Software-defined Vehicle Market

Software-defined Vehicle Market by Offering (Hardware, Software, Services), Vehicle Type (ICE, BEV, HEV/PHEV), Vehicle Autonomy (Level 0, Level 1, Level 2, Level 3, Level 4, Level 5), Application and Region - Global Forecast to 2028

Report Code: SE 8783 Sep, 2023, by

[190 Pages Report] According to MarketsandMarkets, the software-defined vehicle market is projected to grow from USD 270.9 billion in 2023 to USD 419.7 billion by 2028, registering a CAGR of 9.1% during the forecast period. The enforcement of stringent vehicle safety regulations and continued development of connected vehicles are expected to propel the software-defined vehicle market in the next five years. However, high initial investments and connected vehicle research costs is likely to pose challenges for industry players.

The objective of the report is to define, describe, and forecast the software-defined vehicle market based on offering, vehicle type, vehicle autonomy, application, and region.

Software-defined Vehicle Market

Software-defined Vehicle Market

Software-defined Vehicle Market Forecast to 2028

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Software-defined vehicle market dynamics

Driver: Enforcement of stringent vehicle safety regulations

Safety features have become a requirement for automotive consumers worldwide. The growing concern about vehicle safety and government regulations drives the software-defined vehicle market. As vehicles become increasingly complex and connected, safety features that can be updated over the air (OTA) are becoming more necessary.

SDVs offer this flexibility as they can be updated with new software and features without going to a dealership. This is crucial for safety because automakers can quickly deploy fixes for software vulnerabilities or add new safety features. Government regulations also boost the adoption of SDVs. For example, in the US, the National Highway Traffic Safety Administration (NHTSA) requires automakers to equip all new vehicles with automatic emergency braking (AEB) by 2023.

Restraint: High initial investments and connected vehicle research costs

Integrating complex software systems into vehicles requires seamless coordination between components and subsystems. Ensuring interoperability and reliability across different software modules can be challenging. As vehicles become more complex and reliant on software systems, integrating various components and ensuring seamless collaboration between different software modules can present several challenges, including compatibility issues, real-time responsiveness, data exchange and security, and many more. Moreover, high initial investment costs linked with intelligence, expensive research costs, and so on are barriers to market growth.

Opportunities: Emergence of ride-hailing and mobility-as-a-service platforms

The emergence of ride-hailing, car-sharing, and mobility-as-a-service (MaaS) platforms presents significant opportunities for the software-defined vehicle market. These new mobility models rely heavily on advanced software systems to optimize fleet management, enhance user experience, and enable efficient transportation services. Connected autonomous car technology is quickly evolving. Several companies focus on this technology, with Tesla leading the way. Autonomous self-driving vehicles are expected to create an opportunity for ride-sharing and mobility services.

Challenges: Data Security and Privacy Concerns

The shift towards a software-defined vehicle is rapidly accelerating but comes with challenges. The software complexity growth has surpassed all predictions, and safety and cybersecurity have become major concerns. Despite the significant advancement in connected car technology, cybersecurity remains a major hurdle. Connected cars consist of hardware, software, mobile apps, and Bluetooth, and these components are vulnerable to cyberattacks. There have been several instances where cybersecurity breaches have caused problems. For example, in 2021, luxury car brands Volkswagen (Germany) and Audi AG (Germany) were hit by a data breach that exposed contact details and, in some cases, personal information like driver’s license numbers in the US and Canada.

Market Map/Ecosystem

Software-defined Vehicle Market by Ecosystem

Software-defined vehicle Market: Key Trends

The prominent players in the software-defined vehicle market are Robert Bosch GmbH (Germany), Nvidia Corporation (US), APTIV (Ireland), Valeo (France), Marelli Holdings Co., Ltd. (Japan), Continental AG (Germany), Volkswagen Group (Germany), HARMAN International (US), BlackBerry Limited (US), among others. These companies boast mixing trends with a comprehensive product portfolio and strong geographic footprint.

