When asked to describe the cars of the mid-twentieth century, people often associate them with their engines. From Chevrolet and its small-block V8s to Porsche and its flat-six "boxer" engines, the machine under the hood was a defining part of the vehicle.
Compare that to the twenty-first century, and you'll likely picture something very different. Today, large infotainment displays, advanced driver-assistance systems, over-the-air updates, and connected services all contribute to the image of the modern vehicle as a software-defined machine.
Yet the distance between the rumbling engines of 80 years ago and the sleek space-age models many drive today is smaller than it first appears. While software-powered features may dominate the headlines, software has quietly been transforming the automobile for decades, not only through customer-facing features, but also through the systems that control the engine and powertrain itself.
Quiet software: The technology inside the engine
The earliest automotive engines operated with no software. Performance was entirely by mechanical engineering, which limited how effectively vehicles could respond to changing conditions. On cold mornings, at high altitudes, or while idling in traffic, engines often struggled to maintain optimal performance.
This began to change in the late 1970s with the introduction of the Engine Control Unit (ECU), which automatically adjusted fuel delivery and other engine parameters based on data collected from onboard sensors.
Today, software within a modern engine continuously monitors data from dozens of sensors and makes thousands of adjustments every second to optimize performance. It precisely controls fuel injection, ignition timing, and air intake to maximize power and fuel efficiency. It also manages technologies such as variable valve timing, turbocharger boost pressure, and electronic throttle control, allowing the engine to adapt seamlessly to different driving conditions.
While drivers rarely see this software in action, its influence is profound.
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From supporting the powertrain to running it
Over time, software's influence expanded far beyond optimizing the internal combustion engine. As hybrid and electric vehicles have become more common, software has moved from enhancing the powertrain to enabling it.
In traditional ICE vehicles, software improves performance and efficiency. In electric and hybrid vehicles, software is fundamental to the propulsion system itself. Without software coordinating the battery, inverter, electric motor, and energy management systems, the vehicle simply cannot deliver usable power.
A good example is the power control unit in a plug-in hybrid electric vehicle (PHEV). This system includes an inverter that regulates power conversion and delivery, converting direct current (DC) from the battery into alternating current (AC) for the electric motor. The software continuously manages how energy flows throughout the vehicle, balancing efficiency, performance, and battery health.
Even in conventional internal combustion vehicles, software has become indispensable. Modern automatic transmissions rely on sophisticated software algorithms to determine shift timing and optimize performance based on driving conditions and driver behavior.
While drivers rarely see software in action, its influence on achieving optimal performance is profound
Read more about PHEV technology and what makes up a hybrid powertrain.
Software is becoming the vehicle's defining feature
The software revolution didn’t stop with the powertrain, however. Over the past several decades, most of our vehicle’s systems – and the interfaces where a consumer interacts with the vehicle – have come to rely on software as a foundation for both internal and driver-facing systems.
As software's role has expanded, so too has its influence on how automakers create value. Increasingly, consumers are paying less attention to engine specifications and more attention to the digital experiences their vehicles provide.
Software now powers everything from intelligent driver assistance and predictive maintenance to connected services and over-the-air feature updates. Automakers are investing heavily in these capabilities, introducing features such as automatic emergency braking (AEB) and hands-free highway driving.
At the same time, software is creating entirely new business models. Subscription-based services are becoming more common, allowing customers to unlock additional capabilities such as premium navigation, and heated seats.
General Motors, for example, has reported significant growth in its OnStar subscription platform, while Ford Motor Company expects as much as 20% of its earnings to come from software and services by 2026.
For OEMs, success is no longer determined solely by hardware engineering. Rather than waiting five years for a new vehicle generation, manufacturers can continuously improve products through regular software updates, keeping vehicles current long after they leave the factory.
Read more about why the 80/20 rule is reshaping powertrain strategy.
A new automotive industry model
For much of automotive history, what mattered most was what sat under the hood. Today, as electric and hybrid powertrains become more common and mechanical differences become less visible to drivers, software is increasingly becoming the defining characteristic of the vehicle itself.
For OEMs, this raises a question about the traditional automotive business model. If software, connectivity, and in-vehicle experiences are becoming the primary sources of differentiation, does every manufacturer need to develop its own powertrain from the ground up?
At Horse Powertrain, we believe there is another way. As a specialist powertrain partner, we can focus on designing, integrating, and advancing powertrain technologies, allowing OEMs to concentrate their resources on the software, services, and customer experiences that increasingly define the modern vehicle.
Software will remain critical throughout the vehicle, including within the powertrain itself. But as its influence continues to grow, it may be time to rethink how responsibilities are divided across the automotive value chain.
Find out more about our next-generation powertrain solutions here.
