In a landmark move, eleven major automotive and tech firms have announced they are joining forces to build a shared, open-source software stack. The group, organised by Germany’s Automotive Industry Association (VDA), includes major automakers and suppliers such as Volkswagen Group, BMW, Mercedes-Benz, Bosch, and Continental. Other OEMs and suppliers across Europe and internationally have also been invited to join.
The initiative will create “non-differentiating” open-source automotive software, so it will not offer a competitive advantage to any of the companies involved. The consortium aim to accelerate software development, reduce duplication and standardise foundational vehicle software.
A core benefit is that companies will be able to focus more on data-driven services and software monetisation while still retaining control over proprietary modules and customer experience layers. So, auto interfaces like BMW’s iDrive and Merecedes-Benz’s MBUX will continue to be developed in-house and remain completely distinct from each other.
What has led to this move?
This is a major shift for an industry built on brand differentiation and proprietary platforms but one that makes sense.
Individual connected car software projects not bearing fruit
Legacy automakers are in a race to develop software-defined vehicles (SDVs) but it’s not been an easy task. Internal OEM software projects have struggled, leading to delays in EV and autonomous vehicle launches. Ford’s recent announcement that it was merging its FNV4 project, to develop next-gen electrical architecture, with its existing architecture highlights the kind of struggles many automakers are experiencing.
The rise of Chinese EV brands
While legacy automakers are lagging due to slower innovation cycles and ongoing investment in combustion engines, Chinese OEMs are taking the lead. Chinese OEMs rapid advancements in connected car tech means they are a growing threat to European automakers. Proofing this point, Xiaomi, the smartphone and EV manufacturer, recently had 289,000 pre-orders in one hour for its first sport utility vehicle.
Backed by strong government subsidies, vertical integration and lower production costs, Chinese brands like BYD, NIO and Geely can offer high-tech EVs at competitive prices. This combined with shorter development times means they are expanding rapidly into Europe.
Competition from U.S. big tech
American tech companies — like Tesla, Google, Apple and Amazon — have forced traditional automakers to accelerate the shift toward software-defined vehicles. Tech companies are moving into the automotive space with operating systems, cloud services, voice assistants and autonomous driving technology. For automakers it means they face losing control over the in-car experience and critical customer data. This has resulted in the creation of proprietary platforms (e.g. VW’s Cariad, Mercedes’ MB. OS) to regain digital sovereignty. Automakers are also realising that they need to invest heavily in software talent, modular architectures and data infrastructure if they want to compete.
The benefits of this shared software stack
To stay competitive, automakers must accelerate EV development, cut costs and innovate in software and digital features.
A shared software-defined vehicle architecture will free them up to do this. It will deliver:
Increased efficiency and innovation
The development of independent platforms has caused automakers to waste resources by duplicating the same efforts. A shared software stack eliminates this. It also speeds up development timelines and helps manufacturers bring vehicles to market faster. Analysts estimate this could deliver lifecycle cost savings of up to 25%.
Unlocking innovation and differentiation
A misconception about open-source automotive software is that it reduces competitive advantage. It’s the opposite. By consolidating a software foundation, automakers free up time and resources to focus on what really drives value for the software-defined vehicle: autonomous driving, user interfaces and digital services.
The open-source model also supports modern software practices like microservices, over-the-air (OTA) updates and cloud-native development, enabling increased agility in the auto industry.
Creator community
Open-source automotive software also brings together developers, startups and academic institutions to share ideas. This will enable new applications, extensions and enhancements on top of the base platform — similar to how Android spurred mobile app innovation.
Enhanced safety and compatibility
By making the codebase transparent, security vulnerabilities can be identified and fixed faster. However, this capability relies on robust supply chain security practices being put in place.
Improved integration
Interoperability is another advantage. A shared stack means vehicles from different brands can better integrate with smart infrastructure, charging networks and other digital services.
Enable smaller OEMs
This collaboration amongst automakers will help the industry grow. Smaller OEMs and startups can access high-quality, production-grade connected car software without massive investment.
Building the backbone of the shared software stack
While there are many benefits to a shared connected vehicle platform, OEMs will face challenges also. Ensuring automotive cybersecurity in open-source environments will require rigorous controls. There will also need to be sufficient legal clarity around licensing, especially with so many stakeholders involved. Plus integrating this into legacy software-defined vehicle architectures will be complex and will require a phased approach.
Another crucial element for automakers is planning the build carefully. The expectation is to deliver the platform by 2026, with vehicle rollout by 2030, so their actions now will determine future success
A robust, intelligent connectivity layer must be integrated into the stack from the beginning if OEMs really want to bring the value of this shared platform to life. This requires partners, with cloud-native platforms, global network reach and seamless connectivity, that can plug into the architecture from day one. Without this they run the risk of over-the-air (OTA) updates stalling, data insights fragmenting and user experiences becoming inconsistent.
This is also very important when it comes to individual OEMS building their own proprietary user experiences and services on top of this shared software stack. Having a connectivity foundation that is consistent and seamless will ensure they can launch new services faster, manage them centrally and scale them consistently across markets.
The creation of open-source automotive software is a decisive moment in Europe’s SDV strategy. The potential is limitless. Could this be the start of European OEMs defining how vehicles are built and evolve in this software-defined vehicle era?
Learn more about the value of integrating connectivity into the software stack in our eBook.
