Why EV Leaders Are Winning the Software Race (And How to Catch Up) 

Introduction

The electric vehicle industry is changing faster than most people expected. While battery range, charging speed, and vehicle design still matter, they are no longer the only factors that define success. 

According to Future Market Insights *, the global software-defined vehicle market is projected to grow from about $61.7 billion in 2025 to more than $584 billion by 2035, at a CAGR of roughly 25.2%, underscoring that software is becoming central to automotive value creation and competitive advantage.  

This shift signals a fundamental change for automotive leaders. Electric vehicles are no longer just machines powered by electricity. They are connected, intelligent systems that evolve through software updates, data platforms, and digital services. 

For leaders across automotive and mobility organizations, this shift creates competitive pressure to accelerate digital capabilities. Some EV players are pulling ahead not because they build better hardware, but because they operate with a software-led mindset that enables faster innovation, scalable platforms, and new revenue models. This is precisely why these EV leaders are pulling ahead in the race. 

This blog explores what is driving that advantage, what is holding others back, and how automotive leaders can begin to close the gap. 

Trends Reshaping EV Mobility 

The electric vehicle landscape is evolving quickly, driven by a strong shift toward digital and software-led innovation. What once differentiated EVs on hardware and range is now being reshaped by how intelligently vehicles are designed, updated, and experienced over time. Several key trends are defining this transformation. 

• Software-defined vehicles becoming the standard 
  Modern EVs are built on software-first architectures, where core functions such as performance, safety, infotainment, and battery management are controlled and enhanced through over-the-air updates. 

• Subscription-based revenue models gaining traction 
  EV leaders are introducing paid subscription-based digital features and connected services that extend revenue beyond the initial vehicle sale and enable ongoing customer engagement. 

• Customer expectations shifting toward digital experiences 
  Buyers now expect intuitive interfaces, personalization, fast updates, and seamless connectivity, similar to the digital products they use every day. 

• Data emerging as a strategic asset 
  Behavioral and battery data are unlocking new opportunities, enhancing vehicle reliability, enabling personalized experiences, and powering innovative mobility services. Harnessing this data turns information into a core business advantage. 

Together, these trends explain why software has moved to the center of EV strategy and why digital maturity is becoming a key competitive advantage. 

Industry Barriers Slowing Momentum 

While interest in EV digital transformation is high, execution remains challenging for many automotive organizations. Structural, economic, and operational constraints often slow progress and make large-scale change difficult to sustain. 

• Charging infrastructure and grid dependency challenges 
  Inconsistent charging availability and energy constraints make it harder to deliver reliable connected and software-driven vehicle experiences. 

• High upfront investment requirements 
  EV platforms demand significant spending on batteries, cloud systems, cybersecurity, and digital talent, which can strain traditional automotive business models. 

• Fragmented and disconnected systems 
  Many organizations continue to operate across siloed platforms for manufacturing, sales, service, and customer engagement, limiting visibility and consistency. 

• Lifecycle, sustainability, and workforce readiness risks 

EV software must support long vehicle lifecycles and evolving regulations, while talent shortages in software and digital roles slow transformation efforts. 

These barriers help explain why progress can feel complex, but they also point clearly to where focused, strategic action is needed. 

What CXOs Must Prioritize Now 

Having seen why EV leaders are winning the software race, and how connectivity, data, and digital platforms give them a clear edge, automotive organizations looking to catch up must focus on the right priorities. 

Connectivity is no longer optional; it’s a revenue and loyalty driver. Extentia’s Experience Design Trends (EDT) Report for Automotive 2025 shows that 71% of Indian consumers are willing to pay extra for connected vehicle features. 

From unified digital–physical journeys to at-home vehicle experiences like remote diagnostics and OTA updates, customers now expect seamless, intelligent engagement across the entire vehicle lifecycle. 

To stay competitive, CXOs must: 

• Build cloud-native platforms for scalability and real-time insights 

• Foster a software-first, agile culture 

• Invest in UX-led in-vehicle and mobile experiences 

• Use data and AI to power personalization and predictive services 

• Partner strategically to accelerate connected mobility innovation 

Explore other key automotive experience trends, download the Experience Design Trends Report for Automotive 2025.  

The EV Race Will Be Won Through Digital Excellence 

The future of electric mobility will not be defined by hardware alone. It will be shaped by how effectively automotive organizations build software-defined vehicle architectures, unify customer data, and deliver connected experiences across the entire ownership lifecycle. 

EV leaders are investing early in cloud-native, software-driven platforms that enable continuous updates, real-time intelligence, and vehicles that improve over time. Equally critical is owning the customer journey end to end, from discovery and purchase to in-vehicle experiences, servicing, and post-sales engagement, by breaking down silos and centralizing fragmented data through integrated CRM and customer platforms. 

For organizations still catching up, the path forward is clear. Digital excellence in the EV era requires rethinking legacy operating models, prioritizing data as a core asset, and aligning technology, experience, and business teams around a single connected vision. 

In the EV race, winners will be those who move beyond electrification to build intelligent, connected, and customer-centric automotive ecosystems. 

This is exactly the approach Extentia believes in and has consistently practiced. We help automotive organizations build intelligent, connected, and experience-led digital ecosystems that evolve with changing customer and market needs. Connect with us to start the conversation to discover how our automotive technology solutions enable software-defined vehicles, connected services, to shape your transformation today. 

Sources 

1. Software Defined Vehicle Market Size and Share Forecast Outlook 2025 to 2035