ACV facts & figures
Used car inventory once only focused on the exterior and the mechanical condition of the car. But the amount of software in today’s vehicles adds a layer of complexity to inspections and servicing. And with software-defined vehicles set to create $650 billion in value for the automotive industry by 2030,1 this trend will only increase. If you’re wondering what it means for a vehicle to be software-defined, this helpful guide will explain what you need to know, including how they work and the benefits they offer.
What Is a Software-Defined Vehicle?
Any vehicle that runs its operations, functionality, and new features through software is considered a software-defined vehicle. They are the technological future of the automotive industry and provide the basis for future capabilities like self-driving and autonomous vehicles.2
As life becomes increasingly digitized, many drivers expect their vehicles to become fully integrated with the other connected devices they use. Historically, vehicles were more defined by their hardware (like horsepower, airbags, power windows), but software will be taking a more prominent role.3
Some of today’s most premium vehicles have “as much as 150 million lines of software code distributed among as many as 100 electronic control units (ECUs) and a growing array of sensors, cameras, radar and light detection and ranging (lidar) devices.”4
What Benefits Do Software-Defined Vehicles Offer?
Software-defined vehicles offer a wide range of benefits for drivers and manufacturers alike. Here’s how this technology affects the driving and ownership experience:
- Safety: Software-defined vehicles outperform traditional vehicles, with features including anti-collision and driver assistance.
- Comfort: These vehicles offer customized driver and rider experiences with onboard infotainment systems featuring music and video streaming. They also offer connectivity with the driver’s smartphone.
- Efficient preventative maintenance: With insights about vehicle performance available through telematics and diagnostics, owners can have better clarity about vehicle maintenance needs.
- Upgrades and updates: Manufacturers can add new functionality with over-the-air (OTA) updates, rather than solely via a vehicle owner trading in their model for a newer version.
- Environmentally friendly: Many software-defined vehicles are electric and therefore have a smaller carbon footprint.
- Personalization: New features can be added to meet individual driver needs, including services or apps. In this context, software updates mean that these features can be priced as subscriptions or individual purchase, adding additional flexibility for manufacturers.
- Data collection: SDVs can communicate with their environment and collect data as they operate. This allows software features to be constantly improved based on real-time information.
- Lifetime value: Updates over-the-air mean that vehicle owners will always have new features available without having to go into a service center, meaning car ownership can have a longer lifespan.
- Advancements in automotives: Software is the basis for innovation like e-mobility and autonomous driving, so SDVs open the door to that future becoming a reality.3
Typical Elements of Software-Defined Vehicle Architecture
These are the key traits that drivers can expect to find in a software-defined vehicle:
- User applications that drivers and passengers directly interact with, like infotainment or vehicle controls.
- Instrumentation systems that add to the functionality of the vehicle but normally do not require driver interaction (think Advanced Driver Assistance Systems).
- Embedded OS which manages all critical functions and general operations.
- Hardware, which includes engine control units and the chip on which the system is installed.2
How Do OTA Updates Work for Software-Defined Vehicles?
One significant benefit that comes with SDVs is the ability to have vehicle updates and optimizations made over the air. This means manufacturers can deliver new features to existing vehicles, fix bugs, and improve capabilities without the vehicle owner visiting a service center. With faster, more advanced options, customers will see less downtime when they don’t need to bring the car in for servicing, and be able to keep a more updated vehicle for a longer lifespan. And when it comes to in-person repairs, AI capabilities are already helping technicians improve their repair recommendations, efficiency, and accuracy.1
What Is the Connection Between SDVs and Autonomous Vehicles?
The development of autonomous vehicles hinges on software. Self-driving hardware relies on devices like sensors, cameras, and radar, but AI and machine learning (ML) enable them to work autonomously and react spontaneously to road behavior models. A central computer—in the form of an SVD—is the primary way of delivering functions like braking, steering, and accelerating with autonomous vehicles. These vehicles also require frequent updates to maintain the latest safety fixes and improvements.2
Try ACV Auctions Today
As you work to obtain the best inventory to meet customer demands—including SDVs—partner with ACV Auctions. Our online auctioning platform offers used wholesale vehicles with detailed inspection reports. All vehicles have been individually inspected by our trained vehicle inspectors, so you can have the confidence that you know what you are bidding on. Learn more about how ACV Auctions can help your business grow.
Sources
- Krishna, Ramki. 2025. “Software Defined Vehicles: A New Era for Automotive.” Digital Dealer. Retrieved March 11, 2025. https://digitaldealer.com/dealer-ops-leadership/software-defined-vehicles-a-new-era-for-automotive/
- QNX. “Software-defined vehicles.” QNX. Retrieved March 11, 2025. https://blackberry.qnx.com/en/ultimate-guides/software-defined-vehicle
- Bosch. “The software-defined vehicle.” Bosch. Retrieved March 11, 2025. https://www.bosch-mobility.com/en/mobility-topics/software-defined-vehicle/
- Mobility Insider. 2020. “What is a software-defined vehicle?” APTIV. Retrieved March 11, 2025.
