The Dispatch: Week 8
Will the tariff turmoil impact the SDV market? Big layoffs at Nissan and Continental. India's EV Boom. Global auto software industry to hit $92B by 2032.
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HAPPY FRIDAY! It’s February 21st and the 8th week of 2025 —that means it’s time to break down the biggest news impacting the SDV landscape. This week, one topic dominated the headlines—tariffs. Automakers are scrambling to assess the potential fallout of a proposed 25% U.S. auto import tariffs, with major players like Mercedes-Benz, Ford, and Nissan warning of higher prices, production shifts, and long-term industry disruption. While trade policies don’t always make for the flashiest news, this one could have ripple effects on software investment, cloud infrastructure, and the SDV market as a whole. Let’s get into it.
🚀 Top Story
Tariff Turmoils: Auto Giants Warn of Price Hikes, Production Shifts, and Industry Chaos
The proposed 25% U.S. auto tariffs are sparking widespread concern among automakers and global trade partners. Mercedes-Benz CEO Ola Källenius warns the tariffs could hurt both U.S. and international manufacturers, citing the company’s Alabama plant, where many vehicles are exported globally. GM CFO Paul Jacobson suggests tariffs could force the company to reassess plant locations and production strategies, while Ford CEO Jim Farley says they could “blow a hole” in the industry, raising consumer prices and benefiting foreign competitors. BMW’s Chief Purchasing Officer Joachim Post downplays the impact, citing the company’s strong U.S. production base in South Carolina. Nissan CEO Makoto Uchida notes that tariffs could push the company to shift production out of Mexico.
On the trade front, the EU is negotiating to avoid an all-out trade war, with Commissioner Maroš Šefčovič reporting “positive momentum” in talks. Meanwhile, Germany’s VDA industry group calls tariffs the “wrong negotiating tool”, warning of global economic harm. Analysts estimate that tariffs could increase the price of a $25,000 imported vehicle by $6,250, reducing demand, triggering supply chain shifts, and forcing manufacturers to rethink long-term strategies. The industry is bracing for significant disruption as trade policies evolve.
Our Take
Will the tariff turmoil impact the SDV market? The 25% auto import tariffs aren’t just about manufacturing—they could ripple into the SDV market, impacting software innovation, cloud connectivity, and digital services. Beyond supply chains, tariffs could slow SDV innovation, fragment software strategies, and push automakers toward new revenue models. At the same time, it creates opportunities for tech firms to fill emerging gaps. Here are a few ways this could play out:
Fragmentation of Software & Data Strategies: If production shifts regionally, software architectures may become even more siloed than they are today, making global OTA updates and regulatory compliance harder to manage.
Acceleration of Software Monetization Models
Automakers may need to double down on subscriptions and pay-per-use features to offset costs—but consumer resistance to software paywalls will remain a challenge.A Boost for U.S. Based SDV and Cloud Providers
If tariffs increase localization, U.S.-based software, AI, and cloud firms could see increased demand as automakers seekout domestic partners. This demand is perhaps being further amplified with U.S. ban on Chinese imports of connected vehicle technology.
👀 What We’re Tracking
Volkswagen Group and CGI Expand Global Collaboration
Volkswagen Group has expanded its partnership with IT consulting firm CGI to accelerate its digital transformation through a newly formed joint entity they are calling MARV1N (pronounced “Marvin”). While much of MARV1N’s focus will be on modernizing back office IT systems, it will also aim to consolidate data across all electrical/electronic architecture and software functions—from pre-series development to after-sales service to streamline software updates and enable faster development of digital products like Functions on Demand for Volkswagen customers.
Our Take
Volkswagen is no stranger to software headaches, and MARV1N looks like their latest play to untangle some of the mess. After sinking $12B into CARIAD, only to end up with delays, lost revenue, and frustrated execs, VW clearly wants to course-correct—but the big question is will this actually work?
Their $5.8B Rivian partnership is another bold bet, but Rivian itself is still fighting financial turbulence despite hitting its first positive gross profit in Q4 2024. So while both moves sound promising on paper, history shows that software integration at this scale is never simple.
The upside? Volkswagen is leaning more on outside expertise (CGI and Rivian) rather than going it alone like with CARIAD—which might finally get them the fast, flexible software they need. If MARV1N can actually streamline development instead of adding another layer of bureaucracy, this could be a turning point. Otherwise, it’s just another expensive software experiment.
