"Software Has Become the Primary Value Driver in Automotive": Vector Informatik

Dr Matthias Traub, President & Managing Director, Vector Informatik GmbH, on software-defined vehicles, AI-driven development, automotive software ecosystems and what India must do to emerge as a leader in software-defined mobility.

Software-defined vehicles have evolved from being a technology buzzword into one of the automotive industry’s most important strategic priorities. As vehicles become increasingly connected, software-driven and updateable throughout their lifecycle, the conversation is expanding beyond electronics and code to include organisational structures, development methodologies, partnerships and engineering talent.

At the same time, artificial intelligence is beginning to influence almost every aspect of vehicle development, from software engineering and validation to ADAS and future mobility services.

For India, the timing is particularly significant. The country has emerged as a major engineering and software hub for the global automotive industry. Yet despite growing attention around software-defined vehicles, the transition from traditional vehicle development to truly software-defined mobility remains a work in progress.

In an interaction with Autocar Professional, Dr Matthias Traub, President & Managing Director, Vector Informatik GmbH, discusses why software has become the automotive industry’s primary value driver, why ecosystems are replacing isolated development approaches, how AI is reshaping engineering workflows and what India must do to emerge as a key player in software-defined and AI-defined mobility.

Software-defined vehicles have become one of the industry’s most discussed topics over the last decade. What changed?

For me, the biggest change is that software has become the primary value driver for the automotive industry, but also for many other industries.

Customers have become used to seamless software updates, continuous improvements and new functionalities. Expectations that originated in consumer electronics are now shaping automotive as well.

Products are increasingly evolving into interconnected software-driven systems, while AI is accelerating development speed and enabling organisations to build far more sophisticated systems than before.

The challenge for OEMs today is no longer only about building vehicles. The core task is managing increasingly complex software-driven systems together with suppliers, engineering partners and technology companies.

That is why SDVs have become such an important topic. Software is no longer a supporting function. It is becoming one of the main drivers of value creation.

Software was traditionally seen as a supporting function. Why is it now becoming the primary value driver?

It is not only about adding new features. Customers also expect robustness, reliability and continuous improvements.

Software products require bug fixes, security updates and ongoing maintenance. In automotive, that becomes even more important because we operate in a highly regulated environment with significant safety requirements.

Differentiation is increasingly shifting from hardware towards software capabilities, many of which are being enabled by AI. Vehicles remain on the road for many years, meaning software determines adaptability, innovation speed and long-term competitiveness throughout the product lifecycle.

This is why software has become much more than a supporting element. It is increasingly central to how automotive companies differentiate themselves.

You spoke about software ecosystems. How is that different from the traditional automotive development model?

Traditionally, many development approaches were tool-driven or platform-driven. In a software-defined world, that is no longer enough.

To build truly software-driven applications, organisations need a real software ecosystem. Architecture, toolchains, safety, security and software functionality all need to work together in an integrated manner.

One of the most important principles is that the focus must lie on end-to-end consistency instead of isolated optimisations.

In the past, organisations often optimised individual parts of the development process independently. Today, software complexity has become so high that this approach creates inefficiencies and slows development.

As complexity grows, organisations need scalable development environments. That is why Vector increasingly sees itself as an SDV solution partner, helping customers establish the foundations required for software-defined mobility.

Why has automotive become the centre of the software-defined systems revolution?

Automotive has become the centre of this revolution because it is one of the most complex software systems we have today.

Modern vehicles must manage large numbers of sensors, actuators, ADAS functions and increasingly sophisticated computing platforms. Whether we are talking about EVs, hybrids or ICE vehicles, software is becoming central to how these systems operate.

Cars remain on the road for many years, which means software has to remain maintainable and updateable throughout that lifecycle while meeting demanding safety and security requirements.

Many organisations still operate fragmented tool environments. What the industry increasingly needs is a seamless development framework that allows OEMs to focus on customer-facing innovation rather than repeatedly solving foundational software challenges.

India has discussed software-defined vehicles extensively over the last few years, yet truly software-defined vehicles remain limited. What is holding the industry back?

The industry needs the right technologies, the right skillsets and the right organisational structures.

Many discussions around SDVs focus primarily on technology. Technology is important, but organisational transformation is equally important.

Companies need to rethink how OEMs interact with suppliers and engineering partners. Traditional hierarchical models become less effective in a software-defined environment.

Mixed teams from OEMs, suppliers and engineering companies increasingly need to work together to solve problems collectively. This requires a mindset shift, a leadership shift and environments where collaboration becomes the norm.

If the industry wants to move from SDV concepts to commercially successful software-defined vehicles, it needs the right technology, competencies and organisational culture.

How must OEM-supplier relationships evolve in the SDV era?

Software-defined vehicles require a much closer level of cooperation between OEMs, suppliers and engineering companies.

The relationship needs to move towards what I call working at eye level.

Instead of arguing about responsibilities, organisations need to focus on finding solutions. At the end, the result counts.

This is not only a process change. It is also a leadership challenge. Leaders need to create cultures that encourage collaboration across organisational boundaries.

