Software is indeed a differentiator, as in I want as little as possible of that shit in my car. Any car where all the controls are on a giant iPad in the middle are a non-starter for me.
Physical goods companies just don't get software, and they never seem to be able to do it right. They treat firmware and software like just another line item on the BOM. Like a screw or a silicon gasket: Source it from a cheap supplier, spoon it into the product somewhere on the assembly line, and then never touch it again. As long as it meets a list of checkbox requirements, the quality doesn't matter at all. A car company that obsesses over how nicely the exterior panels fit together will, on the other hand, not even care whether icons and text are aligned on their software.
While you're right that car companies are not good at software, this is almost a blessing at this point. Imagine if they had the software talent of a Google or Microsoft and used it to implement the same fucking awful "enshittification" business models.
Plot twist - most carmakers button implementations are no better than giant iPad. Special hell to ones making dedicated climate controls using touch surfaces.