Cognizant and Elektrobit Partner to Advance Software-Defined Vehicles
Cognizant and Elektrobit have announced a collaboration to accelerate the development of software-defined vehicles (SDVs) by integrating Elektrobit’s automotive software development kit (SDK) with Cognizant’s digital engineering expertise. This partnership aims to provide automakers with pre-integrated, scalable software solutions, reducing development time and enabling faster deployment of next-generation vehicle architectures. Key areas of focus include enhanced connectivity, advanced driver assistance systems (ADAS), over-the-air (OTA) software updates, and more efficient software lifecycle management. By streamlining SDV development, this collaboration seeks to help manufacturers adapt to the industry's growing shift toward modular, updatable vehicle software platforms.
Our Take:
Another SDV partnership hits the scene, but will it move the needle or just add more software noise? Cognizant and Elektrobit teaming up makes sense—Elektrobit has the SDKs, Cognizant has the digital engineering muscle—but the real test will be getting these solutions into real-world automotive production.
If this partnership truly helps standardize SDV software development, automakers could speed up deployment of modular, updatable architectures—something the industry desperately needs. But if this just turns into another outsourced software service, it risks blending into the sea of "we'll help you build your SDV" pitches already flooding the market.
That said, collaborations like this are crucial. The SDV winners will be the ones who nail real-time diagnostics, ADAS updates, and vehicle personalization—and do it fast. If Cognizant and Elektrobit can actually deliver seamless, scalable solutions, this could be a step forward for automakers racing to keep up with the software revolution.
📰 Industry Pulse
Android Automotive Expands App Ecosystem: Google's Android Automotive OS is adding 70 new apps (pushing the total to nearly 300), including popular navigation, streaming and communication tools, broadening the in-vehicle user experience.
Nissan will cut 9,000 jobs and 20% of global manufacturing capacity after merger talks with Honda failed. These cuts aim to save $2.6 billion.
Continental AG will cut around 3,000 jobs in its automotive R&D sector by the end of 2026. This is ~10% of its global R&D workforce and “Conti” attributes these cuts to the industry's shift toward future technologies and changing market conditions.
REE Automotive Collaborates with Geotab: REE Automotive has partnered with Geotab to integrate advanced telematics into REE's modular electric vehicle platforms, enhancing fleet management capabilities.
📊 Market Trends & Insights
🇮🇳 🇮🇳 India’s EVs on the Road to Surpass 28 Million by 2030: IESA Report
According to a report by the India Energy Storage Alliance, India's EV count is expected to see about 30% growth from 4-5 million units on the road in 2023-2024 to over 28 million by 2030. This future growth is projected to be 83% two-wheelers, 10% four-wheelers and 7% commercial vehicles by 2030. As a result, the energy demand for EV charging will increase almost tenfold from 4,000 GWh in 2024-2025 to 38 TWh by 2031-2032. In India, we see companies like Bajaj Automotive leading the SDV revolution for 2-wheelers with their smart electric Chetak lineup. And on the passenger vehicle front, it’s Mahindra, who recently launched their new lineup of Electric Origin SUVs (dubbed the BE 6 and XEV 9e) powered with modern connected features, provided in partnership with California-based SDV tech company Sibros.
Automotive Software Market Projected to Reach $91.86 Billion by 2032
Fortune Business Insights latest report update on the global automotive software market, demonstrates it is experiencing robust growth, with projections estimating its value to reach $91.86 billion by 2032, up from $31.71 billion in 2024. This expansion is driven by the increasing adoption of advanced driver assistance systems (ADAS), autonomous driving technologies, and the shift toward software-defined vehicles.
🔥 Social Buzz
AI is Revolutionizing Vehicle Inspections—But the Real Game Changer is Under the Hood
A Florida reporter was stunned when an AI-powered diagnostic system at her local dealership detected 76 external issues in under 30 seconds. Developed by Israeli startup UVeye, this cutting-edge computer vision tech is transforming external vehicle inspections, already securing major partnerships with GM and raising $191M in January, bringing total funding to $385.5M.
But if AI can do that just by scanning a car’s exterior, imagine what’s next. With —and 30% or more of recalls tied to software failures—AI-driven smart diagnostics are the next frontier. These systems can analyze vast amounts of vehicle data, predict failures, and even deploy over-the-air fixes before a trip to the mechanic is needed. The future of vehicle maintenance isn’t just about what AI can see—it’s about what it can anticipate. 🚗💨 🤖 🔧
📅 Events & Webinars
AutoTech 2025: Early bird discounted tickets are now available for this annual gathering of 3000 industry professionals hosted by Wards Auto that dives into the cutting-edge world of tomorrow’s automotive innovations with 150 content tracks and sessions. Register here.
Note: Event details are subject to change; please refer to official event website for the most current information.
✅ That’s a Wrap!
That’s all for this week’s SDV Insider Dispatch! What trends are on your radar? Reply and let us know.
See you next week!
🚗 SDV Insider Staff