Automotive Industry Accelerates AI and OTA Push, But Faces SDV Challenges

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Originally published on: April 6, 2025
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A newly released global survey by Wards Intelligence (now part of Omdia), commissioned by automotive software firm Senatus, reveals the auto industry’s increasing commitment to artificial intelligence, over-the-air (OTA) updates, and modular software development in its shift toward software-defined vehicles (SDVs). Conducted in March 2025 across Asia, Europe, and North America, the study collected responses from over 500 professionals, highlighting both momentum and remaining hurdles in achieving a fully software-centric automotive future.

Industry Priorities Shift Toward AI and Embedded Software

Automotive manufacturers and suppliers are now placing greater emphasis on AI-driven capabilities and continuous software deployment, overtaking last year’s focus on data integration and system consolidation. The 2025 survey shows a decisive realignment of priorities as OEMs look beyond traditional vehicle mechanics.

Emerging Use Cases for AI in Vehicles

Respondents cited smart diagnostics, predictive maintenance, and real-time performance calibration as key areas where AI is expected to drive innovation in the near term. Interestingly, only one of the top five use cases—AI-enhanced routing—has seen broad deployment to date.

“AI is quickly becoming a cornerstone for vehicle personalization and operational efficiency,” said MaitĂȘ Bezerra, Senior Principal Analyst for Software-Defined Vehicles at Wards Intelligence. “This is not just about self-driving—AI is redefining how vehicles self-monitor, self-optimize, and communicate.”

OTA Updates Gain Momentum, But Aren’t Yet Ubiquitous

Over-the-air updates continue to expand across the industry, with 67% of respondents reporting current deployment in at least some vehicle systems. However, only 23% say their organizations are using OTA for feature upgrades today—although 78% expect broader functionality by 2027.

Challenges in Scaling OTA Capabilities

The complexity of modern vehicle software architecture has slowed the widespread rollout of OTA across safety and performance systems. Still, the industry is clearly moving toward an environment where vehicles can receive continuous improvements post-sale.

“OTA is no longer a nice-to-have,” noted John Heinlein, Ph.D., Chief Marketing Officer at Sonatus. “As software becomes the heartbeat of the modern car, the ability to securely and efficiently update systems is becoming fundamental to the ownership experience.”

Modular and Scalable Software Architectures Take Shape

Survey data indicates that the industry is moving toward more modular and scalable platforms, with high-speed in-vehicle networking and consolidated hardware set to gain traction by 2027. By 2029, platform standardization is expected to accelerate, followed by widespread adoption of zonal architectures from 2030 onward.

Open-Source Solutions Gaining Ground

A key development noted in the survey is the increased confidence in open-source systems for safety-critical applications. In a sharp contrast to last year, 83% of respondents are now considering Linux or Android platforms for core vehicle systems—up from just 12% in 2024.

This marks a significant pivot in an industry that has traditionally leaned heavily on proprietary software for mission-critical functionality, reflecting a growing demand for scalability and vendor interoperability.

Roadblocks to SDV Adoption Still Persist

Despite rapid progress, the transition to software-defined vehicles is not without its obstacles. The top concerns cited include:

  • Cost optimization and ROI clarity (29%)
  • Data privacy and management (27%)
  • Legacy systems and outdated organizational mindsets (26%)

These challenges underscore the complexity of modernizing an industry rooted in mechanical engineering and long production cycles.

Yet optimism remains high: 82% of respondents believe SDVs will be successful in improving customer experiences, unlocking new revenue streams, and accelerating development cycles.

Historical Perspective: Echoes of the Smartphone Revolution

The automotive industry’s current transformation bears resemblance to the early 2000s tech boom, when smartphones transitioned from hardware-centric devices to platforms defined by their operating systems and apps. In a similar vein, automakers are now reimagining vehicles as dynamic platforms—capable of evolving long after they leave the assembly line.

Conclusion

The 2025 Software-Defined Vehicle Survey paints a clear picture of an industry at a tipping point. With artificial intelligence, OTA capabilities, and open-source platforms leading the charge, automotive OEMs and suppliers are investing heavily in a software-first future. However, legacy hurdles—both technical and cultural—must still be overcome to fully realize the potential of SDVs.

As technology continues to reshape the vehicle lifecycle, those who adapt early may find themselves with a critical competitive advantage in the era of intelligent, connected mobility.

What’s your take on this update? Are SDVs the future of mobility or just industry hype? Share your insights below!





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