BEV is expected to grow at the highest CARG in the software-defined vehicle market during the forecast period.

The BEV is expected to account for a significant share and grow at the highest CAGR during the forecast period. Several companies, such as Tesla (US), Volkswagen (Germany), General Motors (US), and Aptiv (Ireland), are leading the way in developing and producing BEVs with various software. For instance, General Motors (US) announced Ultifi, an end-to-end software platform designed to unlock new vehicle experiences and connect customers’ digital experiences. In addition, governments provide incentives for purchasing BEVs, such as tax breaks and rebates, allowing the development of cost-effective BEVs for consumers.

Software is expected to grow at the highest CARG in the software-defined vehicle market in 2023.

The software segment is expected to account for a significant share and grow at the highest CAGR during the forecast period. The software segment is divided into four subsegments: automotive operating systems, middleware & hypervisors, application software, and cybersecurity. This software plays a crucial role in shaping the behavior, capabilities, and user experience of modern vehicles. Major players in the software market include Aptiv, ZF Friedrichshafen AG, and Intel Corporation. The continued rise of cockpit domain controllers, changing in-vehicle infotainment, and growing ADAS (autonomous driver assistant system) feature adoption highlight the importance of software products and solutions.

The software-defined vehicle market is expected to grow at the highest CAR in India from the Asia Pacific region during the forecast period.

The Asia Pacific region continues to be a significant market for software-defined vehicles. This region is a key market as it is home to some of the major industry players, such as Marelli Holdings Co., Ltd. (Japan). The e-mobility industry in India is developing rapidly with the support of the government and manufacturers such as Mahindra and Mahindra (India), Tata (India), and others. The government of India is supporting the development of electric infrastructure with various plans. For instance, the National Electric Mobility Mission Plan (NEMMP)-2020 aims to invest INR 140 billion in the next eight years for the development of electric infrastructure. Government incentives subsidies and initiatives from OEMs would help to reduce the cost of electric vehicles, which in turn would drive the demand for software-defined vehicles in the Indian market.

Software-defined Vehicle Market by Region

Software-defined Vehicle Market by Region

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Key market players

Major vendors in the software-defined vehicle companies include Robert Bosch GmbH (Germany), Nvidia Corporation (US), APTIV (Ireland), Valeo (France), Marelli Holdings Co., Ltd. (Japan), Continental AG (Germany), Volkswagen Group (Germany), Tesla (US), HARMAN International (US), BlackBerry Limited (US), among others.

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Scope of the Report

Report Metric


Market Size Available for Years


Base Year


Forecast Period



Value (USD Million/USD Billion)

Segments Covered

Offering, Vehicle Type, Vehicle Autonomy, Application, and Region

Regions Covered

North America, Europe, Asia Pacific, and RoW

Companies Covered

Robert Bosch GmbH (Germany), Nvidia Corporation (US), APTIV (Ireland), Valeo (France), Marelli Holdings Co., Ltd. (Japan), Continental AG (Germany), Volkswagen Group (Germany), Tesla (US), HARMAN International (US), BlackBerry Limited (US), among others
A total of 25 players are profiled in the report.

Software-defined Vehicle Market Highlights

This report categorizes the software-defined vehicle market based on offering, vehicle type, vehicle autonomy, application, and region.



By Offering

  • Hardware
  • Software
  • Services

By Vehicle Type

  • ICE
  • BEV

By Vehicle Autonomy

  • Level 0
  • Level 1
  • Level 2
  • Level 3
  • Level 4
  • Level 5

By Application

  • Powertrain & Chassis
  • Body and Energy
  • Infotainment
  • Connectivity & Security

By Region

  • North America
    • US
    • Canada
    • Mexico
  • Europe
    • Germany
    • UK
    • France
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • Rest of Asia Pacific
  • RoW
    • Middle East & Africa
    • South America

Recent Developments

  • In May 2023, Robert Bosch GmbH (Germany) and Plus (US) are collaborating to make software-defined commercial trucks a reality. Through a new technology agreement, Plus is offering its PlusDrive solution with the integrated steering system from Bosch featuring hardware and software to deliver driver assistance and partially automated features to commercial vehicles.
  • In March 2023, Continental AG's (Germany) new electrics/electronics architecture which uses Infineon’s high-end Aurix TC4 microcontroller paves the way for speedier development of software-defined vehicles; RRAM technology, used in chip cards, now applied in the automotive sector.

