Is the shift toward Software-Defined Vehicles (SDVs) driving automakers into a race for connectivity?

In the past, connectivity primarily supported core vehicle services such as navigation, remote vehicle control, emergency assistance, diagnostics, and over-the-air (OTA) software updates. However, as vehicles transform into software-defined platforms, the role of connectivity is expanding significantly.

This prompts us to consider an important question: Can our connectivity architecture support the intelligent, cloud-driven, and increasingly AI-enabled experiences that will shape the next generation of mobility?

From Connected Vehicles to Software-Defined Platforms

Traditional connected vehicles primarily rely on cellular networks to deliver individual services. However, software-defined vehicles (SDVs) operate differently. Instead of offering functionality only at launch, SDVs allow manufacturers to continuously improve, update, and expand vehicle capabilities throughout the entire ownership lifecycle. Features can be deployed, enhanced, or monetized through software, fostering an ongoing relationship between the automaker and the customer.

SDVs represent a shift from mostly hardware-defined vehicles to programmable platforms capable of continuous improvement through software. Features such as over-the-air (OTA) updates, feature-on-demand services, cybersecurity enhancements, and new digital experiences all depend on reliable connectivity. So, it goes without saying - Connectivity is becoming an essential component of vehicle architecture, rather than merely an optional service.

Connectivity Matters More Than Ever in the Race

The reasons behind this are quite clear. As Software-Defined Vehicles (SDVs) become more reliant on cloud services, their connectivity needs are evolving.

SDV vehicle platforms must support the following:

• Continuous over-the-air (OTA) software updates

• Cloud-based diagnostics

• Digital cockpit services

• Personalized user experiences

• Connected and safety applications

• Real-time vehicle monitoring

• AI-powered vehicle services

These capabilities require vehicles to exchange significantly larger volumes of data than they did in the past. The outcome is a transition from the availability of connectivity to the capability for connectivity.

While the industry explores 6G concepts, 4G remains the dominant baseline technology globally. 4G handles core legacy features well due to its broad coverage, maturity, and low deployment cost. However, the rapid expansion of centralized vehicle software and the significant volume of data uploads are pushing the limits of 4G architectures.

Looking ahead, vehicles that rely on software will need more from their networks. They will require higher bandwidth to accommodate larger data loads, lower latency for quicker response times, and a more robust network to connect multiple devices simultaneously. It is essential for telecom companies and network providers to upgrade their systems to meet these evolving demands and support the next generation of connected vehicles and smart technology.

Despite growing industry focus on next-generation connectivity, 4G remains the dominant technology across major automotive markets.

USA:

Europe:

China:

Source: 526 - Connected & Digital Services Guide

The strength of 4G lies in its maturity:

• Broad network coverage

• Proven reliability

• Lower deployment costs

• Established automotive ecosystem

  
  

For many current applications, including diagnostics, navigation, remote access, and OTA updates, 4G continues to provide adequate performance. However, the rapid growth of vehicle software, cloud services, and connected applications is exposing the limits of legacy connectivity architectures.

Our recent research indicates that both China and the USA are rapidly moving toward 5G technology. The automotive industry's interest in 5G goes beyond just providing faster internet access; it addresses several challenges that become increasingly important as vehicles transition into software-driven platforms. 

Higher bandwidth advantages enable faster connectivity, which supports:

• Larger OTA updates

• Powerful infotainment experiences

• Improved cloud integration

• Faster deployment of digital services

  
  

On the other hand, lower latency significantly reduces communication delays, which enhances the alertness of:

• Cloud-based applications

• Connected safety services

• Advanced driver assistance systems

• Future autonomous driving functions

  
  

As vehicle intelligence increases, consider higher bandwidth as the immediate operational driver (for OTA/data logs) and low latency as the key future safety driver. As cities become more connected, millions of vehicles, devices, and infrastructure nodes will need to communicate simultaneously. 5G is designed to support a significantly higher density of devices, enabling large-scale intelligent transportation ecosystems. This is why China and the USA are currently making stronger progress in developing 5G-enabled vehicle fleets than Europe.

As automakers accelerate their SDV strategies, connectivity architecture is emerging as a key competitive differentiator. While all regions are pursuing the same goal, China, the USA, and Europe are advancing at different speeds and through different connectivity strategies. For instance:

1.    China: Leading the Deployment of Next-Generation Connectivity

China currently demonstrates the strongest transition toward higher-capability automotive connectivity.

• 34% of vehicle models offer 5G connectivity

• 30 brands already offer 5G-enabled vehicles

• Strong government investment in digital infrastructure

• Aggressive focus on intelligent connected mobility

China's strategy appears focused on scaling connected vehicle capability rapidly, creating an environment where advanced digital services can be deployed more quickly.

2.    USA: Driving Connectivity Innovation

The United States combines strong 5G adoption with an influential technology ecosystem.

Key strengths include:

• Strong 5G penetration

• Major investments in software-defined vehicles

• Leadership in cloud, AI, and digital platforms

After China, the U.S. is well-positioned to influence how connectivity, software, and AI converge in future vehicle platforms. However, they may not scale as rapidly as China.

3.    Europe: Building from a Strong Foundation

Europe remains the most mature 4G market.

Its strengths include:

• Highest 4G adoption among vehicle models

• Established connected vehicle ecosystem

• Strong regulatory coordination

• Significant investment in future mobility research

Europe's comparatively slower adoption of 5G indicates a more measured transition strategy that aims to maximize existing infrastructure investments before committing to a large-scale migration. Additionally, Europe's cautious approach to 5G deployment is linked to strict regulatory compliance and necessary architectural changes.

Shift from 4G foundations to a 6G-ready architecture for Software-Defined Vehicles (SDVs)

The industry is moving beyond connectivity availability toward connectivity capability. Although 4G remains sufficient for many current services and continues to dominate vehicle offerings across major markets, SDVs will require connectivity architectures that can support higher data volumes, lower latency, reliable cloud–vehicle communication, and secure integration across vehicle, edge, and backend systems.

China and the United States are progressing more rapidly toward 5G-enabled vehicle ecosystems, while Europe remains more dependent on established 4G infrastructure. These regional differences could influence how quickly OEMs deploy advanced SDV capabilities, including data-driven ADAS services, EV ecosystem integration, real-time diagnostics, digital services, and personalized in-vehicle experiences.

Looking ahead, investment in 6G indicates that vehicles are expected to become increasingly integrated with intelligent transportation infrastructure and cloud-based service ecosystems. Future connectivity architectures will therefore need to be modular, scalable, technology-agnostic, and capable of evolving across multiple network generations without requiring major vehicle redesigns.

In the future, the winner of the automotive market will not be judged by horsepower but by how they manage their software ecosystem and cloud connectivity. For automakers, connectivity has evolved from being merely an enabler of individual features to a fundamental component of the software-defined vehicle (SDV) architecture. The implication is clear: success in connected mobility will not be defined by hardware alone. Instead, it will be determined by the ability to leverage next-generation connectivity to deliver smarter, more responsive, and increasingly intelligent vehicle experiences.

"The race is no longer about networks supporting connected vehicle features, but about building the network capabilities required to scale SDVs and future features. To address the question about connectivity architecture and its support for the next generation of mobility: Yes, as software increasingly drives vehicle functionality and customer value, connectivity is evolving from a supportive feature to a strategic enabler of the Software-Defined Vehicle (SDV)." Leena Khandelwal, SBD Automotive Senior Product Owner

If you're looking to learn more about connectivity and the features it enables, please refer to our Connected and Digital Services Guide. This guide details the services enabled by different types of connectivity, with a focus on Europe, the USA, and China.