Under the Hood 2026: Why SDV Innovation Starts Below the Application Layer

Automakers are increasingly looking to software to deliver the features and experiences that distinguish their vehicles. But developers still spend an average of 35% of their time on foundational integration tasks, including connecting operating systems and middleware, and aligning and configuring systems.

That is one of the central findings from QNX’s second annual Under the Hood: Software-Defined Vehicle Developer Report 2026. Based on a survey of 1,100 automotive software developers across eight countries, the report reveals a persistent tension in software-defined vehicle development. The industry wants to concentrate on application-layer innovation, while the complexity beneath continues to consume significant engineering resources.

Turning SDV ambition into execution therefore requires more than accelerating feature development. It means reducing the recurring integration, validation, and compliance work that prevents development teams from focusing on the software customers experience directly.

The Innovation Gap: Where OEMs Want to Focus Versus Where Work Happens

Developers are clear about where OEMs should direct their resources. More than three-quarters of respondents (76%) believe OEMs should focus on application-layer innovation rather than foundational software infrastructure to improve time-to-market and differentiate customer experiences.

Current development priorities tell a different story. Only 9% say their teams are mostly focused on application-layer features and user-facing functionality. By contrast, 28% say their efforts are mostly focused on foundational software, while 63% describe an approximately even balance between the two.

This gap matters because the application layer is where software becomes part of the customer experience and an expression of the vehicle brand. When developers repeatedly rebuild, integrate, and validate the underlying components, less engineering capacity reaches the features that customers see and use.

The answer is to make that foundation more reusable, integrated, and dependable so that it supports differentiation rather than competing with it for resources.

Increasing Complexity is Reshaping the Delivery Challenge

The pressure to accelerate is widespread. Almost eight in ten developers (79%) say their organizations face pressure from faster-moving competitors to speed up software development.

At the same time, the obstacles are becoming more closely associated with making complex systems work together reliably. Debugging and testing were the most frequently cited development challenge, selected by 44% of respondents, up from 36% in 2025. Integration complexity also increased, from 36% to 39%, while long development cycles remained a challenge for 37%.

Confidence in development environments has also softened. Although 81% still rate their environment as good or excellent for productivity, that figure has fallen from 86% a year ago. The proportion giving their environment an “excellent” rating fell from approximately 30% to 20%.

Together, these findings show that the challenge is not simply writing software faster. OEMs must also reduce the effort required to integrate, test, and validate increasingly complex software systems.

Security and Compliance Must be Built into the Architecture

Security threats are now the most frequently cited concern about the future of automotive software development. Almost half of respondents selected them as one of their three biggest concerns.

Developers also expect that risk to intensify. Eighty-three percent believe SDVs are likely to become a major target for cyberattacks within the next three years. Cybersecurity vulnerabilities were also the most frequently identified threat to the successful rollout of SDVs over the next five to ten years.

Compliance adds another layer of complexity. Cybersecurity remains the type of regulation most frequently identified as difficult to navigate, cited by 46% of respondents. Software-update and over-the-air compliance was selected by 41%, while data privacy increased from 36% in 2025 to 40% in 2026.

Security, safety, and compliance cannot be treated as activities added near the end of development. They are architectural requirements that influence platform design, integration choices and development processes from the outset.

AI Expectations are Becoming More Practical

Developers’ expectations for AI are also evolving. The proportion who expect AI to play a transformational role in automotive software development over the next three to five years has fallen from 36% to 25%. Meanwhile, the proportion expecting it to play a significant role integrated into development workflows has increased from 55% to 62%.

This represents a shift in emphasis rather than a rejection of AI. When asked where AI will have the greatest impact over the next three years, respondents most frequently selected coding and software implementation, followed by software design and architecture.

The findings point towards a more grounded view of AI as a tool for specific development activities. It may help teams write, design, and validate software more efficiently, but it does not remove the need for a coherent underlying architecture.

Build on More. Rebuild Less.

The research also indicates what would help developers devote more time to application-layer innovation. Respondents most frequently selected better integration across development tools and environments. Greater software reuse across vehicle programs followed, with a pre-integrated foundational software platform selected by more than a third.

Yet extensive reuse remains limited. Only 22% say their organizations extensively reuse the same foundational software platform across vehicle programs or ECU domains. A further 68% report some reuse, with platforms shared across certain programs but customized for others.

Three-quarters of respondents agree that the lack of a common, reusable software foundation slows SDV development. Almost all believe platform engineering will be important over the next five years.

The opportunity for OEMs is therefore not simply to build more software. It is to reduce the amount of foundational work that must be repeated for every vehicle program, platform, or domain. A common, pre-integrated foundation can turn foundational software from a recurring engineering burden into a reusable organizational asset.

Turning SDV Ambition into Execution

This year’s findings bring the SDV conversation back to the realities of execution: integration, debugging, validation, security, compliance, and reuse.

These activities will always be essential. The strategic question is how often development teams should have to solve the same foundational problems before they can begin delivering differentiated experiences.

For OEMs, the path to greater application-layer innovation starts below the application layer. By establishing a secure, dependable, and reusable software foundation, they can direct more engineering capacity towards the features that distinguish their vehicles and create value for customers.

Download the Under the Hood: Software-Defined Vehicle Developer Report 2026 to explore the complete global and country-level findings.