The growth of software-defined vehicles is set to upend the traditional relationship between automakers and suppliers, according to a report released Tuesday by Deloitte.
Software-defined vehicles are expected to account for at least 90 per cent of the new-vehicle market by 2029, up from only 2.4 per cent in 2021, Deloitte said in the new study. Likewise, global revenue from over-the-air updates is expected to surge to about $14 billion (all figures in USD) 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 LLP.
"It's a pretty significant paradigm shift for a lot of these automakers," Ahn told sibling publication Automotive News. "Once these traditional automakers 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."