If 2024 was a warm-up lap, 2025 was the moment the automotive industry went full throttle. Electrification matured, SDV programs shifted from prototypes to production intent, and OEMs began to fundamentally rethink how they build, integrate, and scale technology across entire vehicle platforms.
From our vantage point at Endego – working daily with OEMs, Tier 1 suppliers, and advanced engineering organisations across Europe – we’ve seen first-hand that the real story of 2025 wasn’t new technology. It was the operational pressure to deliver it faster, cleaner, and with fewer resources, forcing a complete rethink of collaboration models, competencies, and the role of engineering partners.
This article breaks down what truly changed in 2025 and what these shifts mean for the engineering services landscape as we move into 2026 – specifically in the automotive domain, where SDV and nearshoring have moved beyond strategy slides and into critical-quarter planning.
In 2025, the automotive industry stopped talking about “transformation” and began executing it. From the perspective of Engineering Service Providers (ESPs) like Endego, this was the moment when three megatrends moved from slides in strategy decks into very real project backlogs: electrification, software-defined vehicles, and the nearshoring of engineering capabilities.
Industry analysts estimate that the global automotive engineering services market surpassed around USD 215 billion in 2025 and is on track to almost double by 2033, with a CAGR close to 9%. At the same time, the automotive engineering services outsourcing (ESO) segment grew from roughly USD 85–95 billion in 2024 and is projected to expand at a double-digit CAGR through 2032.
This sends a clear signal: OEMs and Tier 1 suppliers are increasingly building competitive advantage not only by growing their internal R&D, but by partnering with strategic engineering providers.
“In 2025, it became obvious that you can’t win the race for the car of the future relying solely on in-house resources. The leaders now choose not the cheapest suppliers, but partners who can help them deliver complex programs fast, under tough cost constraints.”
– Krzysztof Walczak, CEO, Endego
According to recent global analyses, the two main imperatives in automotive in 2025 are the electrification of mobility and the transition to Software-Defined Vehicle (SDV) architectures.
Electrification: Less hype, more hard optimisation
The Global EV Outlook 2025 report by the International Energy Agency shows that electric vehicle sales continue to grow strongly worldwide. Still, with significant regional differences – some markets are slowing, while others are just taking off. The focus is shifting from early-stage hype to reducing total cost of ownership (TCO), optimising battery systems, and improving overall energy and thermal efficiency.
For ESPs, this means a shift from purely “greenfield” EV projects towards:
The software-defined vehicle market is one of the fastest-growing segments in automotive. Recent forecasts suggest an increase from about USD 61.7 billion in 2025 to around USD 584 billion by 2035, with a CAGR exceeding 25%.
At the same time, many traditional carmakers have run into the limits of their existing structures and methods. Industry commentary highlights that even major OEMs are struggling with delays, bugs, and rising costs in their software platforms and centralised E/E architectures as they attempt to “go SDV”.
“In 2025, the gap between a ‘car with lots of electronics’ and a true SDV became painfully visible. Those who treated software as an add-on hit a wall – organisationally, in terms of skills and financially.”
– Krzysztof Walczak, CEO, Endego
This capability gap directly fuels demand for specialised engineering services in E/E and software – from architecture design and ECU integration, through HIL/SIL testing, all the way to functional safety validation.
Strategic reports on the European automotive sector underline that the shift from distributed ECU architectures to domain- and zonal-structured architectures has moved from “nice to have” to mandatory for SDV programmes.
In practice, this means:
For ESPs like Endego, this is a space where the value added is very concrete: we can connect traditional mechanical and electrical competencies (for example, wiring harness design, packaging of components) with SDV requirements already at system architecture level – far beyond “just doing 3D models”.
The move towards SDV doesn’t just unlock new capabilities – it also creates unprecedented exposure to cyberattacks. Analyses of the automotive security landscape show rising numbers of remote attacks with high or critical impact, in parallel with the rollout of regulations such as UNECE WP.29 and standards such as ISO/SAE 21434, which make cybersecurity a formal design requirement.
At the same time, despite significant investment, OTA (over-the-air) capabilities at many traditional OEMs still lag behind digital-native players such as Tesla and selected Chinese brands. Among many established manufacturers, OTA remains limited mainly to infotainment. At the same time, the leaders use full firmware OTA (FOTA) to improve performance, comfort, and safety – and to enable new subscription-based services and revenue streams.
From an engineering services viewpoint, this produces two main types of projects:
At Endego, we see growing demand for complete functional chains, where safety (both functional and cyber) is integrated into the engineering scope, often delivered in collaboration with specialised security partners.
The IEA’s Global EV Outlook 2025 indicates that electrification is entering a more mature phase: market growth remains strong, but pressure on affordability, battery cost optimisation, and efficient energy management is increasing.
This translates into very concrete needs for ESPs:
“More and more often, OEMs are not just asking ‘does it work?’, but ‘is it scalable across five markets, three powertrains, and at our target material cost?’. This is the moment where engineering and business have to speak the same language.”
– Krzysztof Walczak, CEO, Endego
In 2025, Europe continued to pivot strongly towards nearshoring, and Central and Eastern Europe – including Poland – reinforced its position as one of the key engineering and IT hubs in the region. Recent market analyses rank Poland among the top European destinations for outsourcing software development and engineering services, with the ICT market valued at over USD 31 billion in 2025 and a strong growth outlook through 2030.
For global OEMs and Tier 1 suppliers, this offers the opportunity to:
For Endego, this is a strong argument to position Poland as a natural nearshore partner for European and global automotive programmes – both in mechanical engineering and in E/E and systems integration.
Taken together, these trends point to a fundamental shift in the role of Engineering Service Providers – from pure “capacity providers” to partners who share responsibility for the success of the programme.
We see three clear directions:
“For us, the definition of partnership isn’t an SLA – it’s the fact that the client invites us to the table when the new platform is still just a concept. That’s exactly where the real savings in time and cost are created.”
– Krzysztof Walczak, CEO, Endego
Based on market data and the programmes we are running with our clients, we see five concrete theses for 2026 in automotive, from an engineering services perspective:
SDV programmes will grow in size and become even more business-critical. OEMs will prefer a smaller number of partners capable of taking responsibility for substantial parts of the architecture, from hardware to backend integration. ESPs that remain focused only on simple “body leasing” will move to the margins of the market.
In domains such as E/E, functional safety, or systems integration, nearshoring to CEE will increasingly be preferred over distant offshore locations due to reaction times, regulatory alignment, and the need for tight collaboration with European headquarters. Poland, with its mature ICT market and strong engineering talent pool, is well-positioned to further strengthen its role as a preferred nearshore location.
By 2026, there will be virtually no new E/E platform programmes where cybersecurity is not addressed from the concept phase onwards. For ESPs, this means:
Under pressure from benchmarks and customer expectations, OEMs will sharpen their requirements for the whole software lifecycle in the vehicle:
This will push ESPs to further upgrade their backend capabilities, including vehicle integration and OTA testing.
With the growing importance of subscriptions, digital services, and data-driven business models, engineering partners will increasingly become co-designers not only of technical solutions, but also of business assumptions:
As an Engineering Service Provider from Poland, specialising in mobility (automotive, railway, buses), Endego is naturally aligned with the nearshoring trend:
“Our ambition is not to be the largest supplier in the market, but to be the partner an OEM chooses for the projects that are truly strategic – where failure is extremely costly, and success can change the product roadmap.”
– Krzysztof Walczak, CEO, Endego
Sources:
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