IBM Institute for Business Value | Research Insights

Automotive 2035
Taking the pole position for
software-defined success
A new software-centric paradigm demands automakers
rethink how they operate and serve customers. As
automakers become more connected, predictive, automated,
and intelligent, IBM can help them modernize, optimize, and
innovate faster. Applying governed AI for insights and
automation, combined with a hybrid cloud strategy and
zero-trust security, automakers can update and upgrade to
keep pace with the constant evolution of vehicles. For more
information, please visit: ibm.com/industries/automotive

2
Foreword

Welcome to the fourth edition of our Automotive 20xx series, Automotive 2035,
where we explore the expectations of more than 1,200 global industry executives
as they consider the era of software-defined vehicles.

In our Automotive 2030 report, we witnessed the industry’s acceleration toward

digital reinvention, with operations realigned around digital capabilities and digital
experiences to redefine brand value. Looking ahead to 2035, the transformation
deepens with the industry poised to embrace a software-defined future.

In collaboration, the Alliance for Automotive Innovation (AAI), Amazon

Web Services (AWS), Red Hat, and IBM examine the profound implications of this
transition. As vehicle electrification progresses further, so will advancements
in sustainable mobility. To gain a competitive edge, automakers will be building
deeper digital experiences that tap into the vehicle control domain, transforming
the way we interact with our cars. And they will be shifting their long-standing
business model, moving away from traditional car sales toward recurring digital
revenue models.

These are consequential changes that require careful navigation. At AAI, AWS,
Red Hat, and IBM, we are not just observers of this transformation; we are active
participants. We are excited about the opportunities that a software-defined
future brings and are committed to supporting automotive decision-makers as
they define their path forward. We hope this report serves as a thought-provoking
resource through our strategic insights and actionable advice. Together, let’s
shape the future of the automotive industry.

Jeff Schlageter Francis Chow

General Manager Vice President and General Manager
Global Manufacturing Industries In-vehicle OS and Edge
IBM Red Hat

John Bozzella Ozgur Tohumcu

President General Manager, Automotive and Manufacturing
Alliance for Automotive Innovation Amazon Web Services

1
 Key
takeaways

74% of automotive executives Automakers are nearly tripling

say 2035 vehicles will be R&D budgets dedicated to software-
software defined and defined products from 21% today
AI powered. to 58% in 2035.
They are investing in software-driven experiences for
drivers and passengers to create long-term brand value.

79% of executives cite the technical

complexity of separating hardware
and software layers as challenging.
Automakers need a sweeping overhaul of current
electrical/electronic (E/E) and software architectures.

74% of executives say their

mechanical-driven culture is strong
and difficult to change.
They need employees skilled in both software
development and traditional vehicle engineering—but
don’t expect to have the talent needed to achieve their
software-defined product goals until 2034.

3
Shining the headlights on software

In a seismic shift, the automotive industry is redefining Multiple industry leaders interviewed one-on-one
its future, with software-defined vehicles (SDVs) poised by the IBM IBV shared their aspirations for SDVs to
to revolutionize driver and passenger experiences by provide a superior driver and passenger experience.
2035. In an eye-opening IBM Institute for Business
Value (IBM IBV) survey of more than 1,200 global But executives also see dollar signs: they expect 51%
industry executives, 74% say 2035 vehicles will be of their revenue in 2035 to come from recurring digital
software defined and AI powered. They foresee an and software-related sources—such as premium
extensive transformation where software and AI are connectivity, vehicle subscriptions, software-defined
applied not just to in-car experiences but to the very functional upgrades, enhanced mobility experiences,
core of the vehicle—its controls, its functions, and its and autonomous driving—up from just 15% today
interactions with the driver and the world around it. (see Figure 1).

FIGURE 1

Figure
Auto 1
executives expect revenue from digital and Option 1
Auto executives expect
software-related revenue
sources fromthan
to more digital and by 2035.
triple
software-related sources to more than triple by 2035.

Percentage of organizational revenue

from digital and software-related sources

2035

2030

Today

15%

33%

51%

Q. What percentage of your organizational revenue comes from/do you

expect will come from digital and software-related sources?

