U.S. Software-Defined Vehicles Market (2025 - 2033) Size, Share & Trends Analysis Report By Deployment Mode, By Type (Autonomous Software-Defined Vehicles, Connected Software-Defined Vehicles), By End Use (Autonomous Driving, Infotainment Systems), And Segment Forecasts

Market Size & Trends

The U.S. software-defined vehicles market size was estimated at USD 7.63 billion in 2024 and is projected to reach USD 70.82 billion by 2033, growing at a CAGR of 28.2% from 2025 to 2033. The U.S. Software-Defined Vehicle (SDV) market growth is driven by the increasing integration of AI into vehicle systems. Automakers are focusing on utilizing advanced software platforms to enhance vehicle functionality and performance. This trend is promoting the development of more intelligent and adaptable in-vehicle systems. It is also encouraging frequent software updates and continuous feature improvements. The emphasis on AI and software innovation is accelerating the transformation toward fully software-defined vehicles in the U.S. For instance, in March 2025, General Motors, a U.S.-based automotive company, announced an expanded partnership with NVIDIA to integrate AI into its future vehicles and manufacturing processes. The partnership will utilize NVIDIA's Omniverse platform to create digital twins of factories, improving efficiency, and will use NVIDIA DRIVE AGX for advanced driver-assistance systems and in-vehicle experiences.

A stronger emphasis on software-driven vehicle functionality is driving the U.S. software-defined vehicles industry. Automakers are prioritizing continuous improvements and updates to enhance vehicle performance. Advanced system integration is becoming a key focus to ensure seamless operation across vehicle components. This approach allows vehicles to be more adaptable and responsive to user needs. The shift toward software-centric design is accelerating the growth of the SDV market in the U.S. For instance, in August 2025, Ford Motor Company announced its Universal EV platform, which will support a range of affordable, software-defined electric vehicles starting with a $30,000 mid-size pickup truck slated for production in 2027. The platform and its new production system are designed to reduce costs, improve efficiency, and enable advanced features such as over-the-air updates and hands-free driving.

Over-the-air (OTA) updates have become an essential component of modern vehicle design, allowing manufacturers to remotely deliver comprehensive software improvements and introduce entirely new functionalities without requiring a visit to a service center. This capability enables vehicles to receive critical performance optimizations, security patches, and bug fixes directly from the manufacturer in a timely and efficient manner, ensuring both safety and reliability. Beyond maintenance, OTA updates allow automakers to continuously add innovative features and enhance the user experience over the vehicle’s entire lifecycle. Drivers benefit from a more personalized and adaptive driving experience, as software can be customized to their preferences and usage patterns. The widespread adoption of OTA updates is transforming vehicles into dynamic, continuously evolving platforms that combine convenience, efficiency, and advanced technological integration.

Deployment Mode Insights

The on-board (edge) segment dominated the U.S. software-defined vehicles market in 2024 with a market share of 63.3%, due to its ability to process data locally within vehicles, enabling real-time decision-making for safety and performance-critical functions. Edge computing reduces latency and dependence on external networks, which is crucial for autonomous and advanced driver-assistance systems. It ensures faster response times and higher reliability, even in areas with limited connectivity. Manufacturers favor this approach because it provides greater control over data security and privacy. On-board computing remains the primary deployment mode driving the growth and adoption of software-defined vehicles in the U.S.

Cloud-based solutions are gaining momentum in the U.S. software-defined vehicles industry due to their ability to deliver real-time updates and remote management capabilities. They enable automakers to deploy software improvements without requiring physical access to vehicles. By centralizing data and analytics, cloud platforms enhance decision-making for vehicle performance and safety. Integration with cloud services supports advanced applications such as over-the-air updates, predictive maintenance, and infotainment enhancements. As the SDV market evolves, cloud-based solutions are becoming a critical component for scalability and innovation.

Type Insights

Connected Software-Defined Vehicles dominated the U.S. software-defined vehicles market in 2024, due to their ability to integrate real-time communication and connectivity features. These vehicles enable seamless data exchange between the vehicle, infrastructure, and cloud platforms, enhancing safety and user experience. Their dominance is driven by widespread adoption of advanced driver-assistance systems and infotainment services. Automakers are increasingly focusing on connected vehicle technologies to differentiate their offerings and meet consumer expectations. The high demand for over-the-air updates further reinforces their position in the market. Connected SDVs continue to hold a leading share by offering a combination of convenience, safety, and advanced functionality.

