SDV: The New Smartphones on Wheels

There’s one topic on everyone’s lips in the auto industry right now: the Software-Defined Vehicle (SDV). This refers to a new development approach in which software-controlled functions take center stage in automotive development. This megatrend isn’t entirely new; most automakers have been working on SDV platforms—and on new models based on them—for quite some time.

An SDV is essentially a smartphone on wheels. It is based on powerful computing hardware, a real-time operating system, and a modular software architecture that is kept up to date via over-the-air updates. In the future, the vast majority of new car models will be designed and engineered using this development approach.

A Digital Nervous System

«You have to think of it as different layers,» explains Geoffrey Bouquot, Audi’s Chief Technical Officer. «You have the vehicle architecture—that is, a mechatronic platform, the chassis. In an electric car, you add battery technology to this chassis. On top of that comes the nervous system, which enables the creation of an interface between the vehicle’s various external and internal sensors, the data from which is processed by increasingly powerful computers.» This is referred to as an electrical/electronic architecture, or an E/E platform.

So while, up until now, numerous individual control units have each been responsible for clearly defined tasks, with the SDV, most of these tasks are consolidated into a single, powerful central computer. Functions run on it as software modules that communicate with one another and can be flexibly configured.

High investments, high profits

For automakers, this software revolution comes with high costs—and this comes right on the heels of the enormous investments required for the transition to electric mobility. The development of E/E platforms consumes vast sums of money, which is why manufacturers are forming new partnerships. Volkswagen, for example, is relying on the U.S. manufacturer Rivian in the West and Xpeng from China in the East for its SDV architecture.

But the SDV also opens up new business opportunities for automakers, since not only apps but also entire driving functions can be unlocked retroactively and thus sold. «Software is becoming one of the most important growth drivers for our company,» confirms General Motors CEO Mary Barra. The economic potential is considerable: industry analysts expect software-based automotive services to generate billions in revenue in the coming years.

For customers, the biggest advantage of the SDV is that their vehicle remains technically up to date in the digital age—similar to the software on their smartphone. In addition, this new software architecture enables increasingly complex driver-assistance systems, all the way up to Level 4 autonomous driving.

Fears of a decline in quality

But there is also a downside to this trend. Even though automakers consistently insist that the data collected from a vehicle is always handled with the utmost care and accuracy, privacy concerns are certainly warranted. Software bugs, security vulnerabilities, or dependencies on online services can create additional risks. There is also a fear that vehicles are no longer fully mature at the time of purchase, since functional defects can simply be fixed later via over-the-air updates. Various new electric models, particularly those from China, show that these concerns are entirely justified.

The transition to the software-defined vehicle is still in its early stages. Car manufacturers are currently investing billions in new software architectures, central computing systems, and the necessary cloud infrastructures, and are restructuring their traditional development processes accordingly. In the long term, however, the software-defined vehicle could be far more than just a digitally upgraded car. Experts see the SDV as a platform for fully autonomous mobility services—a moving sensor platform in the connected transportation systems of the future and, as such, a building block of smart cities.