SDV Adoption On The Rise Due To Increasing Demand For Personalization And Connectivity

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Software-defined vehicles, poised to revolutionize the entire automotive industry, will empower consumers to integrate their digital lifestyles into their personalized vehicles effortlessly.

The global automotive industry is on the cusp of a major transformation, with the emergence of Software Defined Vehicles (SDVs) as the next megatrend. This shift is occurring in tandem with the increasing prevalence of electric vehicles (EVs). While the transition to EVs is already reshaping the automotive value chain worldwide, SDVs are poised to bring about an even more significant transformation.

SDVs are expanding the automotive ecosystem, attracting a broader range of stakeholders such as telecom operators, software and technology companies, and hardware providers. Traditionally, vehicle manufacturers and component makers have been the primary pillars of this globally interconnected industry.

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In the realm of SDVs, vehicles are designed around software, marking a fundamental departure from the traditional mechanical entity. According to Satish Sundaresan, Managing Director of Elektrobit India, SDVs reimagine vehicles as software-centric platforms. Original Equipment Manufacturers (OEMs) define specific features for various models and connect them through a unified software platform. This approach enables the modification of software to enhance vehicle functionalities.

The key driving force behind this monumental shift towards SDVs is the growing consumer demand for personalization and connectivity. SDVs are entirely consumer-focused, allowing individuals to seamlessly integrate their digital lifestyles into their vehicles. Sundaresan envisions SDVs as digital devices that facilitate a seamless transition between cars, smartphones, and homes, providing a unified digital experience.

In this evolving landscape, chip manufacturers are set to play a pivotal role. With an increased reliance on electronics and semiconductors within SDVs, chip manufacturers will become influential determinants of the industry’s trajectory. Sundaresan asserts that automakers, Tier-1 suppliers, telecom companies, and chip manufacturers will emerge as key stakeholders in this transition, with chip manufacturers wielding significant control over the types of chips used in vehicles. This shift is gradually transferring control from automotive OEMs to chip manufacturers, altering the dynamics of the industry.

Economies of scale, a critical factor in the traditional automotive ecosystem, will lose some of their significance in the SDV world. Tier-1 suppliers are expected to transition from being systems suppliers to providing engineering or built-to-print services. As more players, including telecom and software companies, enter the automotive value chain, OEM margins are likely to shrink, prompting them to explore alternative revenue streams.

The emergence of SDVs will also reshape the relationships between vehicle owners and their cars. Customers will increasingly pay for the activation of specific features that come pre-equipped with the necessary hardware. Features like predictive maintenance and online maps for live traffic are expected to gain traction, and consumers will be willing to invest in such capabilities. However, a challenge for the automotive industry will be recovering upfront technology investments, especially in software, as SDV software requires frequent updates. This presents a challenge, given that SDVs need to maintain a 15-year service life.

Despite these challenges, Sundaresan believes that India is well-positioned to become a global hub for SDV development. India’s expertise in software development and manufacturing will play a crucial role in shaping the future of SDVs, from software development to the production of components and complete vehicles. India is poised to be at the forefront of the global SDV transformation.

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