Car companies are in a billion-dollar software war

I know Mazda makes good boring SUVs, I own one. I like Mazda's design philosophy, that's why I want them to succeed. In terms of vehicles sold, Mazda's sales peaked in 2017, the year before I bought my most recent one. As best I can tell, operating profit peaked in 2016.

Mazda maintained their relevance and independence by operating their own center of design, engineering, and manufacturing excellence in Hiroshima, and exporting the results to the rest of the world, since at least the 1960s. As I mentioned, that thread is now broken as far as EVs go, with the Changan JV making EVs for Mazda. China is now producing excellent EVs that surpass the capabilities of ICE cars at a fraction of the cost/price, thanks to continuous improvements in LFP battery technology. China also dominates solar, which (together with the batteries) solves the grid stress issue for large EV deployments in most regions of the world. Together these exports are likely to disrupt Japanese, US, and European ICE exports and energy markets throughout the world, no matter what tariffs the US chooses to enact.

Mazda and the rest of Japanese companies slept on it, led by Toyota's trust in the hydrogen-powered future that didn't materialize, even while Panasonic had the best batteries in the world. The time to invest in these platforms and technologies was 15 years ago - now they will have a far harder time financing this and finding technology development partners. Sure, they can survive - not thrive - on existing ICE exports for a while, but they will face a shrinking market and stronger headwinds - and are likely to lose their independence, which is what allowed them to design great cars. Don't believe me? Look into what's going on with Nissan (which squandered an even bigger lead - the world's first mass-produced EV).

Yes sometimes it’s a dollar or two and it really adds up quick. Sometimes 10’s of dollars. That door speaker can be few dollars cheap - you may get 2% more THD in a frequency band… the conversations can be really reduced down to ‘meh subjectively not noticeable’ but will save us a million. Add few of these things and now you have a shitty radio system but 5 mil in bank.

There are a few reasons, using the hardware manufacturers’ logic.

1) The more you open up your design and its behaviour, the more your competitors can learn about your product and how to possibly improve their own. Even stuff as basic as what specific features/capabilities a specific SKU at a specific price point has can be useful information.

2) The behaviour may be sufficiently undefined as to make documenting it impractical (or a bad look). Specs may also be padded (“up to 14 bits of SNR” may mean you’re getting 8 most of the time unless you’ve got a golden sample, and you’re not getting the distribution without paying big bucks and signing a big NDA). This ties in with 1) - if your competitors know your exact yields, they might be able to advertise being better/more reliable more truthfully, or even cheap out on their manufacturing a bit to drop their own yields down to match or just slightly beat yours.

3) The behaviour might be unknown. There’s obviously a crazy amount of validation testing that goes into high-end chips, but even the best test plan can miss things. This is especially true when you’re talking about high-speed stuff and anything involving power delivery/voltage fluctuations, or async/pipeline executions, or a million other things that can go wrong. Again ties into 1) - if your competitor knows that your chip might deadlock the radio with an obscure pattern of inputs and control signals, that could give them insight into how you’ve laid out your silicon and might give them optimization ideas.

4) If all the available info is given out freely, then potential customers can easily compare manufacturers and pick the best one. The manufacturers don’t want this, unless they’re the best, for obvious reasons. And, because everything’s locked down so tightly, no one knows if they’re the best until the chips are on the market and the volume contracts are already signed. And those contracts are hard to break, since the specs agreed upon are pretty vague due to 1-3.

5) The manufacturer knows their chips suck, but needs them moved anyways. This is rarely the case from most non-discount manufacturers, but it can happen. In this case, you don’t want to give away anything you don’t have to, because most info you give out is going to drive customers away to a better option. Good example in the consumer space is Intel refusing to publish acceptable voltage specs for their 12-14th gen Core chips, which resulted in motherboard manufacturers overvolting and killing high-end CPUs to try to meet the frequency specs Intel was advertising. If Intel was truthful in their voltage and frequency specs, there’d be a minuscule percentage of chips that could actually hit the advertised frequency at safe voltages, and 99% would have worse performance than expected, which would almost definitely result in lower sales.

6) The behaviour may be highly dependent on external factors. Basic example, a chip with external DRAM might have its execution pipeline stalled more or less frequently based of DRAM spec, or a wobbly voltage regulator might be known to cause lockups when certain executions are happening. Are you going to tell your customer those problems, or just say “we recommend high-speed DRAM and high-quality VRMs?” Especially if the other guy just says “we recommend high-speed DRAM and high-quality VRMs?”

The world would likely be a better place without such logic, but the incentive is there. Until someone comes and breaks the paradigm, I don’t see things changing.

> It's not practical to produce a car that never needs updates. That would be a bug-free system, which is impossible.

Hmm, I disagree. Bug-free systems are expensive and hard, and get more expensive and harder as complexity increases, but you can absolutely produce a car that never needs updates. The vast majority of computer-controlled cars from the 80s to the early 2010s never needed updates, and the ones that did were performed at dealers (and were usually for non-critical things, because the critical things were simple).

GM had a good run in from the mid-90s to the mid-00s producing bug-free cars, even with some complexity. I don’t know of any software issues on any cars with LT1 or 3800 engines, nor with any of the tech in the Northstar Cadillacs. Displacement-on-demand could be considered a buggy implementation, but it was working as designed, and never got patched out, so I don’t think it counts.

That’s of course ignoring the decades of cars that had no computers at all. No software bugs being patched out with OTA updates in a carburetter (you have other problems obviously though, namely terrible fuel economy and emissions, and generally lower reliability).

If you make it a hard requirement for a car to be bug-free (maybe outlaw OTA updates and force physical recalls on any software problem?) I can guarantee manufacturers can make a bug-free car. It’ll just be way less complex and have way fewer flashy features, and will either cost more or have lower margins. It’s been done in the past, it can be done again.

There is a sweet spot for the level of computerization in cars. We had it somewhere around the year 2000, then waaaaay overshot, and haven’t corrected back.

Mazda’s operating margin is higher than Walmart’s (along with many others). I think hyper scalable sectors like high tech and finance distort our OM expectations.