Industry Insights Blog Series
The automotive industry is entering one of the most profound transformations in its 100+ year history. The shift to Software-Defined Vehicles (SDVs) is more than a technology change — it’s an existential business shift.
Just as the iPhone reshaped the mobile industry, SDVs are set to redefine what cars are and how value is captured.
The iPhone Lesson
Think back to 2007. Apple’s first iPhone was, by most measures, a terrible phone. Call quality was bad, dropped calls were common, battery life was worse, and the device was bigger than what customers expected.
And yet, the experience was revolutionary. Apple didn’t just ship a better phone. They rewrote the rules by owning hardware, software, and services in one integrated experience. Every other phone maker was commoditized into being a hardware supplier, while Google’s Android controlled the software and service layer. Samsung kept pace on hardware but surrendered the services to Google.
Fast forward to today, and we see history repeating in automotive.
Tesla’s early cars weren’t paragons of quality either. But they offered a new experience: a vehicle where software defined everything. Tesla owned the hardware, the software, and the services. Fast followers tried, but most OEMs fell back on the comfortable playbook: compete on hardware, outsource the software and services to Tier Ones and now, often to Google.
In doing so, they risk becoming commodities in the rolling hardware market, pushed on price and features by China, and trapped in Google’s orbit on software.
Why OEMs Don’t Have Ten Years to Figure This Out
In mobile, it took nearly a decade for integration standards to emerge that made Android adoption manageable across Phone OEMs. The automotive industry does not have that luxury of time.
Legacy OEMs face a perfect storm:
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Massive cost burdens of one-off system integrations
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Legacy organizational structures slowing transformation
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An ROI horizon that stretches painfully far into the future
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Shrinking differentiation when the experience boils down to “Who makes the better Android car?”
If this continues, OEMs risk repeating the mistakes of the past: letting someone else capture the value while they shoulder the cost.
→ Watch On-Demand Webinar: Leading into 2026: Insights for the Software-Defined Vehicle era
The Battle for Perceived Quality
American automakers once ceded the high ground to Japanese brands like Honda and Toyota — not because of design or marketing, but because of one unshakable truth: quality wins.
It took decades of focus, billions in investment, and sweeping digital transformation to close the gap. Yet even now, the original differentiation persists. You can still see it on used car lots: Toyotas and Hondas command higher resale values, not just for what they are, but for what people believe they are — reliable.
The same warning lights are flashing for SDVs. Every failed OTA update, every glitch in an HMI, every recall tied to software chips away at perceived quality. And once that trust is lost, the cost to regain it can take decades — and billions — just as it did before.
In the era of software-defined vehicles, software quality = brand quality.
Quality is the foundation of trust. OEMs need tools that ensure that the software delivered through CI/CD pipelines delivers not just speed of updates, but confidence. New features, yes — but also the assurance that safety and reliability are never compromised.
Learn about: Automotive Software Quality Solutions
China’s Disruption — and the Narrow Window Left
Chinese OEMs have leapfrogged by being unburdened by legacy systems, buoyed by government investment, and fueled by IP absorbed from legacy automotive partnerships. They dominate global sales volume, but not yet global profit.
Here’s the opportunity: the U.S. still represents 60% of automotive profits, and recent regulations ban vehicles with Chinese hardware and software dependencies. This buys legacy OEMs a window — but not a wide one — to reinvent themselves.
Ironically, legacy OEMs are now heading into China not just to sell, but to learn. They’re studying the efficiencies, speed, and digital-first manufacturing practices of their Chinese counterparts and bringing those lessons back.
The Path Forward: Partnerships, Not Vendors
OEMs can’t do this alone — not fast enough, not cost-effectively enough. The winners will be those who forge deep partnerships across hardware, software, and middleware providers to create standard, modular integrations that enable speed without sacrificing differentiation.
OEMs must provide a quality experience delivery platform for SDVs:
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From design to chip to screen
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From integrations with HW to OS to middleware to services
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From safety to compliance to monetization
OEMs must own their hardware, software, and services — and most importantly, their brand experience to avoid becoming a rolling hardware commodity.
Read Strategic Playbook: Software-Defined Vehicles Need Software-Defined Leaders
Closing Thought
Automakers are at an inflection point. The wrong path leads to commoditization, lost differentiation, and repeating the mistakes of the past. The right path is harder but offers far greater reward: an ecosystem where OEMs reclaim control of their future.
It isn’t just about tools, but solutions integrated partnerships within the ecosystem to help OEMs shorten time-to-market, improve quality, reduce costs, and unlock new revenue streams long after the sale.
Because in the age of SDVs, it’s not just about building cars.
It’s about building experiences that last.
The future of automotive isn’t about miles per hour, nor miles per gallon or charge, but about Memories per hour.
Learn more about Qt in Automotive.
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