What Automakers Think About SDV's Right Now

Recently, the Automotive Press Association hosted AlixPartners for a presentation titled "Unlocking Sustainable Value in Software-Defined Vehicles," and was based on feedback from a survey given to executives across the world.

Executive Overview

• Western OEMs are giving away a big part of their future
• SDV monetization's disappointing pace means players need to rethink the SDV business case
• China's SDV push is accelerating
• Tier-1 suppliers globally face an existential threat

"This is not just a technology race; it is an operating model and lifecycle-economics reset race."

It also looks like OEMs and suppliers are still facing many challenges when it comes to profiting off of SDV features, citing technical issues and customer resistance as the top two reasons. (If you haven't heard of it, BMW tried to charge a subscription to their customers for heated seats, which went poorly.)

Also, this chart shows that many of the over-the-air (OTA) updates that OEMs provide are for bug-fixes, essentially for fixing broken code, instead of providing new features.

Another highlight is that the Chinese OEMs are allocating more of their R&D to SDV. Note, the chart below is current figures. Looking to the future, the allocation percentages continue to mostly rise, but some western OEMs seemingly don't plan to increase the percentage allocation.

The gap between leaders and laggards is widening every quarter, so the time for companies to decide is now, according to AlixPartners.