The commercial vehicle industry is experiencing a profound transformation driven by technological advancements. As traditional driving experiences evolve into dynamic, software-enhanced interactions, businesses must adapt to these changes to stay competitive. Gregory Skinner, VP of Strategic Insights at Escalant, highlighted these shifts at the Spring 2025 CVB Summit, emphasizing the role of software-defined vehicles in shaping the future of transportation. This article explores the implications of these advancements and the opportunities they present for dealers and industry stakeholders.

The Rise of Software-Defined Vehicles

Software-defined vehicles represent a shift from traditional mechanical-centric automobiles to technology-driven platforms that prioritize user experience. Unlike conventional vehicles, these models integrate advanced software solutions, enabling real-time diagnostics, predictive maintenance, and seamless connectivity.

“A car from ten or twenty years ago was strictly a mechanical beast,” says Skinner. “Going into the future, they will be software-driven. They will be more about the ‘user’ experience rather than the ‘driver’ experience. Embedded systems, sensors, safety controls, telemetry systems allowing data collection, over-the-air updates, and vehicle-to-vehicle communications, will all be commonplace in controlling the user’s environment and experience.”

Although moving beyond the simple function of transportation may offer a more holistic experience, business owners and fleet managers are not necessarily enamoured with the prospect of increasing technology in their commercial vehicles.

“That love affair with what a retail vehicle can be does not exist with commercial vehicles,” explains Skinner. “Commercial is where vehicles are getting jobs done, and fleet managers are not happy if a work truck is out of commission for two weeks because it takes a technician that long to sift through the sheer amount of built-in technology.”

Skinner also points out that, despite the shift toward increasing technology, there are still plenty of opportunities for hardware-defined vehicles, especially in the commercial sector.

Opportunities for Dealers and Business Owners in Upfitting and Modular Design

Traditionally, dealers have focused on selling trucks with fixed configurations, but the rise of modular and flexible designs is unlocking new avenues for engagement.

One of the biggest opportunities lies in the upfitting market, which is evolving with increasingly sophisticated solutions. Upfits now offer higher-quality builds, improved usability, and enhanced customization options, enabling dealers to focus on becoming long-term partners in vehicle adaptability. As businesses evolve, their vehicle needs change, and dealers who embrace modular designs can provide ongoing customization and optimization services.

“This shift is also redefining how vehicles are used over their lifespan,” explains Skinner. “Historically, commercial truck owners purchased a vehicle with a specific purpose in mind, keeping it for years with little change. However, with modular adaptability, work trucks can now evolve alongside business demands, allowing for changes in shelving, racking, storage compartments, and even cab configurations to suit different applications.”

Additionally, industry partnerships are fueling innovation. Fleet operators value standardized and integrated systems, ensuring compatibility between different hardware and software components. This demand is driving companies to develop interchangeable solutions that support a wide range of tools and equipment, making modularity more practical for everyday fleet operations. Dealers who position themselves as connectors within this standardization movement will find opportunities to expand their role beyond sales and service into a more strategic partnership.

By embracing modularity, flexibility, and collaboration, dealers can future-proof their business models, ensuring they play a vital role in the evolution of commercial vehicles. Instead of simply providing vehicles, they become key facilitators in helping businesses tailor their fleets to real-time operational needs, strengthening customer loyalty, and fostering long-term industry relationships.

Collaboration as a Catalyst for Industry Transformation

“The shift toward software-defined and modular commercial vehicles is not just about individual innovations,” opined Skinner. “It’s about industry-wide collaboration. Manufacturers, dealers, and fleet operators must work together to create an integrated and sustainable future.”

By forming strategic partnerships, businesses can streamline technology adoption, improve vehicle efficiency, and enhance the overall transportation ecosystem. Open communication and shared advancements pave the way for a more cohesive industry, where solutions are tailored to real-world challenges rather than isolated developments.

Conclusion

The future of commercial vehicles is being shaped by technology, modularity, and industry collaboration. Software-defined vehicles enhance user experience, providing real-time adaptability that drives efficiency. The commercial vehicle sector is shifting toward modular innovations that empower commercial vehicle dealers to engage in the upfitting market and offer specialized solutions.

To thrive in this evolving landscape, industry stakeholders can embrace these changes, leveraging technological advancements to create a more connected and sustainable future. Business owners can integrate AI and telematics for smarter fleet management, carriers can leverage AI for logistics optimization, and third parties can consider investing in alt-fuel technology as government interest wanes.

As businesses adapt, the opportunities for growth, collaboration, and innovation will continue to expand, solidifying the role of software-defined vehicles in the commercial sector.

This article is excerpted from the Spring 2025 CVBS session, “Success Strategies – Forging Ahead in Uncertain Times.” Click here to view the full session on YouTube, or watch the viewer below.