Across the industry, a growing number of automakers are equipping their latest vehicles with advanced software integrations. While this trend can be observed today in the extension and enhancement of contemporary IVI capabilities, automakers are already investigating the ways in which software can similarly enrich key areas of the vehicle lifecycle. The culmination of this trend is the Software-Defined Vehicle (SDV), one which will provide the industry with new opportunities to capitalize on many user experiences and accelerate innovation across several feature domains.
In understanding the benefits the SDV and its associated movements, such as electrification, can deliver to consumers as well as their business, many automakers around the world are now working to develop and roll out a software-defined vehicle. One of the most notable examples of this can be found in Japan where Honda and the Nissan Motor Company, two of the biggest automotive OEMs in the region, announced MoU to a seek strategic partnership on several key technologies including in-vehicle software. Through this new collaboration, the automakers will combine their strengths and explore the possibility of future collaboration across a variety of topics – including automotive software platforms, core components related to EVs, and complementary products.
Recognizing the potential of this partnership to disrupt the Japanese automotive industry, Nikkei BP, the Japan region’s biggest financial newspaper, interviewed Masahiro Otsuka, Senior SDV Specialist at SBD Japan to explore it further. While we briefly talk on the interview here, you can read the full interview on XTech, Nikkei BP's dedicated website for technology news for industries such as IT, telecoms, and automotive.
At the height of the interview was the origin of Honda and Nissan’s partnership, understanding why these OEMs are partnering on vehicle software. Here, Masa provided insight into the broader software context surrounding the new collaboration – highlighting the potential financial and technical benefits from the partnership as well as the challenges this partnership could pose on both sides.
Afterwards, while digging into the cost of SDV development, Masa cited our SDV white paper, The Hidden Costs of Software-Defined Vehicles, through which we discovered that global, mainstream, OEMs such as Honda or Nissan could spend up to $115 million (17.9 billion yen) to develop and maintain the most fundamental, non-differentiating cloud & in-vehicle software building blocks for vehicle data and algorithm management. At the same time, with several software components now operating in the vehicle at once, the cost of this software as a whole is estimated to be up to 10 times more than that amount. However, the potential for this cost to be halved through Honda and Nissan’s partnership would present both companies with significant savings at each stage of the SDV development process.
To learn more about the impacts of the SDV on the Japanese automotive industry, and the potential benefits of Honda and Nissan’s SDV partnership, contact us today!
