The changing landscape of automotive manufacturing
Automotive manufacturers and automakers are undergoing one of the most transformative shifts in its history, fueled by the rapid rise of software-defined vehicles (SDVs). This evolution is revolutionizing the design, development, and manufacturing of cars, unleashing unprecedented opportunities for innovation, efficiency, and improved customer experience. To understand the magnitude of this shift, it is essential to trace its origins and explore the timeline that has led the industry towards software-defined vehicles.
Historically, vehicles were simply a way to transport people from one location to another. Innovation in the automotive sector was largely hardware driven, focused on enhancing the performance and reliability of engines, powertrains, and vehicle bodies. Over time, customer demand for increased comfort and convenience led to the introduction of various electronic components, starting with basic amenities like radios and progressing to advanced systems such as Advanced Driver Assistance System (ADAS). These electronic devices – many of which developed organically based on consumer needs – gradually became standard across the industry.
Today, a modern vehicle coming off of the line may have as many as 50 distinct electronic modules, interconnected through a network architecture that has evolved over the past few decades. While these electronic control units (ECUs) provide enhanced features and capabilities, they also add significant complexity to vehicle engineering and manufacturing. The past two decades saw the introduction of IoT (Internet of Things) technology, which gave birth to connected vehicles. Initially, connectivity was used to differentiate products and offer additional conveniences to customers, but its true value lay in enabling manufacturers to remotely update the software on these electronic modules.
Streamlined software testing
Over time, managing remote updates across a network of multiple ECUs proved highly complex due to the intricacies of in-vehicle communication networks. The industry soon recognized that the organic growth of these electronic components contributed to the complexity of the vehicle architecture. To address this, automakers shifted toward hardware centralization, adopting centralized compute platforms to simplify vehicle architecture and streamline operations.
Centralized compute platforms paved the way for the next step in automotive evolution: software abstraction. As automakers no longer needed to source individual ECUs from suppliers, they instead focused on developing software that could run on a unified, centralized computing system. This marked the beginning of SDVs, where software became the backbone of vehicle functionality.
The centralization of compute hardware also drove the need for virtualization, allowing multiple software stacks to run on a single hardware platform, eliminating the need for numerous physical modules. This shift offers significant advantages for automakers. Not only does it reduce hardware costs, but it also promises more efficient and streamlined software testing and validation processes, with up to 70 percent of automotive software testing and validation now being able to be conducted without any physical hardware, further accelerating the shift toward cloud-based development.
Migrating software development to the cloud allows manufacturers to establish virtualized software environments well in advance of the availability of centralized hardware. Once the hardware is ready, the software can be seamlessly deployed through Continuous Integration/ Continuous Deployment (CI/CD) pipelines. This approach, known as ‘shifting left’ in the industry, accelerates both software validation and the overall manufacturing process.
Championing collaboration 
In traditional automotive manufacturing, the ‘System V’ approach delays validation until after development and hardware assembly, pushing testing to the end of the production timeline. In contrast, cloud-based CI/CD pipelines allow for earlier validation, significantly cutting time and costs for automakers. These efficiencies have the ability to potentially shorten production timelines by up to a year, yielding substantial cost savings and faster market entry for new models.
The transition to SDVs affects not just automakers but the entire supply chain. With the consolidation of hardware, suppliers are increasingly tasked with developing software for centralized systems rather than individual modules. This evolution requires stronger collaboration between automakers and suppliers to ensure seamless integration and innovation.
While standards bodies are promoting technical collaboration, commercialization continues to pose a significant challenge. A study by Roland Berger found that 67 percent of automotive stakeholders view software commercialization as the primary barrier to the adoption of SDVs, outweighing technical and operational obstacles. To address this challenge, General Motors, in partnership with Magna International and Wipro, launched an independent business entity SDVerse to develop an automotive software marketplace designed to enhance collaboration among automotive OEMs, Tier 1, Tier 2 suppliers and software startups, paving the way for a more connected industry.
Industry transformation
Launched on September 30, 2024, the SDVerse software marketplace serves as a pivotal platform for commercializing automotive software, fostering transparency and promoting relationships between buyers and sellers. By leveling the playing field for players in the automotive supply chain and startups alike, SDVerse accelerates industry’s adoption of SDVs.
The shift to SDVs represents a monumental transformation in the automotive industry, moving from hardware-centric to software-driven vehicles. By embracing software centralization, virtualization, and cloud-based development, automakers can reduce time-to-market, improve vehicle capabilities, and enhance customer experiences. The success of this transition hinges on effective collaboration across the industry. The outlook is bright, thanks to the commitment of manufacturers and advancements in collaborative platforms to better facilitate this cooperation, the automotive manufacturing’s future is undoubtedly software-defined.
For a list of the sources used in this article, please contact the editor.
By Praveen Yalavarty
Praveen Yalavarty is Chief Technology Officer at SDVerse. SDVerse is a first-of-its-kind B2B marketplace for buying and selling automotive software. Backed by founding members General Motors (GM), Magna and Wipro, SDVerse is accelerating the future of software-defined vehicles by providing a matchmaking marketplace for buyers and sellers that benefits the entire automotive ecosystem. Its standard-agnostic marketplace is available to all OEMs, suppliers and any other company with relevant software offerings and