4
5
The transition from a mechanical-driven to a software-driven business model
compels fundamental changes to traditional mindsets and ways of working.
Our research reveals that automakers are struggling to adapt, with one industry
executive commenting, “Some global automotive companies have a half million
employees. Moving big families to a new software culture takes time.” Yet, other
executives suggest the software-defined future in and around the vehicle will arrive
sooner than 2035—forcing automakers to confront related challenges head-on if
they are to emerge as market leaders.

In this report, we identify three areas where automakers can focus their efforts
to stay ahead of the curve. In part one, we explore how software can be a defining
differentiator. In part two, we tackle the technical complexities that are blocking
SDV progress. And in part three, we address bridging the skills gap to create a
software-driven culture that extends beyond vehicles to the entire organization.
Each section includes an action guide with suggested steps that can help automakers
overcome these challenges. Case studies for Volkswagen and Nobo Technologies
bring these suggestions to life.

“The threshold for a full SDV is where vehicle

components and computing hardware are
designed to deliver the full potential of a
software-enabled experience.”
Masashige Mizuyama
Executive Vice President & CTO
Panasonic Automotive Systems

6
Perspective

The 2035 automotive and

mobility landscape

Sidebar
The 2035 automotive and mobility landscape.

82%
of new cars will be electrified in

81% 78%
some way (full EVs or hybrid).

of auto executives say the EV of executives say shared cars and

charging network will be essential rides will be part of the integrated
transportation infrastructure. mobility ecosystem.

38%
of executives do not expect
an adequate alternative fuel
infrastructure in their region.

Mobility ecosystem players will have increased Only

3x
their investment allocation in SDVs by
37%
of new cars will be privately
owned. The rest will be
subscriptions, leased, part
of a corporate fleet, or a
new form of ownership.

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Revving up brand value with
software-powered experiences
The software-defined vehicle revolution is poised
to upend traditional notions of brand value.

Historically, the essence of an automaker’s brand has been rooted in design,

functionality, safety, reliability, and emotional appeal. With SDVs, the focus pivots
to software- and data-driven driver and passenger experiences throughout the
vehicle’s lifecycle—even before it is sold or driven through virtual shopping and
test driving. A company’s ability to deliver cutting-edge technologies, seamless
connectivity, high performance, and personalized services can determine whether
they thrive or end up on the side of the road. In fact, 75% of auto industry executives
say the software-defined experience will be the core of brand value by 2035.

To accelerate this shift, auto executives are nearly tripling R&D budgets of software
and digital investments from 21% today to 58% in 2035 (see Figure 2). In addition
to expanding into new geographies, they are betting on new business models
(including digital platforms) and new product categories as two of the best
opportunities for growth.

“The [SDV] experience should deliver clear

values to your customer.”
Bill Knapp
CEO
Ford Drive

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FIGURE 2
Figure 2
Automakers
Automakers areare
betting on software
betting and digital
on software and digital R&D
R&D investments over the next 10 years.
investments over the next 10 years.

Percentage of R&D budget dedicated

to SDV/software-defined products

2035

2030

Today

21%

40%
58%

Q. What percentage of your R&D budget do you believe is dedicated

to/will be dedicated to SDV/software-defined products?

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Executives expect multiple recurring revenue streams up the list of competitive advantages for 2035,
from SDV-related features, including autonomous superseding the traditionally leading factor of
driving, immersive in-car entertainment, and vehicle integration capabilities (see Figure 3).
remote diagnostics (see Perspective, “Hurdles slow Industry experts note that while it’s unlikely
autonomous driving progress”). But the dizzying pace consumers will prioritize a brand for its superior data
of technology advancements makes it difficult to security and privacy, poor data security and privacy
predict customer expectations 10 years from now. could drive them elsewhere (see Perspective,
While some trends can be anticipated, others haven’t “Security is non-negotiable in the SDV era”).
even been imagined yet.
Despite high expectations for the future, the
59% of automakers are preparing for a wide range of auto industry has seen limited success with
possibilities in 2035, while another third are adopting radical business model changes in the past. Think
a wait-and-see attitude toward future customer of the subscription model, which has fared better
expectations. A small group (9%) expect to focus on in some geographies than in others.1 But digital
tailored customer experiences, including personalized experiences have the potential to be different,
settings and preferences as well as activity helping automakers distinguish themselves from
recommendations based on a consumer’s lifestyle. each other. Each automaker can make their
However, brand-defining digital experiences software the “secret sauce” for brand-winning
introduce new risks and the need for new capabilities customer experiences, enabling revenue model
and partnerships. Safety and reliability become even transformation and giving them a competitive edge.
more important, while data security and privacy jump

