How Much Does Cost to Build Automotive Software?

In the last decade, we’ve experienced the arrival of digitization in the automotive industry, and it’s witnessing a substantial rise. Now, tech-enabled GPS services, remote control of in-car functions, driverless cars, route optimization, connected vehicle enablement, and the best user experience are game-changing scenes brought to the table by automotive software.

The global automotive software market is on a rapid growth trajectory, projected to reach a size of $32.3 billion by 2030 at a CAGR of 7.8%. This surge in demand for automotive software, driven by the industry’s increasing reliance on technology and the desire to lead in innovation, is prompting automotive companies to seek software developers. The first step in this journey is estimating the cost of automotive software development.

This blog will discuss the factors that impact the cost of developing automotive software in detail, followed by a breakdown of software development costs. Let’s get into the details of the price.

Ten Factors Influencing Automotive Software Development Cost

Automotive software development comes with excellent features, and adding special features increases its cost proportionately. Here are all the factors that influence the cost of automotive software development.

Type of Automotive Software

The type impacts the cost of software development as every solution is unique in terms of industry, target audience, features, design, and tech stack. Under the automotive software development umbrella, the business may opt for navigation software, vehicle maintenance software, route optimization software, and others. The selection of type of automotive software significantly impacts the cost to build automotive software from $40,000 to $200,000.

Planning and Analysis

After determining the type of automotive software, companies embark on a comprehensive planning and analysis phase. This involves market research, feasibility studies, and gathering project requirements to create detailed software documentation. The meticulousness of this process, including the selection of tools and technologies, ensures that the automotive software development cost is well-considered which may range from $5,000 to $25,000.

Software Design

Automotive software development requires a minimal design with an optimal number of graphics that attract users and deliver unique experiences; the development is affected proportionately. Software design includes designing system architecture that determines structure and data flow, UI/UX design, and building prototypes to validate design concepts that go up to $30,000 together.

Overall Development

Building software for the automotive industry takes around 800 to 1000 operational hours with embedded technologies and features. An automobile app’s overall development cost, from development to testing, is estimated to be between $40,000 and $100,000. Adding pre-built software or readymade APIs makes it easier to implement functionality in the application solution without building from scratch, which saves a lot of development time and cost.

Hardware and Tools Required

Development of Automotive software is not only a game of programming languages or software modules integration, but it’s essential to set up infrastructure by purchasing the required hardware (ECUs, sensors, servers, and others). Besides, buying software tool licenses cannot be overlooked because it involves IDEs, compilers, and debuggers that might cost between $10,000 and $20,000.

Compliance and Certification

In the automotive industry, adherence to stringent regulations and obtaining mandatory certifications is not just a requirement, but a commitment to quality and safety. This includes compliance with regulatory standards such as SAE, ISO, etc., and obtaining certification for regulatory approvals, which can cost businesses between $20,000 to $100,000. This investment ensures that the automotive software meets the highest industry standards.

Deployment and Documentation

Automotive businesses expect automotive software companies to deploy the software in the cloud or at the local server seamlessly with reduced downtime while ensuring that it runs in the environment successfully. Additionally, software distribution across different platforms, dealerships, or CDNs increases the cost of building automotive software by up to $40,000.

Expenses After Development

The backend infrastructure is the backbone of the software that must be robust enough. The automotive software infrastructure includes maintenance, monitoring, database, networking, and data sharing via sensors. Furthermore, providing customer support, handling inquiries, technical assistance, and post-launch enhancements and bug-fixing charges of $15,000 to $100,000 annually.

Embracing Latest Trends

The fierce competition has urged the need for AR/VR-powered user experience, IoT-driven connected cars, and AI chatbot or in-vehicle system usage in the app’s frontend and backend development. Such technologies require developers with special skills or experience that ultimately impact the costs of developing automotive software by a large fraction.

Hiring In-House or Outsourcing

Both approaches to hire software developers for automotive software development have pros and cons that bring differences in costs. In-house development ensures high control over software development and clear communication, but recruitment and infrastructure with employee benefits increase cost estimation. Conversely, outsourcing enables access to a wide range of talent, faster time-to-market, and reduced software development costs.

The Breakdown of Automotive Software Development Cost

The factors impacting the automotive software development cost determine different ways to calculate development cost. However, the detailed cost breakdown lets you know the estimated cost of every team member involved, tools used, and others.

How much does the development team charge?

The development team of an automotive software development company involves developers, UI/UX designers, QA engineers, project managers, DevOps specialists, and cybersecurity experts. Combining the different hourly rates of the team members will help to calculate the amount of hiring a development team. For example, the approximate hourly rate of software developers is $20 to $40, UI/UX designers’ between $20 to $30, QA engineers cost $10 to $35 per hour, and project manager shells out from $15 to $25, and DevOps experts costs $25 to $35 per hour.

How much do you need to spend on development tools?

Software development involves several tools that make building automotive software smooth and effortless. Leveraging the premium tools and their license impacts the development cost. For example, IDE tools used for writing and designing require a license that costs $0.50 to $1 per hour, version control system tools for code management costs up to $0.30 per user, PM tools for task management costs $0.25 per hour for every user, license of automated testing tools costs up to $2 per hour, and SDKs/software libraries for automotive software ranges between $0.5 to $5 hour.

What should be your investment in hardware?

Automotive software development is followed by its seamless deployment, which requires setting up the necessary infrastructure, including development workstation, server, test vehicle, and embedded system hardware. Using all types of hardware requires payment on an hourly basis. For example, using high-performance computers costs $1 to $2 per hour, a server for hosting costs up to $5 per hour; vehicles charge $10 per hour for software integration testing, and embedded systems cost $0.5 to $2 per hour.

What’s the amount of compliance-related things that take away?

Automotive software development requires compliance with regulations and some certifications that come at a cost. For instance, some certifications like ISO 26262 are essential to obtain a cost between $9 and $25 per hour, compliance testing by an external party charges $30 per hour, and legal compliances and contracts cost $27 per hour.

How Much Does Automotive Software Development Cost?

Building automotive software from scratch pushes businesses to hire the best developers. Before partnering with any development company, selecting one of the automotive software types and advanced functionalities additions that significantly impact the development cost is essential.

Typically, automotive software development costs between $50,000 and $300,000. This cost depends on diverse factors like software project complexity, UI/UX design, core functionalities, embracing the latest trends, software development platform, developer’s hourly rates and geographical locations, hardware purchase, deployment, etc.

The detailed explanation lets you identify accurate cost estimates for automotive software development. However, the exact answer to “How much does automotive software development cost?” is best provided by a software development company based on your automotive software needs. Take expert advice from reliable automotive software developers for the strategic initiative and get an accurate software development cost estimation.