The automotive industry is undergoing one of the most profound transformations in its history. The sector is moving from vehicles defined primarily by hardware to a new generation of automobiles increasingly shaped by software, computing power, data management and connectivity. This shift is redefining not only how vehicles are designed and developed, but also how they are validated, updated and supported throughout their entire lifecycle.

At the heart of this evolution is the Software-Defined Vehicle (SDV), a concept set to revolutionize the entire automotive value chain. A newly released report by the Advanced Propulsion Centre UK (APC) provides the industry with a clear and comprehensive definition of Software-Defined Vehicles, outlining their key layers, core components and the value chain that is reshaping the future of vehicle development.

The report serves as an important reference for OEMs, suppliers and stakeholders across the automotive ecosystem, offering a comprehensive overview of the industry’s transition toward a software-centric mobility model. To further explore the report’s findings, APC will also host a webinar featuring leading industry experts who will discuss the key insights and implications for the future of automotive innovation.

Software-Defined Vehicles move beyond the traditional product model, in which vehicles are launched once and refreshed periodically, transforming the automobile into a continuously evolving platform. Through over-the-air software updates, real-time performance monitoring and ongoing functional improvements, vehicles become dynamic systems capable of evolving long after they leave the production line.

The SDV value chain encompasses hardware, on-board and off-board software, systems integration and the lifecycle operations required to support continuous improvement well beyond standard operating procedures. At the same time, the way value is created and captured across the automotive industry is changing, with competitive differentiation shifting from purely mechanical engineering toward software platforms, digital services, data management and cloud-enabled applications.

Vehicle electronic architectures are also undergoing a major transformation. Modern SDV platforms are progressively moving away from numerous distributed electronic control units (ECUs) toward centralized computing systems and more structured electrical/electronic architectures. A key technological direction is the transition from traditional domain-based E/E architectures to zonal architectures supported by high-performance central vehicle computers capable of managing vehicle functions more efficiently.

The strategic importance of this transformation is also reflected in the evolution of the DRIVE35 programme, which now recognizes Software-Defined Vehicles as an eligible area for technology funding. The initiative supports the UK’s transition toward next-generation automotive innovation and is delivered by the Department for Business and Trade in partnership with the Advanced Propulsion Centre UK (APC) and Innovate UK.

The UK Government’s Advanced Manufacturing Sector Plan

DRIVE35 forms part of the UK Government’s Advanced Manufacturing Sector Plan and represents one of the country’s most significant initiatives supporting automotive innovation, with £4 billion in funding available through 2035 to accelerate automotive research and development, industrial scale-up and the transition toward a zero-emission future.

Software-Defined Vehicles are part of the broader transformation toward electric and intelligent mobility. The latest technologies for the manufacturing and recycling of electric and hybrid vehicles for the automotive, transportation and industrial sectors will be among the highlights of E-Tech Europe, taking place from 7–9 October 2026 at BolognaFiere, as part of Urban Tech 2026 – The Urban Technology Show, the new international exhibition dedicated to e-mobility, traffic management, commuting, security, telecommunications, data and environmental technologies.

The event will provide a unique opportunity for automotive manufacturers, technology suppliers, research centres and institutions to exchange knowledge and showcase the innovations that are redefining the future of mobility and accelerating the transition toward increasingly connected, intelligent and software-driven vehicles.

Against this backdrop, Software-Defined Vehicles are emerging as one of the industry’s most important drivers of innovation and will undoubtedly be among the key topics shaping the international debate on the future of mobility at E-Tech Europe 2026.