FIGURE 3

Auto executives expect safety and reliability along

with data security and privacy will be their top
Figure 3
competitive differentiators in 2035.
Auto executives expect data security and privacy will
be their top competitive differentiator in 2035.
Most important factors in defining competitive advantage

Today 2035

Vehicle integration capability Safety and reliability

Safety and reliability Data security and privacy

Software development Digital reinvention progress

Data security and privacy Innovation and technologies

Diversified product offerings Diversified product offerings

Q. Which of the following factors are/will be most important in defining competitive

advantage for your organization today and in 2035?

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Action guide
How can you redefine your brand’s long-term value
proposition around software-defined experiences?

Think about tearing up the playbook for vehicle experiences and imagining
the unimaginable. What can you create to captivate and retain customers?
Notes Bill Knapp, Ford Drive CEO, “The experience should deliver clear
values to your customer.”

Consider the following actions:

Do not compromise on safety, reliability, security, and privacy, but go beyond

3
these core attributes for brand-differentiating experiences.
1 Plan to deliver an experience consistent with your brand, whether that’s defined
by luxury, sustainability, being fun to drive, a futuristic vibe, and so on. Build a data
platform to collect and analyze user data to offer tailored software experiences in
areas such as virtual test driving and immersive experiences, ownership/usage
models, in-car concierge capabilities, or personalized settings. By demonstrating
a deep understanding of your customers’ needs and desires, you can build lasting
emotional connections and drive long-term loyalty.

Innovate with new ecosystem partners using proven methodologies

3
and frameworks. In separate IBM IBV research, nearly half (48%) of automotive
2 CIOs, CTOs, and CDOs said that strategic alliances and partnerships are the most
important enabler of their competitive advantage over the next three years.2 To
create seamless customer experiences that connect people’s lives and mobility,
look beyond your traditional ecosystem to tech startups, educational research
programs, or telecommunications and media and entertainment companies. Several
executives noted that they do not benchmark against competitors. Rather, they look
for new ideas from other industries. Build an open innovation platform that can
enable integration with your new ecosystem partners.

Incorporate a strong feedback loop. Continually solicit input from customers and

3 3
from ecosystem partners to make ongoing improvements. Anticipate customer
needs and experiment with new ideas. This is the power of software-driven
experiences that can and will evolve rapidly and constantly.

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Perspective

Hurdles slow autonomous

driving progress

Autonomous driving grabs the headlines as one of the more prominent SDV use
cases. 65% of industry executives say customers in 2035 will expect autonomous
driving features, and they project these features will generate $269 in monthly
recurring revenue per customer in 2035 (in today’s dollars).

However, industry leaders anticipate limited adoption of advanced levels of

autonomous driving—Levels 4 and 5 where human override is optional, or humans
are not involved at all. They predict Level 4 and Level 5 autonomous vehicles will
only make up 12% of the market in 2030 and 23% in 2035.

“Even if the technical challenges for high-level autonomous driving are cleared,
regulatory issues and societal acceptance take more time and effort,” says Kenichi
Takagi, Vice President, Connected Systems R&D, Denso International America.

Experts from the Alliance for Automotive Innovation note the importance of having
a federal-level regulatory framework for autonomous driving in the US to support
autonomous driving plans. Some initiatives exist at state or regional levels, but
these are not enough to support widescale commercialization. Industry leaders
and policymakers must also work together to foster public trust in the technology.

