Interview: How Volvo Built Software for a Two-and-a-Half-Tonne Moving Object

Why It Matters

Volvo’s SDV breakthrough shows traditional carmakers can become software leaders, delivering cost‑saving cross‑system designs and reliable OTA updates that reshape competitive dynamics in the EV market.

Key Takeaways

• Volvo reached S&P Level 5, the only automaker with full SDV capability
• HuginCore’s single codebase powers EX60, EX90, ES90, enabling rapid OTA updates
• Cross‑system optimisation cut a $162 heater, adding $9 motor components
• 2.2 million vehicles receive quarterly updates with 99.9% success target
• Volvo invested $28 m in a 25,000 sq m software test centre

Pulse Analysis

Volvo’s transition from a conventional carmaker to a software‑defined vehicle (SDV) pioneer underscores how legacy automakers can reinvent themselves in the electric era. By consolidating all vehicle functions onto a single HuginCore codebase, Volvo not only achieved S&P’s Level 5 rating but also unlocked the ability to push new features—such as Google Gemini conversational AI—to cars built years earlier. This unified architecture mirrors the practices of tech giants like Apple and Microsoft, allowing rapid, consistent updates across model lines while maintaining safety standards required by ISO 26262.

The OTA strategy delivers tangible cost efficiencies and supply‑chain agility. A notable example is the elimination of a $162 electric heater in extreme‑cold markets, replaced by an $9 motor‑based heating solution that leverages existing hardware. Such cross‑system optimisation would be impossible under the traditional tier‑one ECU model, where hardware and software are bundled. By controlling the integration layer, Volvo can iterate on hardware‑software trade‑offs in real time, reducing part counts, lowering vehicle weight, and improving margins—all while delivering a seamless user experience.

However, the shift demands massive internal investment and a new talent pool. Volvo built a $28 million, 25,000 sq m test centre to develop proprietary toolchains, testing rigs, and deployment pipelines, because no off‑the‑shelf solution existed for safety‑critical automotive software at scale. The scarcity of seasoned automotive‑software engineers means the discipline is still nascent, forcing companies to cultivate expertise in‑house. Volvo’s experience raises broader questions about which software layers will become commoditized versus kept proprietary, a debate that will shape not only the auto industry but any sector undergoing digital transformation. The lesson for peers is clear: start early, invest heavily in infrastructure, and treat the vehicle as an integrated software product rather than a collection of isolated modules.