What Fueled The Previous Growth In The Software Defined Vehicles Market?
The software defined vehicles market has seen considerable growth due to a variety of factors.
• The market for software-defined vehicles has experienced swift expansion in the past few years. The market size is predicted to escalate from $55.16 billion in 2024 to $65.42 billion in 2025, with a compound annual growth rate (CAGR) of 18.6%.
The significant growth during the historic period is the result of improvement in embedded systems, an increase in consumer interest for connected vehicles, the integration of over-the-air (ota) updates, the transition to electric and hybrid vehicles, and regulatory focus on vehicular safety.
What Can Be Expected from the Software Defined Vehicles Market Size?
The software defined vehicles market is expected to maintain its strong growth trajectory in upcoming years.
• Rapid expansion is anticipated in the software-defined vehicles market size over the coming years, with a projected growth to $127.01 billion in 2029, representing a compound annual growth rate (CAGR) of 18.0%.
This growth during the forecast period owes much to the implementation of 5g connectivity, the emerging mobility-as-a-service (MaaS) model, the integration of augmented reality (AR) into vehicles, increasing demands for personalized and context-aware services, and regulatory initiatives for emission reduction. The forecast phase is also set to see continued partnerships for ecosystem evolution, a heightened focus on cybersecurity, development of self-driving technologies, a shift towards software-defined structures, and a concentration on user experience (UX).
What Are the Critical Driver Fuelling The Software Defined Vehicles Market's Growth?
The growth of the software-defined vehicle market is poised to be driven by the surging demand for electrified and autonomous cars. Electric vehicles (EVs) are vehicles propelled by one or several electric engines, which can draw power from various sources, including a standalone battery or grid supply. On the other hand, an autonomous vehicle or self-driving car operates independently without any human intervention. The shift towards software-defined vehicles symbolizes a move towards centralizing the electronic and electrical systems of vehicles, thereby offering a smoother integration of new features throughout the vehicle's life span. For instance, the International Energy Agency, a France-based intergovernmental organization, reported that the electric car market showed a rapid surge in March 2023, with the number of sales exceeding 10 million in 2022. Electric vehicles constituted 14% of the total new car sales in 2022, an impressive increase from nearly 9% the previous year. Additionally, G2.com Inc., an American IT and internet company, stated in January 2022 that the global autonomous vehicle market was growing at a yearly rate of 16% with over 1,400 self-driving vehicles, including cars and trucks, undergoing test runs. Hence, the surging demand for electrified and autonomous vehicles is one of the key growth drivers for the software-defined vehicle market.
Software-Defined Vehicles Market Driver: Growing Demand For Commercial Vehicles Fuels The Software-Defined Vehicle Market Growth
How Is The Software Defined Vehicles Market segmented?
The software-defined vehicles market covered in this report is segmented –
1) By Propulsion: ICE Vehicles, Electric Vehicles
2) By Vehicle Type: Passenger Car, Commercial Vehicles
3) By Level Of Autonomy: Level 1, Level 2, Level 3, Level 4, Level 5
4) By Application: ADAS And Safety, Connected Vehicles Services, Autonomous Driving, Body Control And Comfort System, Powertrain System
Subsegments:
1) By ICE Vehicles (Internal Combustion Engine): Gasoline-Powered Vehicles, Diesel-Powered Vehicles
2) By Electric Vehicles: Battery Electric Vehicles (BEVs), Hybrid Electric Vehicles (HEVs), Plug-In Hybrid Electric Vehicles (PHEVs)
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Which Emerging Market Trends Are Altering The Software Defined Vehicles Industry?
Prominent companies in the software-defined vehicles sector are focusing on developing technologically superior products such as DRIVE Thor to cater to the needs of their current customers better. DRIVE Thor is a futuristic system-on-a-chip for autonomous vehicles designed to merge all smart car functions into a single AI computer. For example, in September 2022, NVIDIA Corporation, an American technology company known for designing and manufacturing graphics processing units, rolled out DRIVE Thor. This innovative centralized system is designed for secure and safe self-driving vehicles. With a performance rating of up to 2,000 teraflops, DRIVE Thor integrates smart features like automated and assisted driving, parking, driver and person monitoring, digital instrument cluster, in-car entertainment, and backseat entertainment into one structure, improving overall efficiency and reducing system cost. This next-gen super chip comprises advanced AI functionalities first introduced in NVIDIA's Hopper Multi-Instance GPU architecture, along with the NVIDIA Grace CPU and NVIDIA Ada Lovelace GPU. DRIVE Thor's MIG support for images and computation permits in-vehicle infotainment and advanced driver-assistance systems to operate in domain isolation, consequently allowing time-sensitive operations to run without interruption.
Who Are the Key Players In The Software Defined Vehicles Market?
Major companies operating in the software-defined vehicles market report are:
• Volkswagen AG
• Toyota Motor Corporation
• Stellantis N.V.
• Mercedes-Benz Group AG
• Ford Motor Company
• General Motors Company
• Bayerische Motoren Werke AG
• Honda Motor Co. Ltd.
• Hyundai Motor Group
• Robert Bosch GmbH
• Tesla Inc.
• Kia Corporation
• Renault Group
• Volvo Group
• Qualcomm Incorporated
• Continental AG
• Tata Motors Ltd.
• Suzuki Motor Corporation
• Nvidia Corporation
• ZF Friedrichshafen AG
• BYD Co. Ltd.
• Valeo S.A.
• Aptiv PLC
• Harman International Industries
• BlackBerry Limited
• Jaguar Land Rover Automotive PLC
• Marelli Holdings Co. Ltd.
• Green Hills Software Inc.
• Airbiquity Inc.
• Sonatus Inc.
What Is The Most Dominant Region In The Software Defined Vehicles Market?
North America was the largest region in the software-defined vehicles market in 2024. The regions covered in the software-defined vehicles market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
