“Collaboration models between OEMs and Tier-1 suppliers are frequently underdeveloped”

As the automotive industry accelerates toward SDVs, Friedel offers a grounded view of the sector’s current progress and pitfalls. While tech-driven entrants like Tesla are pushing boundaries with integrated stacks and fast iteration, Friedel highlights how traditional OEMs are now rapidly catching up by leveraging deep automotive expertise and scaling capabilities.

With his team, Friedel supports clients from various industries, such as manufacturers, suppliers, and mobility startups. He studied mechanical engineering and management at the TU Munich and subsequently worked for well-known startups such as Uber, Blacklane, and Rocket Internet. Before joining MHP, he held various strategic positions at Volkswagen.

ADT: What are the main roadblocks currently slowing down industry-wide SDV implementation?

Friedel: The complexity of existing E/E architectures and the challenge of integrating legacy systems definitely pose some of the main roadblocks slowing down the industry-wide SDV implementation. Additionally, the severe shortage of skilled professionals in software and AI slows down development significantly. Regulatory hurdles, particularly in safety and cybersecurity, add further layers of complexity to bringing SDV solutions to market. Another critical issue is the lack of standardized platforms and scalable over-the-air (OTA) infrastructure, which are essential for efficient deployment and updates. Many organizations fail to adequately address the internal transformation required to shift toward a software-centric mindset. Furthermore, collaboration models between OEMs and Tier-1 suppliers are frequently underdeveloped or even entirely missing. The industry's current focus on flagship projects rather than rapid scaling across entire product portfolios is limiting the broader adoption of SDV technologies.

How do you assess the maturity of SDV initiatives across OEMs versus tech-driven entrants?

There is a clear contrast between the two. Tech-driven entrants like Tesla and Nio are leading the way when it comes to software innovation. They've built fully integrated in-house software stacks, have highly effective OTA capabilities, and operate with fast, data-driven development cycles. Their focused approach to AI and autonomy allows them to move quickly and iterate faster than most traditional players. However, tech players still face some hurdles, especially when it comes to deep automotive know-how. This often leads to early challenges in execution, but they're learning fast. The real issue is the sustainability of their business models. Many are still operating at a loss and rely heavily on investor funding without generating positive cash flow.

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In the lead-up to the 6th International Conference on Automotive Software Strategies, we asked Dr. Thomas Raste, Principal Expert in Vehicle Dynamics at Continental, three questions. The event will take place on 21 and 22 May 2025 in Munich, Dr. Raste is one of the speakers.

Benjamin Müller

OEMs, on the other hand, tend to take a partnership-driven route, working with companies like Microsoft, AWS, or Horizon Robotics. That will slow things down a bit, but it will also give them access to specialized expertise. OEMs are unparalleled in their ability to scale. They have decades of experience in global production, quality assurance and bringing vehicles to market at scale – and they are picking up speed. Some have already reached the point of serial production for SDV-ready vehicles, and we expect broader scaling over the next 6 to 18 months. They are also accelerating development in key markets to stay competitive. It is clear that while tech entrants are setting the pace in software, OEMs are definitely catching up. They have the industrial backbone and market reach to deliver SDV at scale.

How do German SDV projects differ from SDV projects in other countries?

German SDV projects definitely have their own character, even if they don’t fundamentally differ from those in other European countries or traditional U.S. OEMs. A main difference is the strong emphasis on quality and long-term reliability over sheer speed. There's a clear focus on doing things right – especially when it comes to safety and cybersecurity, where standards are particularly high. Another key difference is how closely German OEMs work with Tier-1 suppliers, and we're also seeing an open-source mindset beginning to take hold, especially for future vehicle platforms. This will drive more collaboration and transparency across the ecosystem. Most SDV efforts in Germany are currently starting in the premium segment, with players like BMW and Mercedes leading the way. The rollout to volume models is planned over the next few years. This is a more cautious, phased approach compared to some international players who aim for speed and broad market coverage right away.

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