The global automotive industry is speeding ahead with advanced connectivity systems, creating a booming market for software-defined vehicles (SDVs). Recent research reveals a major shift: while data management and systems integration were top priorities just a year ago, now it’s all about advanced software capabilities and artificial intelligence (AI). These technologies are quickly becoming crucial for SDVs.
A Sonatus survey by Wards Intelligence in March 2025 gathered insights from 576 participants, including manufacturers, suppliers, consultants, and trade associations from North America, Europe, and Asia. The findings are detailed in the report titled “The State of Software-Defined Vehicles: Industry Perspectives and Market Trends.”
Sonatus highlighted that the automotive sector views AI and software as essential for the next generation of vehicles, not just as add-ons. While AI often grabs headlines for features like voice assistants, the report emphasizes that the real potential lies in core vehicle functions.
However, there’s a gap in readiness. Over 80% of respondents see SDVs as critical for future success, yet only 23% feel “very prepared.” Although preferences for SDVs vary by region and position in the value chain, the overall consensus is tightening. Manufacturers in Asia-Pacific and Europe are more aligned and urgent compared to those in North America.
Initially, over-the-air updates kicked off software adoption in the industry, with most respondents confirming this feature is already in use. Continuous improvement and integration practices followed closely behind. Interestingly, respondents in Asia prioritize software capabilities over AI, differing from their counterparts in Europe and North America.
Looking ahead, respondents expect AI to roll out in phases. The first phase targets advanced driver-assistance systems (ADAS) and autonomous vehicles (AVs) between 2026 and 2027, with applications for infotainment and comfort features coming in 2028-2029. AI will begin integrating into organizational processes from 2028, though Asia-Pacific anticipates the latest adoption timeline.
Most countries align with these projections, but Japan expects a notably later adoption for AI in organizational processes. Germany also plans for ADAS/AV applications to debut later than the global forecast. Meanwhile, China shows less urgency in automated software certification, possibly due to milder concerns about product longevity. Respondents believe zonal architectures will dominate electrical and electronic architecture by 2030, but North America might see a slower implementation.
The survey also shows a growing interest in open-source solutions for critical safety areas, particularly Linux, compared to last year. Despite the automotive industry’s belief in the potential of SDVs, financial viability looms as the main hurdle for manufacturers aiming to scale this tech.
While there’s clear potential for post-sale monetization in luxury and some mid-range vehicles, carmakers haven’t yet found solid monetization strategies for mass-market vehicles. This may stem from a tendency to assess vehicle investments based solely on material costs, overlooking the long-term financial benefits of SDVs.