“Even if the technical challenges for high-

level autonomous driving are cleared,
regulatory issues and societal acceptance
take more time and effort.”
Kenichi Takagi
Vice President
Connected Systems R&D
Denso International America

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Executives anticipate limited adoption
of advanced levels of autonomous
driving by 2035.
Perspective
Executives anticipate limited adoption of advanced
levels of autonomous driving in 2035

2030 2035

4% 8%
Level 5
Full automation (zero human
attention is required)

8% 15%
Level 4
High automation (automation under
geofencing, human override optional)

26%
15%
Level 3
Conditional automation (environmental
detection, human override required)

29% 22%
Level 2
Partial automation (ADAS)

24% 18%
Level 1
Driver assistance (single
automated system)

20%
11%
Level 0
No automation

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Perspective

Security is non-negotiable
in the SDV era

Over half of the consumers in the IBM IBV 2030 automotive survey said security and
privacy are important brand differentiators.3 With more software and connectivity
come more cybersecurity risks, so security can’t be an afterthought.

However, the lifespan of vehicles makes security exceptionally challenging.

No one knows what threats lie ahead. Each technology advancement—such as AI
and quantum—brings its own unique considerations.4 The ability to roll out security
system updates will be increasingly important. A secure-by-design approach,
embedding security and privacy throughout the product lifecycle, can help
bolster defenses.

Vehicle Security Operations Centers (VSOCs) also play a vital role in monitoring,
detecting, and responding to cybersecurity threats that target vehicles. Given the
challenges of keeping pace with an evolving threat landscape, it’s no surprise that
the percentage of executives who plan to outsource their VSOCs to external experts
grows from 64% today to 74% in 2035.

A secure-by-design approach, embedding

security and privacy throughout the
product lifecycle, can help bolster defenses.

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Streamlining technical complexity
with an architecture rebuild
Turbocharging software development can help unlock
the potential of SDVs.

Vehicle value may no longer be limited to initial features and functionality—it can
be earned over the life of the vehicle by continuously providing superior customer
experiences with new applications and services. 60% of executives expect that
consumers will want to upgrade features and make purchases through over-the-air
(OTA) updates, so that capability becomes essential.

To reach a future where cars are truly digital products, automakers need to convert
their current electrical/electronic (E/E) and software architectures to a simplified
SDV architecture (see Figure 4). The historic approach to vehicle architecture—where
software for a single domain (such as brakes) is delivered separately from another
domain (such as airbags) through individual electronic control units (ECUs)—is not
likely sustainable for the SDV era. As the number of ECUs grows dramatically,
the vehicle control systems become too complex.

Automakers are increasingly moving to highly centralized, powerful high-performance

compute (HPC), or domain control, units that can separate hardware and make
software more manageable and easier to update. But this shift is exposing issues,
with 79% of executives citing the technical complexity of separating the hardware and
software layers as a moderate or significant SDV challenge. In fact, 47% say it is their
number-one challenge.

79%
of executives cite the technical
complexity of separating the hardware
and software layers as a moderate or
significant SDV challenge.

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 ”We need standard interfaces between each
technology layer, especially between the
hardware and software layers, to allow a
healthy SDV ecosystem to grow.”
Masashige Mizuyama
Executive Vice President & CTO
Panasonic Automotive Systems

FIGURE 4

Automakers are moving to a simplified SDV architecture that

supports more efficient vehicle development and updates.

Figure 4
A redesigned, simplified SDV architecture allows
OEMs to develop and update vehicles more efficiently.

Vehicle Edge Cloud Development

architecture architecture architecture tools

In-vehicle Edge Connected Engineering Enterprise

Applications applications (vehicle to X) vehicle & data IT applications
applications backend management
tools

AI and data
Foundation models, governance, data platform
platform
Security

Middleware Cloud services/automation platforms

Hybrid cloud
platform
Edge OS/
In-vehicle OS container Enterprise OS/container platform
orchestration

High-
Computing
performance Edge devices Public and private cloud; on-premises servers
hardware
computing unit

Source: IBM Global Technology and Red Hat

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“A software-defined approach requires system
level thinking at the whole vehicle level,
re-architecting how a vehicle is designed.”
Jack Weast
Vice President and General Manager
Intel Automotive

Many automakers also may need more than a revamped architecture. 80% of
executives say managing the entire SDV product lifecycle is a challenge. 77% cite a
lack of software development tools and methodologies as a moderate or significant
barrier to SDV progress (see case study, “Volkswagen Group builds automated
testing environment”). One of our internal SDV experts observes that auto
companies are adopting Model-Based System Engineering (MBSE) for vehicle
software development as a critical piece for their SDV transition, and those
companies that have integrated the process successfully seem to be getting ahead.

