Inside Europe’s €68M Plan for the Next Digital Car

A €68.4M EU initiative brings 70+ partners together to build shared software foundations for the next generation of connected vehicles

11 Jul 2025

Europe’s automotive sector is increasing its focus on software as competition in the industry shifts from mechanical engineering to digital systems. A Horizon Europe initiative worth about €68.4mn aims to accelerate the development of software-defined vehicles and strengthen the region’s position in next-generation mobility.

The project, known as Shift2SDV, is supported through Horizon Europe with funding from the European Union, the Chips Joint Undertaking and participating national authorities. More than 70 organisations are involved across the region, including automotive and semiconductor groups such as Bosch, NXP and TTTech, which participate in defined consortium roles.

The initiative addresses a growing challenge for carmakers: vehicle software has become increasingly complex and fragmented. Many manufacturers still develop digital systems separately for each model, creating duplicated work and slowing the rollout of new features.

Shift2SDV aims to develop a modular middleware framework that can be reused across multiple vehicle platforms. Such a system could allow manufacturers to deploy digital services more quickly, update vehicles remotely and improve cybersecurity protections.

The effort also reflects broader European policy goals. EU programmes such as the “Vehicle of the Future” agenda place digitalisation, safety and sustainability at the centre of mobility policy. By linking automotive software development with semiconductor initiatives through the Chips Joint Undertaking, the project also responds to supply chain weaknesses highlighted during recent global chip shortages.

Industry groups increasingly see common software frameworks as critical infrastructure for the next generation of vehicles. Modern cars are evolving into connected platforms capable of receiving over-the-air updates, meaning software now shapes driver experience, safety features and brand differentiation.

However, coordinating such a large consortium poses challenges. Partners must balance collaboration with competition while meeting strict European requirements for cybersecurity and functional safety. Translating research outcomes into production-ready technology will also require continued alignment between industry and regulators.

Even so, policymakers and companies view initiatives such as Shift2SDV as a step towards building a shared digital foundation for Europe’s future automotive sector. The programme is expected to support broader efforts to scale secure and standardised vehicle software across the region’s car industry.