Electric Software-Defined Vehicles are experiencing strong growth in the U.S. software-defined vehicle industry as automakers invest in electrification technologies. These vehicles combine electric powertrains with advanced software capabilities to optimize performance, energy efficiency, and driving experience. The growing adoption of EVs is accelerating the integration of software-defined features such as predictive maintenance and intelligent energy management. Regulatory incentives and environmental concerns further support the expansion of electric SDVs. Manufacturers are developing innovative software solutions to enhance connectivity, safety, and autonomous driving features in these vehicles.

End Use Insights

Advanced Driver-Assistance Systems (ADAS) have dominated the U.S. software-defined vehicle market in 2024, due to their ability to enhance safety and driving convenience. These systems provide features such as adaptive cruise control, lane-keeping assistance, and collision avoidance. ADAS reduces human error by supporting real-time decision-making and situational awareness. Automotive manufacturers have heavily invested in ADAS technologies to meet regulatory requirements and consumer expectations. The widespread adoption of sensors, cameras, and radar contributes to the segment’s strong market presence.

Autonomous driving is experiencing significant growth as software-defined vehicles evolve toward higher levels of automation. These vehicles utilize advanced algorithms, sensors, and connectivity to navigate without human intervention. The growth is supported by increasing investments in artificial intelligence, machine learning, and sensor technologies. Regulatory frameworks and pilot programs in various regions are accelerating the deployment of autonomous driving solutions. Automakers are integrating autonomous capabilities to enhance efficiency, safety, and user experience. Consequently, autonomous driving is emerging as a rapidly expanding area within the software-defined vehicle market.

Key U.S. Software-Defined Vehicles Company Insights

Some of the key companies in the U.S. software-defined vehicles industry include Aptiv PLC; Aurora Operations, Inc.; Ford Motor Company; General Motors (GM); and Mobileye. Organizations are focusing on increasing their customer base to gain a competitive edge in the industry. Therefore, key players are taking several strategic initiatives, such as mergers and acquisitions, and partnerships with other major companies.

• Tesla, Inc. has advanced software-defined vehicle development through its over-the-air updates that continuously improve vehicle performance and functionality. The company integrates ADAS and autonomous driving features into its electric vehicles. Its in-house software platform enables real-time data processing and vehicle-to-cloud connectivity. Tesla’s approach emphasizes seamless integration of software and hardware to enhance user experience and safety.

• Ford Motor Company is developing software-defined vehicles by implementing a flexible electronic architecture across its models. The company focuses on connected services, advanced driver-assistance systems, and over-the-air software updates. Ford invests in cloud-based platforms to enable data-driven insights and vehicle optimization. Its development strategy aims to combine connectivity, automation, and electrification for next-generation mobility.

Recent Developments

• In August 2025, Aurora Innovation, Inc., a U.S.-based autonomous vehicle company, announced a strategic partnership with McLeod Software to develop the industry’s first Transportation Management System (TMS) specifically designed for self-driving trucks. This integrated system allows carriers and fleet operators to seamlessly track, oversee, and manage autonomous truck operations, streamlining load tendering, dispatch, and real-time visibility into freight movements.

• In March 2025, Volkswagen Group collaborated with Valeo and Mobileye to enhance Level 2+ advanced driver-assistance systems in its upcoming MQB-based vehicles, integrating cameras, radars, and centralized software for hands-free driving, smart parking, and improved safety. This collaboration combines high-performance ECUs, sensors, and Mobileye’s Surround ADAS platform, enabling over-the-air updates and streamlined hardware-software integration for efficiency and cost-effective development.

U.S. Software-Defined Vehicles Market Report Scope

U.S. Software-Defined Vehicles Market Report Segmentation

This report offers revenue growth forecasts at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Grand View Research has segmented the U.S. software-defined vehicles market report based on deployment mode, type, and end use:

• Deployment Mode Outlook (Revenue, USD Billion, 2021 - 2033)

  • On-Board (Edge)

  • Cloud-Based

• Type Outlook (Revenue, USD Billion, 2021 - 2033)

  • Autonomous Software-Defined Vehicles

  • Connected Software-Defined Vehicles

  • Electric Software-Defined Vehicles

  • Infotainment and Comfort Software-Defined Vehicles

  • Hybrid Software-Defined Vehicles

• End Use Outlook (Revenue, USD Billion, 2021 - 2033)

  • Advanced Driver-Assistance Systems (ADAS)

  • Autonomous Driving

  • Infotainment Systems

  • Electric Vehicle (EV) Management

  • Vehicle-to-Everything (V2X) Communication

  • Personalization