(This article was originally published on Forbes.com)
As the automotive industry races toward a software-driven future, passenger vehicles often dominate the spotlight, with innovations transforming everything from in-cabin experiences to vehicle dynamics. However, the commercial vehicle sector—encompassing everything from delivery vans to passenger shuttles—remains a less talked-about frontier for software integration.
This is a missed opportunity.
Commercial vehicles not only stand to gain from the advancements seen in passenger cars but also present unique challenges and opportunities that software can uniquely address. From fleet management complexities to the diverse demands of specialized vehicles, the commercial mobility landscape is ripe for a software revolution that can drive efficiency, safety, and new value creation.
The challenges for commercial vehicles
The demand for commercial vehicles is expanding rapidly, and the categories are diversifying. Consider the light commercial vehicle (LCV) market, which is growing at a 9.8% CAGR from $161B in 2024 to a projected $341B in 2032, according to Statista. It’s a diverse category spanning special-purpose delivery vehicles, construction, manufacturing, logistics, and commercial passenger transport.
This diversity can present a challenge, as the range of different vehicles have different requirements, subsystems, and infrastructure needs. Manufacturers may struggle to find sufficient reuse across these different applications, which increases design and manufacturing costs. Each vehicle type—passenger shuttles, goods delivery vehicles, cold chain food transport vans, recreational vehicles—has distinct requirements. Each of those vehicles could be based on a common platform, but the specific in-cabin features, safety features, subsystems, and vehicle dynamics are very different.
Another challenge comes from the needs of fleet management. Many industries use telematics solutions, but rapidly changing requirements for LCVs means that existing solutions can be limited in their ability to respond to new vehicle needs. As vehicle systems evolve, ensuring uptime by proactively maintaining vehicles is important for low cost of fleet operations. And in a world where delivery driver turnover is increasing, driver monitoring for safety can aid driver training and reduce insurance costs .
Aftermarket solutions are one approach to improving these requirements, but they conflict with the desire of commercial vehicle OEMs to offer an integrated solution. Ford has projected that its commercial fleet management solution, Ford Pro, will significantly boost margins, becoming a key revenue stream for the company. How can the industry enable value-creating solutions for commercial vehicles while empowering a range of options spanning from OEM-integrated solutions to flexible aftermarket options?
The opportunity for software in commercial vehicles
The automotive industry’s focus on software-defined vehicles offers important foundations that can address many of these commercial vehicle challenges. I think there are three critical areas that commercial vehicle manufacturers can immediately utilize to improve the flexibility and reusability of their platforms. These changes also empower a range of options from OEM built-in capabilities to extensible after-market approaches:
Modern networking technologies
Increasingly, passenger vehicles are adopting modern networking approaches like automotive Ethernet and Time Sensitive Networking, a technology that ensures data is transmitted reliably and on time, which is crucial for coordinating complex vehicle functions and safety-critical systems. These approaches are helping to drive down costs, as these wiring harnesses are lighter, more flexible and higher performance, compared to dedicated wires over legacy CAN, LIN, or FlexRay.
Modular applications and services
Cloud-based computing has brought incredible innovation in the ability to deliver modular services in a flexible way. Cloud-native design enables development and prototyping of applications in the cloud and deployment into vehicles, and also deployed into different subsystems of vehicles. Modular applications and services—software components that can be developed, updated, and replaced independently—offer flexibility and cost savings by allowing vehicle features to be tailored without overhauling entire systems.
Dynamic data management and collection
Most telematics and fleet management systems today are fixed and enable specific kinds of data processing that were designed in at manufacture. Dynamic data management and collection systems that can adjust in real-time to different data needs allow fleets to capture the right information as requirements evolve, such as tracking temperature in cold-storage vehicles or monitoring driver behavior. This also responds to the need to have a single platform serve a range of needs: for example, a passenger vehicle may need only simple temperature control, but a cold-storage food delivery vehicle may need high precision controls with data capture to ensure food was transported safely. A single fixed approach can’t solve the wide range of needs, so a scalable, dynamic system can be more powerful and promote better reuse
Conclusion
Commercial vehicles stand to gain significant capabilities from the rapid development of vehicle software. The diverse needs across commercial fleets lend themselves perfectly to the scalable systems the vehicle industry is currently considering. OEMs and fleet owners alike stand to benefit from this opportunity, and this area is poised for rapid expansion in the coming years.
To fully realize these benefits, industry leaders should prioritize collaboration between OEMs, technology providers and fleet managers. These stakeholders face unique but interconnected challenges.
- OEMs must create flexible platforms that accommodate various vehicle types while balancing built-in and aftermarket solutions without increasing costs.
- Technology providers need to develop adaptable systems that integrate with OEM platforms and meet evolving fleet needs, such as real-time data management and modular applications.
- Fleet managers are tasked with maximizing vehicle uptime, improving driver safety, and controlling costs, all while seamlessly adopting new technologies.
To tackle these challenges, deeper partnerships are crucial. OEMs should prioritize flexible, software-driven platforms. Technology providers must ensure their solutions are modular and integrate well with both OEM systems and fleet operations. Fleet managers need to collaborate with both to ensure these innovations address real-world problems and enhance long-term performance.
By working together to embrace software-defined vehicle technologies, these stakeholders can unlock new value streams, reduce operational costs and improve fleet efficiency. They can also create adaptable and innovative solutions that meet the evolving demands of commercial mobility. Download this white paper, “The Future of Commercial Vehicles is Software-Defined“, to learn more.