Vehicle of the Future initiative

Software-defined vehicles 

The automotive industry is undergoing a deep transformation as vehicles become increasingly defined by their electronic hardware and software capabilities rather than traditional mechanical components. We have entered the era of software-defined vehicles (SDVs). 

In this quickly evolving landscape, the EU’s automotive industry is facing several challenges, which affect its competitiveness and sovereignty. Following two workshops in 2022 and 2023 with key players from the EU automotive industry, a Concept Paper was published, summarising the main challenges and the role that the European Commission could play to support it. Since then, the European Commission has implemented the Vehicle of the Future initiative, which strives to strengthen the EU’s competitiveness and leadership across the automotive value chain. 

This initiative will foster collaboration among stakeholders in a set-up largely based on open-source development. The focus will also be on building a critical mass of investment needed to maintain the EU’s industry leadership. Overall, initial actions under EU research and innovation partnerships represent a €250 million investment for 2023-2024 by the EU Member States and industry. 

The Vehicle of the Future initiative is encompassed within the Chips Act, Europe’s chance to reinforce the competitiveness and resilience of key semiconductor application sectors, such as automotive. This requires a strategy addressing the security of semiconductor supply whilst helping the industry to create open ecosystems for automotive software and hardware.

Initial investment

Overall, initial actions under EU research and innovation partnerships represent a €250 million investment for 2023-2024 by the European Commission, EU Member States and industry. Future priorities include establishing a sustainable collaboration structure and investment roadmap while preparing for market deployment with a distributed pilot facility enhanced by artificial intelligence.

In parallel, over €100 billion in investments from private investors and Member States into chips fabrication, packaging, testing and assembly have been announced under the European Chips Act, with a high share of announced investments targeting chip production for the automotive industry. European industries like automotive will benefit from more reliable local supply chains and products tailored to their needs.

Next steps

To ensure the success of the Vehicle of the Future initiative, options are being investigated to enable sustainable collaborations across industrial partners, as well as to create an investment roadmap, while preparing for market deployment with a distributed pilot facility enhanced by artificial intelligence. 

An upcoming priority is to address the widening gap between software development complexity and productivity. The progress of Artificial Intelligence (AI), notably generative AI, opens new possibilities to overcome this challenge, through enhanced automation at all stages of the engineering processes. 

Finally, supporting the piloting of emerging software and hardware platforms is essential to driving market adoption and shape the development of next-generation vehicles.

Contact: European Commission - DG CNECT - Unit E.4 - Internet of Things