Embedded software and electronics are major contributors of values in vehicles, and play a dominant role in vehicle innovations. The design of automotive embedded systems has become more and more challenging, with the rapid increase of system complexity and more requirements on various design objectives. Methodologies such as model-based design are being adopted to improve design quality and productivity through the usage of functional models. However, there is still a significant lack of design automation tools, in particular synthesis and optimization tools, that can turn complex functional specifications to correct and optimal software implementations on distributed embedded platforms. In this paper, we discuss some of the major technical challenges and the problems to be solved in automotive embedded systems design, especially for the synthesis and optimization of embedded software.