Report: Software-defined vehicles will create more than $650B in value potential | Auto Remarketing

Alex Koster holds a prominent position as the managing director and senior partner of BCG, leading the global automotive technology division. The company has supplied the accompanying images.

Boston Consulting Group (BCG) recently released a report that delves into the gradual move away from internal combustion engines and toward electric vehicles (EVs). This shift has not only heralded advancements in the automotive industry but also paved the way for the emergence of highly sophisticated software-based automobiles. As a consequence, vehicles that were once primarily characterized by their mechanical components have now evolved into infinitely more complex systems.

According to BCG, the software-defined vehicle (SDV) is currently in its early stages and will develop further in the next ten years. This advancement will bring about a value potential of over $650 billion for the automotive industry by the year 2030.

This forecast would constitute a percentage between 15% and 20% of the total worth of the automobile.

Moreover, based on a BCG assessment of SDV advancement, the earnings yielded by automotive software and electronics Original Equipment Manufacturers (OEM) are set to surge by almost three times by the year 2030, escalating from $87 billion to $248 billion.

BCG stated that the automotive software and electronics supplier industry is anticipated to expand by almost 100%, increasing from $236 billion to $411 billion.

The results of a study conducted by BCG in partnership with the World Economic Forum have revealed some interesting statements. The report, entitled "Rewriting the Rules of Software-Defined Vehicles," contains these conclusions.

The article is founded on observations gathered from the Automotive in the Software-Driven Era Initiative, which was created by the World Economic Forum and BCG to tap into the possibilities of teamwork between various industries and the public sector.

So far, over 30 top companies in the automotive, new mobility, and technology sectors worldwide have been brought on board to participate in the program.

Alex Koster, who is a managing director and senior partner at BCG, stated that the impact of the software-defined car is enormous. Software has become the main factor that determines the competitive advantage of the product. It affects the speed and methods of innovation and changes the way businesses and industries approach the manufacturing process of cars. Furthermore, the software-defined car changes the way the end user interacts with the car.

According to a news release, it is now more important than ever to blend the expertise of automobile and technology companies in order to achieve the SDV and other advanced driver assistance features. It is imperative for both industries to determine their proper place in this changing landscape and take action as soon as possible.

Previously, specialists stated that collaboration was restricted as many corporations were focused on creating distinct remedies to seize possible dominating positions independently.

In the coming years, professionals anticipate that the intricacy of technology and the constantly changing dynamics of markets will require increased collaboration and partnerships between different industries to enhance safety, meet consumer expectations, and grow businesses.

Here are five additional revelations from the latest report, which can be accessed on the internet:

The process of transforming industries through the use of SDV (Software-Defined Vehicles) is being hindered by its complexity. However, working together and collaborating across different industries will be essential in achieving a successful and large-scale transformation.

Working together requires us to have a common vocabulary of technological terms that can be applied across various industries.

The development of a platform that can work together is pushing forward the alignment of different industries and ultimately increasing their profits.

Different regional rates of innovation, user experiences, and regulations necessitate the formation of regional collaborative clusters.

In order to succeed in a world where partnerships are a top priority, companies must focus on strengthening their ability to collaborate both within and outside of their organization. This should be a fundamental aspect of their overall approach to business.

According to BCG, as the software-defined vehicle enters its more advanced stages, it is crucial for the industry to utilize interoperable platforms in order to restore simplicity and enable scalability.

Professionals additionally recognize the significance of creating collaborations and partnerships throughout all aspects of the automobile industry.

Maya Ben Dror, who is the Automotive and New Mobility Practice Manager at the World Economic Forum, has emphasized that the auto industry and technology companies need to work together to make the most of software-defined cars. This collaboration is crucial for unlocking the full potential of these vehicles.

According to Ben Dror, the event known as "Automotive in the Software-Driven Era" was organized by top figures in the field of industry in Davos. The purpose of this gathering was to establish a forum where members from various industries and the public and private sectors could come together to collaborate. The main objective was to enhance safety, inclusivity, sustainability, and overall system resilience in the automotive sector.