Why can’t traditional carmakers understand the importance of software?

Enrique Dans
Enrique Dans
Published in
3 min readDec 26, 2023

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IMAGE: A car entertainment system with software symbols
IMAGE: Asawin — Pixabay (CC0)

GM has been forced to temporarily halt sales of its Chevy Blazer EV after detecting a host of potentially dangerous software problems. GM is just one of many traditional carmakers to suffer software problems, as has Volkswagen, illustrating a fundamental change that the industry is simply not able to understand — let alone fix.

Software is increasingly the most important part of a car, something that traditional have yet to fully grasp,and that still think of it in terms of entertainment and GPS. As a result, they continue using very old chips that are incapable of supporting the new features that the latest vehicles require. Most car companies are still run by petrol-heads who only think in terms of compression, cylinders and fuel consumption, factors in an already obsolete internal combustion technology, and so tend to outsource software to a third party, seeing it as a nuisance — except when it comes to trying to make the vehicle simulate lower consumption or emissions, as in the successive reenacments of the dieselgate (the most recent at the beginning of December involving Mercedes-Benz).

We’re talking about a generational shift here: older managers who neither understand nor want to understand software at all, as opposed to those who identify with the technology industry rather than the…

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Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)