Software and cloud data will accelerate the decline of the microchip within the automotive industry

Is the industry capable of accommodating for software-defined vehicles as the gap between economy and luxury classes widens? By Christopher Dyer

The industry is steadily moving towards software-defined vehicles, despite high costs and limited access to the technology for economy class manufacturers. Estimates from a 2021 McKinsey study suggest that one in three manufacturers already has software-define vehicles in development, with a further fifth of those also developing their own cloud-based services.

The technology is already seeing some applications within the luxury vehicle segment. The limited availability of microchips is beginning to force some luxury vehicle manufacturers to lean more on software and cloud-based services from Tier 1 suppliers. A 2020 study by Deloitte theorises this could be part of growing trend, with manufacturers looking to mitigate the limitations imposed by the component shortages. The study also anticipates a drop in price of software-based and cloud data solutions, estimating a 15% decline in the next five years.

Poor microchip availability has forced some manufacturers to lean more on software and cloud-based solutions

It’s time to log in (or subscribe).

Not a member? Subscribe now and let us help you understand the future of mobility.

Monthly Online Magazine
£195
1 user
12-month subscription (Annual rebill)
Access to Automotive World Magazine, our must-read monthly online publication
Mag + Articles + Special Reports
£495
1 user
12-month subscription (Annual rebill)
Access to Automotive World Magazine plus all articles and more than 40 special reports per year
All Content
Single-User License
£1,950
1 user
12-month subscription (Annual rebill)
Free tickets to Automotive World events
Unlimited online access to all content, including Automotive World magazine, articles, special reports, data and research
All Content
Team License
£3,950
Up to 5 users
12-month subscription (Annual rebill)
Free tickets to Automotive World events
Unlimited online access to all content, including Automotive World magazine, articles, special reports, data and research
All Content
Company-Wide License

Contact us for pricing

Unlimited users
12-month subscription
Free tickets to Automotive World events
Unlimited online access to all content, including Automotive World magazine, articles, special reports, data and research

Welcome back , to continue browsing the site, please click here