The Asia Pacific Software Defined Vehicle Market is expected to grow from USD 148.7 billion in 2024 to USD 735.7 billion by 2030, at a CAGR of 30.5%. China and South Korea are rapidly working on SDV technology, driven by trends such as centralized software architecture and tool-based development processes. Further, market growth in the Asia Pacific is driven by the rising demand for an enhanced driving experience and the increasing sales of electric vehicles. China is one of the largest SDV markets in the world and the largest automobile market in Asia Pacific. The country is home to key SDV providers such as Li Auto Inc, NIO, and XPENG, and OEMs transitioning toward SDVS such as BYD, particularly in intelligent connected application software. Companies like Tesla, NIO, and XPENG have integrated advanced AI, connectivity, and OTA updates, allowing continuous software improvements and new feature deployments. Tata Technologies (India), for instance, in January 2025, partnered with Telechips Inc. (China) to co-develop advanced solutions for SDVs, focusing on ADAS platforms, automotive cockpit controllers, and gateway controllers to enhance software-hardware integration and reduce time-to-market for OEMs.
Other countries in the region will also drive SDV shift in the coming decade. In Japan for instance, OEMs have started tie-ups among each other and with international players to tackle challenges led by the new growing dominance of China in auto market. In May 2024, Japan’s Ministry of Economy, Trade, and Industry (METI) and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) introduced a draft Mobility DX Strategy aiming for a 30% global SDV market share by 2030 through radical vehicle design renewal, new mobility services with automated driving, and data-driven value creation. Japanese OEMs are partnering with leading autonomous mobility software providers to boost SDV adoption in the country. For instance, in November 2024, Panasonic Automotive Systems (Japan) partnered with Arm Limited (UK) to standardize automotive architecture for SDVs through initiatives like using VirtIO-based Unified HMI for zonal architecture, ensuring cloud-to-car environmental parity and expanding VirtIO standardization. South Korea is also working for a rapid SDV shift, to cater more for the European and North American Markets. Government support, industry collaboration, and focus on innovation position South Korean OEMs for strong domestic and global growth in the SDV space. South Korean OEMs are also focusing on expanding their ties globally to integrate their SDV technology with European infrastructure. For instance, in April 2024, Hyundai Motor Group and the Dutch government signed a letter of intent to incorporate smart mobility and connectivity features into Hyundai and Kia vehicles. This aligns with Hyundai’s SDx ecosystem strategy and enables its infotainment systems to interface with Dutch infrastructure for real-time traffic and safety data, enhancing road safety and traffic management.
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Leading OEMs and technology providers in the region are leveraging open-source platforms to develop advanced vehicle software, improving driving assistance, connectivity, and digital capabilities. For example, Li Auto (China) is working on its second-generation EREV platform, based on the W and S platforms, to produce EVs at lower costs and more competitive prices. This architecture will allow the company to expand into the mid-segment electric vehicle market and scale across new vehicle segments, with models like Li One, Li 8, and Li 9. Similarly, ZEEKR (China) manufactures vehicles on the SEA platform, which is shared with Polestar, Geely, and Volvo. The platform, combined with ZEEKR’s proprietary software, enables complete vehicle system control via the infotainment screen and offers scalability at a moderate cost, with models such as ZEEKR 001 and ZEEKR X. Further, XPENG Inc (China) builds its vehicles on the SEPA 2.0 platform, which has reduced the R&D lifecycle by 20% and cut costs for ADAS and smart infotainment systems by 70% and 85%, respectively. XPENG plans to collaborate with Volkswagen on the CEA platform, expected to lower development costs by 40%, and offers models like XPENG P7, XPENG P5, XPENG G3i, and XPENG G9.
Significant investment in cloud computing platforms is creating a strong ecosystem in the Asia Pacific region that includes semiconductor and hardware suppliers. For OEMs, SDVs offer benefits such as shorter development cycles, personalized in-car experiences, and new revenue opportunities through over-the-air (OTA) updates and subscription-based services. Consumers will experience better vehicle performance, advanced safety features, and smooth integration with innovative technologies. While some premium models already include SDV capabilities, wider adoption in mass-market vehicles is expected to grow between 2025–2030 as more automakers expand their SDV platforms.
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