Frequently asked questions

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    1.1. Objective of the Study 
    1.2. Market Definition 
    1.3. Inclusions and Exclusions 
    1.4. Study Scope 
           1.4.1. Markets Segmentation
           1.4.2. Regional Scope
           1.4.3. Years Considered for the Study
    1.5. Currency  
    1.6. Limitations 
    1.7. Stakeholders 
    1.8. Summary of Change 
           1.8.1. Recession Impact
    2.1. Introduction 
           2.1.1. Secondary Data
           Key data from secondary sources
           2.1.2. Primary Data
           Key data from primary sources
           Key industry insights
           Breakdown of primaries
    2.2. Market Size Estimation 
           2.2.1. Bottom-Up Approach
           2.2.2. Top-Down Approach
    2.3. Market Breakdown & Data Triangulation  
    2.4. Research Assumptions 
    2.5. Risk Assessment 
    2.6. Recession Impact 
    5.1. Introduction 
    5.2. Market Dynamics 
           5.2.1. Drivers
           5.2.2. Restraints
           5.2.3. Opportunities
           5.2.4. Challenges
    5.3. Value Chain Analysis 
    5.4. Ecosystem/Market Map 
    5.5. Average Selling Pricing Analysis 
           5.5.1. ASP Trends
           5.5.2. ASP OF KEY PLAYERS
           5.12.1. REGULATIONS
6 Software-Defined Vehicle Market, by Offering 
    6.1. Introduction 
    6.2. Software 
           6.2.1. Automotive Operating System (OS)
           6.2.2. Middleware & Hypervisor
           6.2.3. Application Software
           6.2.4. Cybersecurity
    6.3. Hardware 
           6.3.1. ECU/DCU
           6.3.2. Sensor/Actuators
           6.3.3. Power Electronics 
           6.3.4. Others (Display, speaker etc)
    6.4. Services  
           6.4.1. Integration Services 
           6.4.2. Connected Services
7 Software-Defined Vehicle Market, by Vehicle Type 
    7.1. Introduction 
    7.2. ICE 
    7.3. BEV 
    7.4. HEV/PHEV 
8 Software-Defined Vehicle Market, by Application 
    8.1. Introduction 
    8.2. Powertrain & Chassis 
    8.3. ADAS/HAD 
    8.4. Body and Energy  
    8.5. Infotainment 
    8.6. Connectivity & Security 
    8.7. Others  
9 Software-Defined Vehicle Market, By Vehicle Autonomy 
    9.1. Introduction 
    9.2. Level 0 
    9.3. Level 1 
    9.4. Level 2 
    9.5. Level 3 
    9.6. Level 4 
    9.7. Level 5 
10 Geographic Analysis  
     10.1. Introduction 
     10.2. North America 
             10.2.1. Recession Impact 
             10.2.2. US
             10.2.3. Canada
             10.2.4. Mexico
     10.3. Europe 
             10.3.1. Recession Impact 
             10.3.2. UK
             10.3.3. Germany
             10.3.4. France
             10.3.5. Italy
             10.3.6. Spain
             10.3.7. Rest of Europe
     10.4. Asia Pacific 
             10.4.1. Recession Impact 
             10.4.2. China
             10.4.3. India
             10.4.4. Japan
             10.4.5. Rest of APAC
     10.5. RoW 
             10.5.1. Recession Impact 
             10.5.2. South America 
             10.5.3. Middle East & Africa 
     11.1. Introduction 
     11.2. Revenue Analysis of Top Players  
     11.3. Strategies Adopted by Key Players 
     11.4. Market Share Analysis  
     11.5. Key Player Segmentation 
             11.5.1. Stars
             11.5.2. Pervasive Players
             11.5.3. Emerging Leaders
             11.5.4. Participants
     11.6. Company Footprint 
     11.7. SME Player Segmentation 
             11.7.1. Progressive Companies
             11.7.2. Responsive Companies
             11.7.3. Dynamic Companies
             11.7.4. Starting Blocks
     11.8. Competitive Situations and Trends 
     11.9. Detailed List of Key Startups/SMES 
     11.10. Competitive Benchmarking of Key Startups/SMES 
     12.1. Introduction 
     12.2. Key Players 
             12.2.1. Tesla 
             12.2.2. Bosch
             12.2.3. NVIDIA
             12.2.4. APTIV
             12.2.5. VALEO
             12.2.6. MARELLI
             12.2.7. CONTINENTAL 
             12.2.8. VOLKSWAGEN 
             12.2.9. HARMAN 
             12.2.10. BLACKBERRY
     12.3. Other Players 
             12.3.1. ZF Friedrichshafen AG
             12.3.2. Lear Corporation
             12.3.3. SIBROS
             12.3.4. SIEMENS
             12.3.5. NXP
             12.3.6. ANALOG DEVICES
             12.3.7. INTEL
             12.3.8. RENESAS
             12.3.9. QUALCOMM 
             12.3.10. Arm Ltd
             12.3.11. Renault Group
             12.3.12. General Motors
             12.3.13. Amazon
             12.3.14. KPIT
             12.3.15. Vector Informatik GmbH
13 Appendix  
     13.1. Insights of Industry Experts  
     13.2. Discussion Guide 
     13.3. Knowledge Store: MarketsandMarkets’ Subscription Portal 
     13.4. Available Customizations 
     13.5. Related Reports 
     13.6. Author Details 
Note: This ToC is tentative and minor changes are possible as the study progresses.  

