to 2030.

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The amount of software in vehicles has increased exponentially with the growing demand for automotive safety and convenience. This is evident from software used across various new-gen automotive applications, including ADAS/AD, advanced navigation systems, intelligent infotainment systems, and connectivity. New and legacy OEMs are developing their future vehicle lineup using a software-first approach. They have also announced plans to develop specialized software to create new revenue streams based on add-on features for a more customized driving experience.

Developments in automated driving and software-defined vehicles

Automakers have started providing automated driving and vehicle safety systems in their vehicles in recent years. This is mainly led by regulations for vehicle safety systems and increasing demand for safer vehicles. This trend has led to over 60% of newly sold vehicles in the US having Level 2 ADAS systems and over 80% coming with at least basic ADAS features in 2023. A similar trend is seen across China, South Korea, Japan, and most European countries. These systems’ function based on inputs from various vehicle sensors, combining their inputs for vehicle and pedestrian safety. During the process, a vast amount of data is generated for implementing such decisions with algorithms in the vehicle's computer system. Hence, automotive software is the key to implementing advanced driver assistance systems in vehicles.

Operating system segment is expected to have significant share in the global automotive software market

The operating system is expected to be a noticeable segment in the automotive software market, as it controls the core capabilities of the vehicle while keeping passengers and the driving environment safe, which makes it the most important part of the software. Additionally, the automotive operating system market is expected to grow significantly with the growing adoption of connected car technologies. As such, operating system (OS) plays a critical role in connected vehicles. The OS provides the platform for the telematics system to run on and provides the features and functionality that allow the vehicle to communicate with other devices and services.