The Road Ahead: AI-Powered, Software-Defined Vehicles By 2035
By 2035, vehicles will be software defined and powered by artificial intelligence, with three-fourth of executives surveyed worldwide as part of an IBM study saying that software-defined experience will be the core of the brand value.
The Automotive 2035 study—which was based on interviews with senior executives from original equipment manufacturers, suppliers, and related industries across nine countries—reveals a transition from current products and business models. Around 74% of executives believed in the AI-powered, software-defined transition of the automotive sector. Also, 80% of new cars will have a powertrain that will be electrified to some extent, according to respondents.
The auto industry is trying to shift its business model from one-time car sales to a recurring revenue model for digital services and products. The industry is preparing to offer deeper, more personalised user experiences that are enabled by digital capabilities. Currently, just 21% of research and development budgets are allocated to software and digital developments, but respondents expect this to nearly triple to 58% by 2035.
“It is indicated that vehicle value may no longer be limited to initial features and functionality—it would be earned over the life of the vehicle by continuously providing superior customer experiences with new applications and subscription-based services for drivers,” said Jeff Schlageter, automotive industry general manager, IBM.
Research also showed a gridlock at the heart of software-defined vehicle developments. The traditional approach to vehicle architecture—where software for a single domain (such as brakes) is delivered separately from another domain (such as airbags) through individual electronic control units—is no longer sustainable for the SDV era.
To reach a future where cars are truly digital, automakers need an overhaul of current electrical and software architectures. Separating the software and hardware layers is seen as the top technical challenge. Also, 77% of senior executives said they were facing a lack of software development tools and methodologies. Additionally, 74% said a strong mechanical-driven culture is making it difficult to switch to software.
“By harnessing the power of cloud combined with AI, automakers can explore new ideas, test different software configurations, and gather valuable insights to inform the development of innovative Software Defined Vehicle (SDV) features,” added Schlageter.
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