The research process for this study included systematic gathering, recording, and analysis of data about customers and companies operating in the software-defined vehicle market. This process involved the extensive use of secondary sources, directories, and databases (Factiva, Oanda, and OneSource) for identifying and collecting valuable information for the comprehensive, technical, market-oriented, and commercial study of the software-defined vehicle market. In-depth interviews were conducted with primary respondents, including experts from core and related industries and preferred manufacturers, to obtain and verify critical qualitative and quantitative information as well as to assess growth prospects. Key players in the software-defined vehicle market were identified through secondary research, and their market rankings were determined through primary and secondary research. This research included studying annual reports of top players and interviewing key industry experts such as CEOs, directors, and marketing executives.

Secondary Research

In the secondary research process, various secondary sources were referred to for identifying and collecting information important for this study. Secondary sources included corporate filings, such as annual reports, investor presentations, and financial statements; trade, business, and professional associations; white papers; software-defined vehicle products-related journals; certified publications; articles by recognized authors; directories; and databases.

Secondary research was conducted to obtain key information about the industry supply chain, market value chain, key players, market classification and segmentation as per industry trends to the bottom-most level, geographic markets, and key developments from both market- and technology-oriented perspectives. Data from secondary research was collected and analyzed to determine the overall market size, which was further validated by primary research.

Primary Research

In the primary research process, various primary sources from the supply and demand sides were interviewed to obtain qualitative and quantitative information for this report. Primary sources from the supply side included industry experts such as CEOs, VPs, marketing directors, technology & innovation directors, and key executives from major companies in the software-defined vehicle market.

After going through market engineering (which includes calculations for market statistics, market breakdown, market size estimations, market forecasting, and data triangulation), extensive primary research was conducted to gather information and verify and validate the critical numbers obtained. Primary research was conducted to identify segmentation types, industry trends, key players, competitive landscape, and key market dynamics such as drivers, restraints, opportunities, and challenges, along with the key strategies adopted by players operating in the market.