Kenichi Takagi of Denso International America notes, “Integrating the newest

software functions into vehicles is not the most difficult part, but making production
volumes safely and reliably requires additional workloads in testing and validation.”

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Action guide
How can you rebuild your foundation to succeed
with SDV development?

68% of executives say there will be a limited number of standard SDV platforms by
2035. An open architecture can facilitate interoperability and enable best-of-breed
solutions that support differentiating functionality and avoid vendor lock-in.

Consider the following actions:

Explore open-source solutions for non-differentiating areas.

3
A significant portion of the operating system and supporting middleware are
1 common across vehicles and are not likely to deliver a competitive advantage.
These can be prime candidates for open-source solutions. In one survey of
auto decision-makers, 95% of respondents expected open-source software
to enhance flexibility and scalability in SDVs, improving their ability to capitalize
on business opportunities.5 Complementing open-source initiatives, industry-wide
standardization of the middleware interface is another consideration.

Borrow tried-and-true software engineering tools and practices from industries

with more mature digital product development practices.

3
As you move toward creating digital experiences rather than mechanical machines,
2 assess tools that provide visibility across teams by linking requirements to design
models, tests, and workflows. Those that contain integrated templates as well as
processes and reporting for standards and regulatory compliance can help reduce
audit time and costs. Explore the feasibility of using digital models and simulations
to support the entire lifecycle of a vehicle’s software system, from conception and
design to verification and validation.6 Investing in agile and DevOps practices to
enable rapid iteration, continuous delivery, and efficient collaboration between
your development and operations teams can enable you to respond more quickly
to changing consumer demands.

3 3
Pair cloud and AI for a powerful R&D tool. Beyond its traditional role as an
IT infrastructure, cloud can accelerate software development, facilitate rapid
experimentation, and support data-driven decision-making. By harnessing the
power of cloud combined with AI, automakers can explore new ideas, test different
software configurations, and gather valuable insights to inform the development of
innovative SDV features. Using AI to analyze vast volumes of data, identify
patterns, and make predictions, automakers can simulate and optimize SDV
performance and create personalized experiences for customers.

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Case study

Volkswagen Group builds

automated testing environment7

The Volkswagen (VW) Group’s Electric Development department tests and enhances
the ECUs that support intelligent, connected vehicles. The VW Group needed to
change its processes to increase collaboration with the external vendors who
contribute ECU technology. It wanted a standardized architecture and a virtualized,
automated environment for its testing.

To improve testing speeds, scalability, and consistency, the VW Group used Red Hat®
technology to create a mixed-mode testing environment that combines virtual and
real-life testing. With this new environment and an architecture created with Red Hat
Open Innovation Labs, the VW Group improved component integrations, introduced
self-service provisioning, and reduced costs for system tests by 50%.

With an environment that combines virtual

and real-life testing, VW Group reduced
costs for system tests by 50%.

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Shifting gears to realize a
software-defined culture
A deeply ingrained mechanical-driven culture
is a roadblock on the SDV journey.

68% But they don’t expect to have

developed or acquired the talent
needed to achieve their software-
of auto industry
executives say their defined product goals until

2034
SDV transformation
is on track.

More than two-thirds (68%) of auto executives say their SDV transformation is
on track, which is interesting given the culture and talent challenges they face.
For decades, automakers have fine-tuned their craft around precision-engineered
mechanical components and systems. But this mindset is fundamentally at odds
with the agile, iterative, and data-driven approach that brings SDVs to life. The
transition to a software-driven culture is proving to be a significant setback, with
74% of executives saying their mechanical-driven culture is strong and difficult
to change.

The impact of the transition on the workforce’s skillsets is also a major obstacle—
particularly given the increased complexity of vehicle integration. SDVs require
employees to integrate software-driven approaches into both computing hardware
and mechanical hardware, such as body parts, motors, batteries, brakes, and
sensors. This level of integration is far more intricate and less understood than
traditional mechanical and electrical component integration. Several executives
note the conundrum: automakers employ a lot of people who have strong software
skills, and they also employ people who have traditional vehicle development
expertise. But they lack employees who have a strong understanding of both sides.

