Technology

Audi eyes partners, Hyundai commits billions to make software-defined vehicle shift

Audi activesphere concept 2023
Audi is expected to have its first software-defined vehicle in 2028.
March 28, 2024 05:00 AM

Audi and Hyundai are accelerating their shift toward offering software-defined vehicles.

Audi is due to get its first SDV in 2028, along with sister brand Volkswagen, VW Group CEO Oliver Blume said this month.

Audi is playing a key role in VW Group's plans as the initiator of a so-called SDV Hub, where experts from the two automakers as well as the group's software arm, Cariad, will collaborate on solutions for the next-generation models.

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The brands and Cariad will also rely on specialists from outside VW Group to create their SDVs.

"External partners will integrate their program code into ours," Audi CEO Gernot Döllner told Automotive News Europe sister publication Automobilwoche. He said that there will be a need to have a more integrated development pipeline because the move to SDVs will slash the number of electronic control units in the car, replacing the ECUs with central computers.

There is a rapid move by automakers and suppliers such as ZF Friedrichshafen toward centralized computing.

"I am convinced that 30 to 40 percent of vehicle platforms will be zone- and domain-controlled from 2025 onward," ZF Chassis Solutions boss Peter Holdmann told Automotive News Europe.

Mindset shift

ZF's response to the trend is its in-house developed cubiX software, which can control systems that it produces, such as the brakes, as well as those from competitors. The first model to offer cubiX is the new Lotus Eletre.

Holdmann also said that the move to SDVs is causing a mindset shift at ZF.

"The main challenge for every engineer participating in this transformation is to accept that in the future software comes first," he said.

That same mantra was repeated in Audi's 2023 annual report, where the automaker said: "Audi is undergoing a paradigm shift in the development of new models toward software first, and will in the future offer vehicles that are developed around software."

Ford of Europe designer Filip Krnja liken the industry's transition to a "a rewiring of the brain."

Multibillions on SDVs

Hyundai, meanwhile, said Wednesday that it would invest 31.1 trillion won (more than $23 billion) into R&D for EVs, including SDVs and battery technology.

Automakers hope that shifting their emphasis from hardware to software will cut development costs, strengthen customer loyalty and increase revenue.

However, creating a smartphone-on-wheels requires a complete rethink of vehicle development, new supplier relationships, and an overhaul of corporate culture.

The companies that overcome those challenges are poised to benefit.

By 2030, digital services could generate as much as $1.5 trillion in additional revenue for the global industry, rising to $3.5 trillion, amounting to 40 percent of total automotive industry revenue by 2040, according to research by consultancy Accenture.

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