Software-defined Vehicle Market Size, and Share

To know about the assumptions considered for the study, download the pdf brochure

Market size Estimation

In the complete market engineering process, both top-down and bottom-up approaches were used, along with several data triangulation methods, to estimate and forecast the size of the market and its segments and subsegments listed in the report. Extensive qualitative and quantitative analyses were carried out on the complete market engineering process to list the key information/insights pertaining to the software-defined vehicle market.

The key players in the market were identified through secondary research, and their rankings in the respective regions were determined through primary and secondary research. This entire procedure involved the study of the annual and financial reports of top players, as well as interviews with industry experts such as chief executive officers, vice presidents, directors, and marketing executives for quantitative and qualitative key insights. All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources. All parameters that affect the markets covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data was consolidated and enhanced with detailed inputs and analysis from MarketsandMarkets and presented in this report.

Software-defined vehicle market: Bottom-up Approach

Software-defined Vehicle Market Size, and Bottom-up Approach

Software-defined vehicle market: Top-down Approach

Software-defined Vehicle Market Size, and Top-down Approach

Data Triangulation

After arriving at the overall size of the software-defined vehicle market from the market size estimation process explained above, the total market was split into several segments and subsegments. Where applicable, the market breakdown and data triangulation procedures were employed to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The data was triangulated by studying various factors and trends from both the demand and supply sides. Along with this, the market size was validated using top-down and bottom-up approaches.

Market Definition

A software-defined vehicle (SDV) is a concept in the automotive industry that represents a significant shift in the way vehicles are designed, built, and operated. In an SDV, much of the vehicle’s functionality and behavior is defined and controlled by software rather than being hardwired or mechanically controlled. This software-centric approach enables greater flexibility, adaptability, and upgradability in vehicles.

Software-defined vehicles are the next evolution of the automotive industry. They are the foundation of many other advancements, including self-driving and connected cars. With increased automation and electrification and a growing focus on user experience, the automotive industry witnessed major disruption. A high-end car has more than 100 billion lines of code, and new features and business opportunities continue to be powered by software upgradability.

Key Stakeholders

  • ADAS system manufacturers
  • Raw material suppliers for system manufacturers
  • Sensor manufacturers
  • Semiconductor manufacturers
  • Research institutes and government organizations
  • Automotive electronic system traders, distributors, and suppliers
  • Automobile manufacturers
  • Automotive sensor manufacturers
  • Automotive software manufacturers and providers
  • Autonomous vehicle manufacturers
  • ICE/EV/HEV component manufacturers
  • ICE/EV/HEV distributors and retailers
  • ICE/EV/HEV manufacturers
  • Automobile industry and regional automobile associations

Report Objectives

  • To define, describe, and forecast the software-defined vehicle market based on offering, vehicle type, vehicle autonomy, application, and region
  • To forecast the sizes of various segments with respect to four major regions—
    North America, Europe, Asia Pacific, and RoW (Rest of the World)
  • To provide a detailed analysis of the software-defined vehicle supply chain
  • To analyze the impact of the recession on the software-defined vehicle market
  • To strategically analyze the micro markets with respect to individual growth trends and prospects and their contributions to the overall market
  • To analyze competitive developments, such as expansions, agreements, partnerships, acquisitions, product developments, and research and development (R&D), in the software-defined vehicle market
  • To analyze the opportunities for market players and provide details of the competitive landscape of the market
  • To benchmark the market players using the proprietary company evaluation matrix framework, which analyzes the market players on various parameters within the broad categories of business strategy excellence and strength of product portfolios
  • To strategically profile the key players and comprehensively analyze their market positions in terms of ranking and core competencies, along with a detailed competitive landscape of the market.

Available Customizations

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Product analysis

  • Detailed analysis and profiling of additional market players

The following customization options are available for the report:

  • Market sizing and forecast for additional countries
  • Additional five companies profiling
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Report Code
SE 8783
Published ON
Sep, 2023
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