The automotive industry is undergoing a foundational shift toward software-defined vehicles (SDVs), where functionality, value, and user experience are increasingly governed by software rather than hardware. IDTechEx's report, "Software-Defined Vehicles, Connected Cars, and AI in Cars 2026-2036: Markets, Trends, and Forecasts", offers a comprehensive analysis of this transformation, covering the evolution of in-vehicle electrical/electronic (E/E) architecture, connectivity platforms, feature monetization models, and long-term market forecasts. According to IDTechEx forecasts, Central Compute and quasi-zonal SDV platforms are set to generate around US$755 billion in hardware revenue by 2029, becoming the key source of value uplift for OEMs. SDV feature-related revenue is expected to grow at a 30-34% CAGR through 2035, driven by connectivity and autonomy-based service monetization.
Forecasts to 2036: SDV Adoption and Revenue Outlook
This IDTechEx report provides 10-year market forecasts on the SDV market for the period 2026-2036, in both volume and market value. Forecasts include:
- Global SDV unit sales by architecture level (SDV-0 to SDV-5)
- Hardware revenue by SDV architecture, including central and zonal compute platforms
- Feature-related revenue growth driven by subscription and OTA models
- V2X radio access technology adoption by region
- V2V/V2I Vehicle Unit Sales Forecasting
By 2029, quasi-zonal SDV platforms are forecast to reach US$755 billion in hardware revenue, while feature-based monetization could grow at a 30-34% CAGR, reaching hundreds of billions in cumulative revenue by 2035.
Key Aspects
1. Executive Summary
An overview of the shift from hardware-defined to software-defined paradigms in the automotive industry, highlighting key industry trends, technical enablers, and monetization strategies.
2. Software-Defined Vehicles
Coverage of next-generation SDV architectures expected around 2025, including:
• Breakdown of SDV levels and key enablers such as high-performance compute (HPC), zonal control, and OTA updates
• Vehicle case studies comparing software stack maturity across major OEMs
• Discussion of Generative AI integration into SDV platforms for driver assistance and infotainment
• Analysis of in-cabin personalization, insurance use cases, and Hardware-as-a-Service models
3. V2X and Connected Vehicle Technology
Evaluation of the technologies and infrastructure that enable connected vehicles:
• Comparison of DSRC, ITS-G5, C-V2X, and 5G technologies
• Regional spectrum allocation and regulatory status
• In-depth review of SDV E/E architecture evolution and centralized computing trends
• Use cases for V2V and V2I in safety and sustainability
• Breakdown of hardware modules such as chipsets, onboard units, and roadside units
4. Autonomous Vehicle Connectivity
Assessment of the role of connectivity in autonomous driving capability:
• Connectivity requirements by SAE Level (L2-L5)
• Mapping and localization technologies used in advanced ADAS and AV systems
• Teleoperation models and their relevance in early-stage autonomous deployments
5. Forecasts (2025-2036)
Quantitative forecasts for SDV penetration and V2X uptake:
• Global SDV sales forecast by level (SDV-0 to SDV-5), with Central Compute and Zonal Compute growth trajectories
• Hardware revenue forecast by SDV level, highlighting over US$1.57 trillion peak from SDV-3 by 2028
• Feature-related revenue forecast driven by subscriptions and over-the-air unlocks, reaching ~US$470B by 2035
• V2V/V2I forecast by region and radio access technology, with C-V2X adoption leading post-2025
For the full report details and sample pages reach out to our team at research@IDTechEx.com, or visit www.IDTechEx.com/CSDV.