Nearly three-quarters (69%) of executives say it’s important to have strong SDV
capabilities in-house, but many admit they don’t. 69% report a lack of software skills
as one of their top challenges. In fact, they don’t expect to have developed or
acquired sufficient talent to achieve their goals for software-defined products and
services until 2034.

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Collaboration with the supplier ecosystem can help automakers bridge the gaps.
“It’s important to build a strong SDV ecosystem, and relationships with suppliers
and technology partners will change,” says Takahiro Kato, Corporate Officer,
Corporate Planning, Mitsubishi Motors Corporation. “We are re-evaluating which
areas we should retain in-house.”

But looking toward 2035, executives aren’t intending to change course when it
comes to their ecosystems. They plan to increase in-house capabilities by 18%
for in-vehicle technology areas, such as automated driving assistance systems.
For out-of-car areas, such as vehicle security operations, executives plan to
increase outsourcing by 17% by 2035.

Our in-depth analysis revealed certain factors that influence automakers’ decisions
to outsource SDV capabilities. For example, a lack of software development tools
and methodologies tends to lead to more outsourcing decisions for electronics
and electric requirements and architecture.

Automakers see promise in augmenting their workforce with generative AI solutions,

which can help fill the talent gap sooner. 57% expect gen AI to support developers
with testing and validation and 52% see potential in code generation. They expect
gen AI to boost SDV software development productivity by almost 40% in the next
three years.

“It’s important to build a strong SDV

ecosystem, and relationships with suppliers
and technology partners will change. We are
re-evaluating which areas we should retain
in-house.”
Takahiro Kato
Corporate Officer
Corporate Planning
Mitsubishi Motors Corporation

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Action guide
How can you pivot to a software-defined organization
where innovation thrives?

Weigh how you can create a culture that embraces innovation, continuous learning,
and a willingness to experiment with new technologies. Look at how to empower
teams to work flexibly and collaboratively across functions, boundaries, and
ecosystems while relentlessly pursuing cutting-edge solutions.

Consider the following actions:

Remove organizational silos. A reorganization that allows cross-functional

3
teams—software and electronics hardware engineers, designers, and product
1 managers—to work together better can facilitate software development.
Knowledge-sharing on topics such as vehicle architecture, software platforms,
user experience design, and emerging technologies helps foster understanding
and collaboration. Implementing initiatives such as hackathons and open
innovation platforms can spark experimentation and creativity.

Forge powerful human-AI partnerships. Digital labor can help train and educate

3
your workforce on the skills needed for a software-driven environment. Look for
2 ways AI can equip teams to work more quickly and efficiently in areas such as
coding. Applying AI tools to vehicle security and testing can also help support
safety and reliability as one of the top competitive advantages in 2035.

Reimagine your supplier ecosystem. 58% of automotive CIOs, CTOs,

and CDOs said that changing strategic priorities demand reconfiguring core
business partnerships, and two-thirds said their strategy is to concentrate
on fewer, higher quality partners.8 Re-evaluate your ecosystem to see if you

3 3
can remove any that no longer add value or aren’t contributing to your SDV
transition. Looking for those that embrace open-source technologies can
help support interoperability.

23
Case study

Nobo Technologies empowers its

workforce with digital R&D management9

With software being key to defining automobiles, the R&D scale, process, and team
composition of enterprise software projects were becoming increasingly complex
and difficult to quantify for China’s Nobo Automotive Technologies Co., Ltd. (Nobo
Technologies). The company also found meeting quality management and compliance
objectives more difficult.

Nobo Technologies partnered with IBM to deploy an engineering lifecycle

management solution that provides a seamlessly integrated digital platform for more
efficient management of software development. This solution marked a significant
shift from their traditional manual process management and procedures, which could
not keep pace with their growth. Adhering to the concept that “tools need to serve
people,” Nobo Technologies fully promoted ELM learning internally, and continued to
optimize system processes through continuous practice and user feedback.

Now, using systems and software engineering management tools that provide full
lifecycle development management from early design to final vehicle inspection and
certification, Nobo Technologies has accelerated product R&D innovation, is aligned
with international development practices, and can better manage compliance with
regulations. Design requirements reside in an online system so reports can be run
automatically to share real-time progress. Test results are uploaded and refreshed
daily versus the two weeks to a month that it took before.

