The growth of software-defined vehicles is set to upend the traditional relationship between auto makers and suppliers, according to a report released Sept. 12 by Deloitte.
Software-defined vehicles are expected to account for at least 90 percent of the new-vehicle market by 2029, up from only 2.4 percent in 2021, Deloitte said in the new study. Likewise, global revenue from over-the-air updates is expected to surge to about $14 billion by the end of the decade, compared with $3.3 billion in 2022.
Software-defined vehicles—those with software capabilities that continually improve over the vehicle's life cycle—present both a major opportunity and a pressing challenge for traditional automakers, said Chris Ahn, connected services and electrification leader at Deloitte Consulting L.L.P.
"It's a pretty significant paradigm shift for a lot of these auto makers," Ahn told Automotive News. "Once these traditional auto makers figure out how to navigate that paradigm shift, it's really going to change the game as far as the consumer experience of owning and operating a vehicle and experiencing mobility in itself."
That will require rethinking how those auto makers work with their supply base, with companies needing to become more collaborative and transparent with each other in order to boost the speed of software development, the report said