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Tier 0.5 Suppliers in the Automotive Value Chain, Global, 2024–2030

Publisher Frost & Sullivan
Published Sep 25, 2025
SKU # MC20451238

Description

The automotive industry is experiencing a significant transformation, transitioning from conventional to software-defined vehicles. As vehicles develop into intelligent, connected platforms driven by electrification, autonomous driving technologies, and digital services, traditional original equipment manufacturers (OEMs) are confronted with increasing complexity in design, integration, and delivery, leading to substantial financial expenditures. In this scenario, Tier 0.5 suppliers are emerging as crucial enablers, effectively bridging the gap between Tier I component suppliers and OEMs by providing comprehensive and integrated vehicle platforms that combine hardware, embedded software, and system-level intelligence based on driving behavior.

Unlike traditional Tier I suppliers, Tier 0.5 suppliers deliver modular vehicle architectures that facilitate expedited time-to-market, scalability, personalized customization, and continuous upgradeability, thereby establishing themselves as essential partners for the development of electric vehicles and software-defined vehicles in this new era of mobility. These platforms frequently encompass vital subsystems such as by-wire systems, battery integration, centralized computing, and connectivity, rendering them foundational for the implementation of advanced driver assistance systems and autonomous driving capabilities.

As OEMs transition to lifecycle-based revenue models that capitalize on over-the-air updates, feature-on-demand services, and platform business strategies, Tier 0.5 suppliers provide the architectural flexibility and rapid time-to-market needed to stay competitive in this changing space. By enabling OEMs to concentrate on brand development, user experience, and digital ecosystems while managing the intricacies of integrated vehicle development, Tier 0.5 suppliers are becoming increasingly vital strategic partners in redefining the future of mobility.

This report offers insights into the changing role of Tier 0.5 suppliers in the automotive value chain. The base year is 2024, and the study period is from 2024 to 2030.

Table of Contents

    • Scope of Analysis
    • Segmentation
    • Why Is It Increasingly Difficult to Grow?
    • The Strategic Imperative 8TM
    • The Impact of the Top 3 Strategic Imperatives on Tier 0.5 Suppliers in the Automotive Value Chain
    • How OEMs and Suppliers Power the Industry Together
    • Traditional Automotive Value Chain
    • Design to Delivery: Vehicle Production Process and Role of Key Stakeholders
    • Responsibilities of OEMs and Tier Suppliers
    • Key Roles and Responsibilities of Automotive OEMs and Suppliers
    • Roadblocks in Auto Production: Key Challenges that OEMs and Tier Suppliers Face with Traditional Manufacturing Methods
    • Changes in Value Chain
    • The Next Phase of the Automotive Value Chain
    • Competitive Environment
    • Key Competitors
    • Growth Drivers
    • Growth Restraints
    • Emergence of New Players in the Automotive Ecosystem
    • Tier 0.5 Suppliers: Integrating Systems and Reducing OEM Load
    • Motivating Factors for New Entrants in the Value Chain
    • Rise of Tier 0.5 Suppliers: Redefining the Automotive Value Chain
    • Challenges for New Entrants in the Value Chain
    • Roadmap to Tier 0.5
    • Accelerating Innovation: Tier 0.5 Integration Simplifies OEM Production
    • Use Case: BMW & Magna Steyr Partnership for Vehicle Production
    • Magna International: Customer Base
    • Magna International: Groups & Areas of Expertise
    • Magna International: Global Footprint
    • Magna International: Areas in Which it is Developing Various Technologies
    • Trends Redefining the Automotive Value Chain
    • Introduction of New Players in the EV Space
    • Major Trends Leading to SDVs
    • Emergence of Tier 0.5 Suppliers
    • Role of Tier I Suppliers
    • Opportunities and New Value Chain in SDV
    • Contract Manufacturing
    • Snapshot of Contract Manufacturers in the EV Value Chain
    • Increasing Involvement of Tier Suppliers
    • Potential Avenues for Increased Tier I Participation
    • Increased Participation from Tier Is: Platform Hardware
    • Potential for Increased Collaboration from Tier Suppliers
    • Front-End Modules
    • Increased Tier I Contribution: ADAS Development
    • MobilEye as ADAS Supplier
    • Companies as Tier 0.5 Suppliers: REE
    • REE Automotive: Technology Pillar
    • REE Automotive: P7 Platform (Classes 3 to 5)
    • Companies as Tier 0.5 Suppliers: Foxtron (JV of Foxconn & Yulon)
    • Foxtron: Technology Pillar
    • Foxtron: Offers End-to-End Forward Engineering
    • Foxconn as Tier 0.5 Supplier: Platform Provider
    • Pixmoving: Potential Tier 0.5 Supplier
    • Roles & Responsibilities in the OEM and Tier 0.5 Relationship
    • Navigating OEM Project Investments: Sample Cost Overview
    • In-House Manufacturing vs Outsourcing to Suppliers
    • Key Takeaways
    • Growth Opportunity 1: Long-Term Partnerships
    • Growth Opportunity 2: Vehicle Customization
    • Growth Opportunity 3: Strategic Collaborations
    • Benefits and Impacts of Growth Opportunities
    • Next Steps

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