PRAGUE – Software is becoming more and more central to Valeo’s business model. The expectation that it will make up 30 percent of the value of a typical car by 2030.
“Our ambition is to become a software-defined company,” said Derek de Bono, vice president, software-defined vehicles at Valeo. “Not to the detriment of hardware, but the software will define what hardware we need and what we can do with it.”
The global automotive software market was worth $34 billion in 2020, a figure that will rise to $65 billion in 2025 and $83 billion in 2030, de Bono said at a presentation of Valeo’s software business at the supplier’s technical center here last month.
“It’s a brutal transformation,” de Bono said of the move to software-defined vehicles. “A lot of companies that have not anticipated the change won’t be around in a few years. If you miss the next trend, it’s just too hard to catch up.”
Software applications such as advanced driver assistance systems (ADAS) or infotainment will account for about $50 billion of the 2023 figure, with the remaining $33 billion in integration and validation, which de Bono described as an overlooked revenue source.
Valeo is aiming for 500 million euros in direct software revenue in 2030, through applications, middleware and engineering services such as validation. The supplier calls its direct software product lineup AnSWer, which it announced in September at the Munich auto show.