Auto software development needs a cultural transformation

As the automotive industry shifts away from mechanics and towards electronics and software, players both old and new are scrambling to build new capabilities. It’s easy to understand why: a report by Boston Consulting Group forecasts that software-defined vehicles (SDVs) could unlock up to US$650bn of new value by 2030. Little surprise, then, that legacy brands like Audi, BMW, Mercedes-Benz, and Volkswagen have all founded R&D hubs in the San Francisco Bay Area—California’s tech industry mecca.

At this stage, however, many OEMs are struggling to attract the tech talent necessary for realising this potential. Part of the issue is cultural: automakers traditionally have highly structured employee development and progression, where fresh graduates enter and gradually rise through the ranks until retirement. In contrast, Big Tech firms emphasise a more fast-paced and experimental environment. Another significant factor is daily work patterns.