Who Makes Money From SDVs?

I love my Mac. It's seamless integration, the way everything just works, the illusion of perfection.

But every once in a while, my Mac freezes. The spinning wheel appears. A polite message informs me that “the system has been unexpectedly shut down”.

So every time I hear someone talk about a software-defined vehicle, my brain does this:

I’m driving down a German autobahn at 250 km/h, in the left lane. Everything humming, and then the dashboard lights up: The system has unexpectedly crashed. Reboot in progress.

That’s usually where I wake up, drenched in sweat.

Software-defined vehicles (SDV) are presented as inevitable. As if resisting them is like resisting gravity or USB-C.

So I dug deeper:

• What’s actually behind SDVs?

• Does anyone make real money from them?

• And, most importantly, do users even want them?

Here’s what I found.

First: SDVs are not cheaper to produce

Despite what some decks suggest, there is no solid evidence that SDVs reduce manufacturing cost. Yes, they reduce the kilometers of wiring.
Yes, you may consolidate the electronic control unit.

But then:

• you add high-performance compute

• expensive chips

• redundant safety architectures

• massive software teams

• cybersecurity

• OTA infrastructure

• compliance overhead.

Any wiring savings are quietly eaten by silicon and software.

Now add one more thought experiment: remember the last global chip shortage? What happens next time, when all OEMs depend on central compute to ship cars?

Exactly.

Second: SDVs do reduce lifecycle costs

This part is real. Early fault detection, OTA fixes instead of recalls, better post-sale service management.
Fewer angry dealer visits.

From an OEM perspective, this is meaningful. But let’s be honest about who really loves this:


👉 Insurance companies.

- Better data.


- Better risk models.


- Better pricing.


- Lower uncertainty.

Sleep well, actuaries! SDV has your back.

Third: customers don’t want “digital cars”

They want:

• navigation that works,

• charging that doesn’t lie,

• an app that doesn’t log them out,

• software that doesn’t feel like a beta test.

And they want all of this… for free.

The audacity! Why won’t customers pay subscriptions so Volkswagen can live like Netflix? Why won’t they understand that heated seats are a content strategy?

Because customers already have:
- Netflix.
- Spotify.
- Apple Music.
- Cloud storage.
- Five forgotten app subscriptions.

They are not emotionally ready for Car+. I’m not ready, that’s for sure!

Who makes money from SDVs?

Who actually makes money from SDVs and their fashionable cousin, connected services? It is not the consumers, not the OEMs (at least not directly), and not the app stores in cars.

The only group consistently smiling are 👉 Commercial fleets.

Fleets care about:

• uptime,

• total cost of ownership,

• predictive maintenance,

• compliance,

• risk reduction.

They pay.
They renew.
They don’t complain about UX animations.

Boring. Rational. Profitable.

The Luddite conclusion

SDVs are not a gold mine. They are more like an operating system upgrade for OEMs:

• reduce operational pain,

• shift cost curves,

• improve control,

• make recalls less terrifying.

But they do not magically unlock subscription riches. And they certainly don’t make cars cheaper.

So yes, SDVs are probably inevitable.

Just don’t tell me they’re cheap, customer-loved, or a money-printing machine.

And please…
before we ship them at scale…

Let’s make sure the reboot message never appears at 250 km/h. Don’t ask me how.