24
Authors Study and research
methodology

The IBM Institute for Business Value (IBM IBV), in

cooperation with Oxford Economics, surveyed 1,230
C-level automotive executives in nine countries in Q3
2024. 40% of the sample represented automotive
Noriko Suzuki OEM traditional and EV companies, 40% auto
suppliers, and 20% ecosystem players.
Global Research Leader
Automotive, Electronics, Energy and Utilities Industries
Participants were asked a range of questions
IBM Institute for Business Value
in various formats (multiple choice, numerical,
suzukino@jp.ibm.com
and Likert scale). They were asked about their
linkedin.com/in/norikosuzuki/
organization’s expectations, results, concerns,
and barriers for the industry’s movement toward
electrification, software-defined and autonomous
Daniel Knödler vehicles, and the markets where connected mobility
will be in operation.
Director
Global Sales, Automotive,
The overall goal of the study was to examine how
Aerospace and Defense Industries
traditional automotive OEMs and suppliers can
IBM
transform their operations into software-defined
knoedler@de.ibm.com
organizations driven by a culture that embraces
linkedin.com/in/daniel-knoedler-b91860170/
innovation, continuous learning, and a willingness
to experiment with new technologies. To accomplish
this, the IBM IBV ran a series of contrast analyses,
Hilary M. Cain including pairwise comparisons, multilayer
perceptron neural networks, and data classification
Senior Vice President of Policy
using hierarchical clustering. The highlighted
Alliance for Automotive Innovation
performance result differences are shown in this
hcain@autosinnovate.org
report. Significance level for all analyses was set
linkedin.com/in/hilarycain/
at (p < 0.05) level.

Stefano Marzani
Worldwide Tech Leader
Software-defined vehicles
Amazon Web Services
marzanis@amazon.com
linkedin.com/in/smarzani/

26
Contributors About the Alliance for
Automotive Innovation
The authors would like to thank the following for their
contributions to this report: From the manufacturers producing most vehicles
sold in the US to autonomous vehicle innovators
Rami Ahola, Partner, Global Industry Leader, to equipment suppliers, battery producers and
Industrial Manufacturing, IBM Consulting; Ryan semiconductor makers, the Alliance for Automotive
Coates, Senior Partner, NA Automotive and Industrial Innovation represents the full auto industry, a sector
Industry Leader, IBM Consulting; Brett Hillhouse, supporting 10 million American jobs and five percent
ELM industry leader, IBM Global Sales; Mardan of the economy. Active in Washington, DC and all 50
Kerimov, Associate Partner, NA Automotive, IBM states, the association is committed to a cleaner,
Consulting; Yuhko Nakamura, Senior Partner, Japan safer, and smarter personal transportation future.
Automotive Industry Leader, IBM Consulting; Olivier
Payraud, France Automotive Industry Leader,
IBM Consulting; Gavin Sermon, Senior Partner, About AWS
Automotive, Aerospace and Defense Industry Leader,
IBM Consulting; Hans Windpassinger, Principal Since 2006, Amazon Web Services has been the
Client Engagement, Global Manufacturing Industries, world’s most comprehensive and broadly adopted
IBM Technology; Yoshiaki Saichi, Vice President, cloud. AWS has been continually expanding its
IBM Technology Japan; Bob Monkman, Senior services to support virtually any workload, and it
Principal Product Marketing Manager, Automotive, now has more than 240 fully featured services for
Red Hat; Jun Tang, China Automotive Leader, IBM compute, storage, databases, networking, analytics,
Consulting; Thiago Sartori, Data Scientist, IBM machine learning and artificial intelligence (AI),
Institute for Business Value; Kathleen Martin, Senior Internet of Things (IoT), mobile, security, hybrid,
Managing Consulting, IBM Institute for Business media, and application development, deployment,
Value; Joanna Wilkins, Editorial Lead, IBM Institute and management from 108 Availability Zones within
for Business Value; Sara Aboulhosn, Associate 34 geographic regions, with announced plans for 18
Creative Director, IBM Institute for Business Value; more Availability Zones and six more AWS Regions in
and Tihomir Trifonov, Visual Designer, IBM Institute Mexico, New Zealand, the Kingdom of Saudi Arabia,
for Business Value. Taiwan, Thailand, and the AWS European Sovereign
Cloud. Millions of customers—including the fastest-
growing startups, largest enterprises, and leading
IBM Institute for Business Value government agencies—trust AWS to power their
infrastructure, become more agile, and lower costs.

