The Software Defined Vehicle Race

The Software Race: The Rise of Software Defined Vehicles and Chinese OEM’s

The automotive industry is amid a seismic shift, with software becoming a driving force behind innovation and competitiveness. This transition from traditional manufacturing to a software-centric approach has given rise to a new kind of automotive era: The Software Race. Tesla first started this race around a decade ago but now Chinese Original Equipment Manufacturers (OEMs) are making waves with the Software Defined Vehicle (SDV) which combines hardware with software to reach new levels of performance excellence.

Why Software Defined Vehicles?

In the MHP 2023 study, 70% of UK customers buying a car in the next 5 years value new vehicle features (such as infotainment, assistance systems, connectivity) in their purchase. This means that additional software features that enhance the customers’ experience in the car play a vital role in purchasing decisions. Cars that can offer more for the customer in this area will lead this race.

There are several reasons why software is becoming critical in the development of vehicles:

• Modern vehicles are equipped with an array of software-driven features, from Advanced Driver Assistance Systems (ADAS) to infotainment and connectivity.
• Software can enable autonomous driving and connected mobility solutions as well as expandable ecosystems that facilitate the emergence of new business models. This integration will also generate additional revenue streams for the OEMs.
• ?SDVs are the key to remaining competitive in the long term.
• Customers have increasingly high expectations from their vehicles. Features such as autonomous driving features, high connectivity, and user-friendly interfaces provide a comfortable and convenient driving experience ranking high on customers lists.
• SDVs can support sustainability in the automotive industry especially with growing demands for electric and eco-friendly options.
• SDVs contribute to the development of Security and Safety such as accident prevention systems and improved crash protection.

Can traditional OEM’s catch up?

With the way things are currently moving, SDVs are ahead in the race. They operate from the idea of the car as a computer. This means that there is flexibility in the development, gives the ability for continuous updates in the software and options for customisability.

Traditionally the automotive industry was reliant on mechanical engineering and manufacturing expertise to develop and produce cars. Traditional OEMs rely on the hardware element in their development. The challenge this poses when developing smarter vehicles is that they rely on the use of distributed architecture with hundreds of Electronic Control Units (ECU) from different suppliers with different software components. This makes updates more complex and is time consuming.

If traditional OEM’s want to catch up in the SDV race, there are several options they should consider, including:

• ?Shifting their mindset to become more flexible in their development and move from a "fixed functions" to a dynamic and agile "always updatable" model.
• Changing their way of working and move towards system engineering.
• Focusing on the vehicle as a system and adapt customer experience around it.
• Developing a software powerhouse and continuous improvement around the clock.

How can MHP UK support OEMs in this area?

The idea of SDVs is revolutionising the automotive industry by turning cars into smart computers. This seismic shift creates opportunities for new revenue streams and customised environments. However, the transition from traditional automotive models to SDVs is challenging. The success of OEMs in this evolving area will depend on how quickly they can adapt. OEMs need to balance traditional vehicles with SDVs to meet the demands of customers both now and in the future. As we move forward, there will be a global transformation of the automotive industry and the role of the UK OEM.

With our high level of experience and expertise in the domains of SDVs, MHP can help OEMs in this race to achieve operational and performance excellence for their vehicles.

To read the whole study, please feel free to download your copy here: https://www.mhp.com/en/insights/what-we-think/the-software-race-are-chinese-automakers-leading-the-pack-in-the-software-race

If you are interested in joining the SDV race, please reach out to us at MHP UK here: [email protected]