Electrification and automation may have started the next automotive transformation, but software and AI will determine who leads it. The global race for automotive leadership is now centered around who integrates and orchestrates the core ecosystems that increasingly define how vehicles operate – software, sensors, AI, and connected technologies – into unified systems that deliver unparalleled user experiences.
The shift is profound, the pace is accelerating, and the stakes could not be higher. In the software-defined vehicle (SDV) era, automakers that fail to master software integration risk becoming low-margin hardware assemblers, and the innovation around it will determine where future mobility value creation occurs.
For decades, competitive advantage in automotive manufacturing was built on mechanical engineering, scale, and production efficiency, and when a car moves through an intersection today, the scene still appears familiar. Yet beneath this ordinary moment, cars now exchange signals with vehicles, infrastructure, the cloud, and even space-based platforms, executing thousands of software-driven decisions in real time. Your daily drive is now part of a dynamic connected ecosystem with a networked computing platform on wheels that is continuously sensing, improving, adapting, and learning.
Today, vehicle differentiation is moving away from horsepower or even electrification alone and toward vehicle architecture. By 2035, industry projections estimate that ~48 million vehicles globally will be sold with centralized architectures and computing stacks. During the same time, 74%-80% of new vehicles sold will be entirely SDV and AI-powered. The question facing automakers is not simply how to build the car, but how to design a mobile technology stack that supports continuous innovation around centralized compute and shared software platforms.
At the center of this transformation is the in-vehicle experience. Drivers and passengers now expect the same personalized and intelligent interactions they experience on other smart devices. The cockpit has evolved from an instrument cluster into a space where humans can work, communicate, consume content, and even engage with vehicle brands themselves. Digital services are redefining what consumers value in a vehicle, turning the intelligent cockpit into the new battleground for brand differentiation.
In the SDV era, competitive advantage will come down to three things: modularity, user experience, and trust. Together, they will enable faster, more personalized, and safer innovation cycles and more efficient deployment across vehicles. Among these elements, cybersecurity and data trust are foundational requirements; they are not compliance exercises. No single company can manage connected mobility or protect its vast data flows alone. Collaboration across automotive, consumer electronics, telecommunications, software, and cybersecurity industries is essential to keep pace with accelerating technological change.
This is where many automakers face their greatest challenge. Automakers can no longer rely on fragmented supplier relationships built for a hardware-first era. They need technology partners capable of integrating software, AI, and user experience into a synchronized platform.
American leadership in the SDV era will not be secured through innovation alone, however. The U.S. automotive industry must work with the government to create a future-oriented regulatory and policy ecosystem to meet this evolutionary moment. The U.S. cannot afford disjointed deployment strategies or outdated regulatory frameworks while global competitors are moving aggressively to scale SDV ecosystems, integrate AI into transportation infrastructure, and shape next-generation automotive standards. Coordinated government action to enable software-defined and autonomous vehicles is not an abstract concept or a simple symbolic gesture; these policies have real and direct effects on the deployment speed, scale, safety, and quality of these technologies.
It is therefore encouraging to see the National Highway Traffic Safety Administration begin advancing rulemaking efforts to enable commercial deployment of autonomous vehicles in the United States while maintaining safety as the foundational principle. The White House also appears increasingly focused on accelerating AI adoption across the automotive sector by supporting infrastructure development and promoting a more cohesive national regulatory environment. Without regulatory clarity and nationally aligned standards, deployment slows, investment stalls, and innovation moves elsewhere.
Decades of leadership in connected car technologies and premium in-vehicle experiences have positioned HARMAN Automotive at the center of this evolution. Our recently announced intent to acquire ZF Group’s ADAS business represents an important step in that journey. Our goal goes beyond adding features; we aim to enable deeper system integration through unified architecture, helping automakers accelerate SDV development and deliver differentiated in-cabin experiences at scale.
According to a recent IBM Automotive 2035 study, 75% of auto industry executives say the software-defined experience will be the core of brand value by 2035. As software increasingly becomes the defining differentiator in customer experience, the industry’s next phase will not be defined by who moves first, but by who integrates best. The winners of the SDV era will not simply build better cars. They will build smarter, more adaptive mobility platforms that continuously evolve with the people who use them.
Ghada Elramly, SVP Global Customer Groups at HARMAN Automotive. She leads HARMAN Automotive’s sales team with an emphasis on innovative customer relationship management. In Elramly’s role as SVP, Global Customer Groups, she leverages analytical skills to enhance service delivery and drive market growth. She joined HARMAN in June 2024 from Continental, where she led the Autonomous Mobility Market in Europe.