For two decades, the IBM Institute for Business

Value has served as the thought leadership think About Red Hat
tank for IBM. What inspires us is producing research-
backed, technology-informed strategic insights that Red Hat is the world’s leading provider of enterprise
help leaders make smarter business decisions. open source software solutions, using a community-
From our unique position at the intersection of powered approach to deliver reliable and high-
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27
About Research Insights Notes and sources
Research Insights are fact-based strategic insights
1 Lang, Nikolaus, Daniel Schellong, Philipp Sadek,
for business executives on critical public- and
and Alex Wachtmeister. “Driving Success in
private-sector issues. They are based on findings Car Subscriptions.” BCG. January 10, 2023.
from analysis of our own primary research studies. https://www.bcg.com/publications/2023/
For more information, contact the IBM Institute for the-rise-of-the-car-subscription-market
Business Value at iibv@us.ibm.com.
2 2024 C-suite series. 6 blind spots technology leaders
must reveal: How to drive growth in the generative AI era.
IBM Institute for Business Value. August 2024. https://

The right partner for ibm.co/cxo-tech. Unpublished data for 152 automotive
industry executives.
a changing world 3 Knödler, Daniel, Dirk Wollschlaeger, and Ben Stanley.
Automotive 2030: Racing toward a digital future. IBM
At IBM, we collaborate with our clients, bringing Institute for Business Value, September 2019. https://
together business insight, advanced research, and www.ibm.com/thought-leadership/institute-business-
value/en-us/report/auto-2030
technology to give them a distinct advantage in
today’s rapidly changing environment. 4 Rodgers, Clarke, Moumita Saha, Dimple Ahluwalia, Kevin
Shapinetz, and Gerald Parham. Securing generative AI:
What matters now. IBM Institute for Business Value in
partnership with AWS. May 2024. https://ibm.co/
Related reports securing-generative-ai; Harishankar, Ray, Dinesh
Nagarajan, Dr. Walid Rjaibi, Gerald Parham, and Veena
Pureswaran. The quantum clock is ticking: How quantum
Digital cars need digital automakers: An integrated
safe is your organization? IBM Institute for Business
hybrid cloud strategy is the first step Value in partnership with GSMA. May 2024. https://ibm.
IBM Institute for Business Value in partnership with co/quantum-safe
AWS, April 2024
5 Harris, Jacob. “Eclipse Foundation Releases Landmark
https://ibm.co/automotive-hybrid-cloud
Report on Open Source Software in Automotive
Design.” Eclipse Foundation press release. September
Securing connected vehicles 10, 2024. https://newsroom.eclipse.org/news/
announcements/eclipse-foundation-releases-
IBM Institute for Business Value, January 2024
landmark-report-open-source-software-automotive
https://ibm.co/data-story-connected-vehicles-se-
curity 6 “What is model-based systems engineering (MBSE)?”
IBM website. Accessed November 15, 2024. https://
www.ibm.com/topics/model-based-systems-
An on-ramp to sustainable mobility: Accelerating engineering; “The 3 Steps Ford Took to Improve Its
the shift to electric vehicles Systems Engineering Approach.” The Curve – MIT
blog. February 12, 2020. https://curve.mit.edu/
IBM Institute for Business Value, January 2023
ford-improved-its-systems-engineering-approach
https://ibm.co/sustainable-mobility
7 “The Volkswagen Group builds automated testing
environment.” Red Hat success story. Accessed
November 15, 2024. https://www.redhat.com/
en/success-stories/the-volkswagen-group

8 2024 C-suite series. 6 blind spots technology leaders

must reveal: How to drive growth in the generative AI era.
IBM Institute for Business Value. August 2024. https://
ibm.co/cxo-tech. Unpublished data for 152 automotive
industry executives.

9 “Nobo Technologies joins hands with IBM

to co-create a new generation of digital R&D
management that empowers future vehicle design.”
IBM case study. Accessed November 15, 2024.
https://www.ibm.com/case-studies/nobo

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