The European automotive industry is undergoing a seismic shift. At the heart of this transformation is the rise of software-defined vehicles (SDVs)—cars in which software is no longer an add-on feature but the central nervous system. These vehicles are reshaping how manufacturers design, produce, and support cars and how drivers interact with them long after they leave the showroom.
While the software-defined revolution is global, Europe is a particularly dynamic epicenter. With its deep legacy in automotive engineering, strong regulatory frameworks, and ambitious climate goals, Europe is rapidly adapting to—and even driving—this transformation. From German OEMs to Nordic tech suppliers and EU-wide policy shifts, the continent is positioning itself as a leader in the age of the digital car. Fueling the journey are industry leaders like Sonatus automotive software, who provide in-vehicle and cloud software that enables automakers to achieve the full promise of software-defined vehicles.
Here’s a closer look at the most important trends influencing software-defined vehicles in Europe right now.
1. Automakers Are Becoming Tech Companies
Traditional European automakers like Volkswagen, BMW, Stellantis, and Mercedes-Benz are reinventing themselves as tech-driven mobility providers. These legacy manufacturers are investing billions to build their own software platforms, establish cloud partnerships, and reorganize their workforce around digital competencies.
- Volkswagen created its own software subsidiary, CARIAD, tasked with building a unified operating system across VW Group brands.
- BMW’s iDrive 8 interface is part of a broader push toward digital-first vehicle interaction, with continuous over-the-air (OTA) updates.
- Stellantis’ STLA Brain is a software and electrical architecture built to separate hardware from software and enable lifelong updates.
This marks a fundamental shift: instead of releasing fixed-feature vehicles, automakers are developing cars that can evolve and improve over time, just like smartphones.
2. Over-the-Air Updates Become Standard
One of the most significant enablers of SDVs is the rise of over-the-air updates, which allow manufacturers to remotely upgrade vehicle functionality, patch security vulnerabilities, and introduce new services.
European regulators and consumers are embracing this shift, recognizing the long-term sustainability and convenience benefits. OTA updates reduce the need for physical service visits, minimize recall costs, and keep vehicles current with the latest features.
Tesla popularized the practice, but now mainstream European automakers are catching up fast. For example, Volvo’s Android-based infotainment system, developed in collaboration with Google, receives frequent OTA updates that enhance navigation, voice commands, and more.
3. Centralized Vehicle Architecture
Europe’s SDV revolution is also being driven by a shift away from distributed computing systems toward centralized vehicle architectures. Instead of dozens of independent ECUs (electronic control units) handling different functions, future cars are being designed with a few high-performance computing hubs that run multiple processes.
This consolidation simplifies development, reduces hardware complexity, and enables advanced features like real-time decision-making for ADAS and autonomous driving.
For example, Bosch and ZF, two major German suppliers, are developing centralized control units that serve as the “brain” of next-generation vehicles. These systems allow automakers to decouple hardware from software, making future updates and integrations much easier.
4. Regulation and Data Governance
Europe’s strong regulatory environment is shaping how software-defined vehicles are built and operated. The EU’s General Data Protection Regulation (GDPR) has forced automakers and tech suppliers to take data privacy and ownership seriously.
At the same time, new legislation like the EU Cyber Resilience Act introduced mandatory cybersecurity standards for connected devices, including vehicles. These regulations aim to protect consumers while maintaining innovation-friendly conditions.
In parallel, the EU is investing in standardization and interoperability, encouraging collaboration between automakers, suppliers, and tech companies. Initiatives like GAIA-X, a European cloud infrastructure framework, aim to ensure that data remains accessible and sovereign within European borders.
5. Rise of In-Vehicle App Ecosystems
Software-defined vehicles are opening the door to third-party apps and services within the car, blurring the line between mobility and digital lifestyle.
Many European vehicles now integrate Apple CarPlay, Android Auto, and even native apps from Spotify, Amazon, and Google, allowing drivers to use their preferred platforms seamlessly. But beyond infotainment, automakers are building branded ecosystems that monetize new services—like advanced navigation, remote vehicle diagnostics, personalized driving modes, and subscription-based upgrades.
Renault, for example, plans to launch a digital platform with its own app store. Meanwhile, Mercedes-Benz is working on MB.OS, a proprietary operating system that will power future services from entertainment to energy management.
This signals a move toward a vehicle-as-a-service model, where recurring revenue from digital features becomes just as important as the initial sale.
6. Collaboration with European Tech and Cloud Providers
To succeed in the SDV race, automakers are leaning heavily on tech companies. European partnerships are blossoming between carmakers and software, cloud, and chip firms.
- BMW and Mercedes-Benz are both working with Nvidia to develop AI-based platforms for autonomous driving.
- Volkswagen is collaborating with Microsoft Azure for cloud connectivity and vehicle fleet management.
- Stellantis and Amazon are teaming up to develop integrated in-vehicle experiences and cloud services.
This cross-industry collaboration is necessary to meet consumer expectations for digital performance—and to compete with Silicon Valley.
7. Sustainability and Electrification Convergence
In Europe, the SDV trend is deeply intertwined with the electric vehicle (EV) transition. EU regulations mandate zero-emission vehicles by 2035, and EVs inherently rely on software to manage battery systems, thermal regulation, and energy recovery.
Software-defined platforms help optimize energy efficiency, analyze driver behavior, and extend battery life through continuous updates. In countries like Norway, where EV adoption is already mainstream, these features are no longer “nice to have”—they’re expected.
Final Thoughts: Setting the Pace
Europe’s transformation into a hub for software-defined vehicle innovation is well underway. With strong government support, legacy automotive expertise, and a growing ecosystem of tech partnerships, the continent isn’t just adapting to the future; it’s shaping it.
