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The hidden costs of software-defined vehicles

With an increasing number of OEMs around the world integrating more software in their vehicles and premium feature packages, the concept of a software-defined vehicle is quickly becoming a reality. To ensure their latest vehicles deliver a good user experience, and high-quality services, many OEMs are hiring thousands of new staff members and spending billions of dollars on software R&D. While this will give them more control over the development and production of new solutions, OEMs must also be aware of the risks such an investment can pose to ROI. More importantly, they must understand the hidden costs of this development across the software stack.

Today, global automakers are spending well over $1 billion per year on software research and development, representing a cost between $1,000 to $3,000 for every vehicle sold. But what are they getting for their money? Due to significant disruption not only to consumer automotive competitive markets, but also to the extensive supporting supply chain, OEMs now dedicate significant resources to software research and development to remain competitive. These automakers are spending their software R&D budgets on a combination of new features and control over systems and features of their vehicles. With this level of spend, the build or buy decision for software at OEMs needs to be based on a clear understanding of the value each type of software brings to the OEM’s ultimate goal of delivering high quality services to their customers.

In this white paper, we examine just how much money major OEMs from different regions are investing into the development of their new, software-defined, vehicles. Further automaker commitments to these vehicles are similarly outlined – including the approximate R&D spend per vehicle, and how each OEM will support staffing increases in their software departments as they work to develop, produce, and roll out these solutions over the coming years. Expert insights into the processes and technologies surrounding these heightened software development costs are provided throughout the white paper. These insights, for example, understand both the role and importance of middleware to them alongside the opportunities of high-performance computers in the development of software-defined solutions and the challenges they pose around R&D expenses.

For OEMs, Tier 1 suppliers, and other companies looking to develop software-focused vehicle functions and features, this white paper maps out a broad array of best practices to do so. Among these are thorough assessments of the build and buy options for in-vehicle OS in addition to the benefits and use cases of a partner-driven approach to mitigating development costs.


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