Software-defined vehicles and the future of mobility
By Ian Constance, CEO, Advanced Propulsion Centre UK (APC) and Zenzic
At the recent TechWorks Semiconductors to Systems Summit 2026, I had the opportunity to speak about one of the most significant transformations taking place across the automotive industry: the shift towards software-defined vehicles, and what that could mean for the future of mobility.
The automotive industry is undergoing one of the most significant transformations in its history.
Electrification is changing how vehicles are powered. Connected and automated mobility (CAM) is changing how they move and interact with the world around them. But underpinning both is another transformation that is fundamentally changing how vehicles are designed, developed and valued: the rise of the software-defined vehicle.
By 2040, transport, energy, and digital systems are expected to increasingly converge into a single, integrated mobility ecosystem. At the same time, vehicles are moving from products defined primarily by hardware towards platforms increasingly shaped by software, compute, connectivity, and data.
The implications extend far beyond the vehicle itself.
From a finished product to an evolving platform
Historically, a vehicle leaving the factory was largely a finished product. Its capabilities were predominantly determined by the hardware fitted during manufacture.
Software-defined vehicles (SDVs) fundamentally change that model.
In the SDV era, vehicles become continually evolving platforms, capable of being updated, monitored and refined throughout their lifetime. Software increasingly determines functionality, performance and customer experience; hardware and software become progressively decoupled; and data becomes a strategic asset rather than simply an operational by-product.
As a result, value creation is also changing. The most valuable elements of tomorrow’s vehicle may increasingly include the software, data, and digital services built around the physical product.
That creates opportunities for new business models and services that continue to deliver value long after a vehicle leaves the production line.
The software challenge behind net zero
When we talk about the transition to net zero, the conversation understandably tends to focus on batteries, motors, and charging infrastructure. But increasingly, software is becoming just as important.
Software now plays a critical role in battery management, energy optimisation, vehicle efficiency, charging management and performance control. A more efficient battery, smarter charging strategy or continuously optimised vehicle can deliver carbon benefits throughout a vehicle’s lifetime, not simply when it is launched.
The journey to net zero is therefore no longer purely a hardware challenge. It is increasingly a software challenge too.
This is also why SDVs are becoming an important part of the conversation around DRIVE35. The programme is designed to support the transformation of the UK’s automotive industry, from early-stage R&D through to commercial scale-up and industrial deployment, with software-defined vehicles and electrical architectures forming part of its technology focus.
The foundation for connected and automated mobility
The same technologies underpinning SDVs are also enabling the development and deployment of Connected and Automated Mobility (CAM). CAM depends on high-performance computing, AI and machine learning, connectivity, cybersecurity, over-the-air updates, and continuous software validation and improvement.
Modern vehicle functions increasingly rely on software, compute, connectivity and cloud-enabled services, requiring new approaches to architecture, validation and lifecycle management.
Crucially, software-defined architectures enable advanced driver assistance and automated driving capabilities to be deployed, improved and maintained throughout the lifetime of a vehicle.
Put simply, software-defined vehicles provide the foundation; connected and automated mobility is one of the outcomes. The software being developed today will form part of the backbone supporting CAM deployment for years to come. That is why disciplines including software engineering, DevOps and continuous integration are becoming increasingly important to the automotive sector.
Through CAM Pathfinder, the UK is also supporting businesses to develop and scale commercially viable CAM solutions, targeting near-market opportunities and clearer routes to commercial deployment.
From software-defined vehicles to software-defined mobility
The opportunity does not end with the vehicle. Future mobility is becoming increasingly connected, intelligent, user-centric and service-led.
Software and data create opportunities for new business models, improved customer experiences, and digital services that continue to generate value beyond the point of sale. The transition is also opening the automotive ecosystem to businesses specialising in areas such as cloud infrastructure, cybersecurity, software tooling, AI, and data services.
We are therefore not simply witnessing the emergence of software-defined vehicles. We are witnessing the beginnings of software-defined mobility. And the scale of that opportunity is significant.
The UK automotive software market is projected to reach £2.4 billion by 2028, while CAM could contribute £66 billion to the UK economy by 2030 (SMMT, 2023). Globally, the SDV market could approach $2 trillion by 2034 (Allied Market Research, 2025).
A significant opportunity for the UK
The UK enters this transition with considerable strengths. We already have capabilities spanning software engineering, artificial intelligence, simulation, systems integration, validation and verification, and cybersecurity. These have applications across electrification, connected and automated mobility, and the next generation of software-enabled vehicles.
The opportunity therefore extends far beyond traditional vehicle manufacturing. It encompasses software, data, AI, cybersecurity, validation, digital services, and the infrastructure that will connect vehicles to the wider mobility ecosystem.
Software-defined vehicles sit at the intersection of two of the most important transformations facing our industry: the transition to net zero and the rise of connected and automated mobility.
If the UK can connect its existing strengths with automotive manufacturing and successfully commercialise the technologies being developed today, we have an opportunity to capture value across this much broader ecosystem.
The future of mobility will not simply be electric or automated. It will be software-defined.
You can explore more of APC and Zenzic’s research and insights into software-defined vehicles, connected and automated mobility and the future of the UK automotive industry through the APC Knowledge Base and Zenzic Knowledge Base.