The companies that succeed in the SDV era will be those that establish effective partnerships and build environments where expertise can be shared efficiently.

How do you see AI and software-defined vehicles evolving together?

The first thing organisations need to understand is that AI is not something you can simply add on top of existing development processes.

Before companies can fully benefit from AI, they need to change how they develop software. The traditional V-model must increasingly give way to DevOps approaches built around continuous integration, continuous software development and agility.

AI should not be viewed from a local optimisation perspective. When you introduce agentic-driven workflows, it becomes an end-to-end journey.

At the same time, human expertise remains essential. Engineers still need to provide the right inputs, define the right requirements and ensure AI systems are moving in the intended direction.

AI systems can hallucinate, which is why experienced engineers remain indispensable. AI can accelerate development significantly, but outputs still require expert review.

The combination of AI, DevOps and software-defined architectures has the potential to transform vehicle development. But organisations must change not only their tools, but also their workflows and mindset.

How will AI change the role of automotive software engineers?

I think this will be one of the biggest changes the industry experiences over the next decade.

Historically, when we talked about software engineers, the key skill was writing code. Now, this is done by the agents more and more.

Engineers will need much stronger systems expertise. They need to understand how to define requirements, structure problems and provide the right inputs to AI-enabled development systems.

This does not mean software knowledge becomes less important. Engineers still need a deep understanding of software and code to evaluate AI-generated outputs.

Instead of writing every line of code themselves, engineers will increasingly focus on systems thinking, architecture, validation and quality assurance.

Companies therefore need to rethink how they train and upskill engineering teams around systems engineering, AI supervision and requirement definition.

The key skill was to write code. And now, this is done by the agents more and more.

ADAS remains one of the most visible technologies for consumers. Why does it continue to be challenging in India?

Many people immediately point to road infrastructure, traffic behaviour and the complexity of Indian roads.

Those challenges certainly exist. From a technology perspective, however, many of them can eventually be addressed through better sensors, improved perception systems and increasingly sophisticated algorithms.

The larger challenge today is cost.

The industry is trying to move from Level 2 systems towards higher levels of automation. That requires additional sensors, greater computing performance and more complex software architectures.

The challenge is therefore not only technological. It is economic. Manufacturers need to create systems that customers perceive as valuable while keeping vehicles affordable.

This challenge exists globally, but it is particularly relevant in India, where affordability remains a critical factor in purchasing decisions.

What role will simulation, virtual validation and integrated toolchains play in the future development of ADAS and autonomous technologies?

They will be absolutely critical.

Physical testing alone is not sufficient to validate modern ADAS systems at scale. Manufacturers need the ability to generate and evaluate millions of kilometres worth of scenarios in virtual environments.

AI is also becoming increasingly important in this area, helping generate scenarios, improve validation processes and support the development of more robust systems.

Engineers need fast feedback across virtual, hardware-in-the-loop and real-world validation environments.

Integrated development environments provide traceability and consistency throughout the validation process. The faster companies can validate software safely and reliably, the faster they can innovate.

How should AI be used in safety-critical automotive systems?

There are two dimensions to this discussion.

The first is AI inside the vehicle itself, where it can improve perception, decision-making and trajectory planning.

The second is AI within the development process, where it helps engineers work faster and manage larger functional scopes.

Both opportunities are significant, but safety-critical systems must remain certifiable. Trust, validation and transparency become essential.

Engineers and customers need confidence in AI-generated outputs. They need to understand how decisions are made and how systems behave.

No black-box behaviour can be implemented. We need full transparency.

That is why traceability matters so much. Organisations need development processes that are reproducible and auditable. Without trust, the adoption of AI in safety-critical environments will remain limited.

How are semiconductor companies and technology providers reshaping the automotive ecosystem?

Semiconductor companies are no longer simply suppliers of chips.

Increasingly, they are delivering system-level solutions, particularly in areas such as ADAS and high-performance computing. This is changing traditional relationships across the automotive value chain.

Partnerships are becoming increasingly important. Software providers, semiconductor companies and OEMs need to collaborate more closely to create foundational software platforms and integrated solutions

This allows OEMs to focus more resources on features that customers actually see and use rather than repeatedly solving foundational technical challenges.

The industry is also seeking greater speed, moving from concept to product much faster than traditional development cycles allowed. Stable ecosystems and co-creation models will become increasingly important as software complexity continues to grow.

Looking ahead five years, where do you see India in the software-defined mobility journey?

My vision is that India operates at the same speed and with the same working environment that we see in Germany, China and the United States today.

India has strong engineering talent, a growing automotive ecosystem and an increasingly important role in global software development.

The opportunity now is to combine those strengths and establish India as a key player in software-defined and AI-defined mobility.

Achieving that will require continued investment in skills, collaboration and development ecosystems, but the foundations are already there.

The DNA of future mobility is software-driven and AI-enabled. My hope is that five years from now, India will be operating at eye level with the world’s leading software-defined mobility ecosystems.