What happens to a car when the company that developed the software goes bankrupt

In an era where cars are no longer just mechanical machines but computer systems on wheels, one question is becoming increasingly relevant: what happens to a car when the company behind its software goes under? This dilemma is no longer theoretical – software is deeply embedded in everything from engine management to driver assistance systems and connected services via the mobile network.

Traditionally, when a car manufacturer ceased to exist or service a model, owners could rely on independent workshops and spare parts to keep the vehicle on the road. But with modern “smart” cars, software becomes a critical component without which the vehicle does not function optimally, and sometimes even cannot start or use all safety features.

The key problem is that many functions in modern cars depend on specific software that is closed source and only available from the original developer. When that company goes under or stops supporting certain products, automakers and owners (depending on the contract and legal framework) may lose access to security updates and patches without which vehicles become more vulnerable to exploits and even simple bugs that affect the management of assistance systems or control units (ECUs).

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Also, without connected cloud services, features like real-time navigation, remote locking, traffic updates or even sensor data transmission can simply stop working when company-maintained servers go down.

In addition, compatibility with new hardware is also a problem, because without updates, systems can become incompatible with new communication standards, mobile networks or sensors, leaving the vehicle “stuck” in a software version that no longer meets real requirements.

This scenario is especially relevant for car startups and manufacturers that use AI-based driving assistance, whose capabilities often require constant model updates and safety upgrades. When an AI or telematics company fails, it’s not uncommon for cloud-based services to simply stop working, leaving the vehicle with limited or unusable systems.

Some manufacturers and software factories have tried to provide solutions in several ways:

  • Open standards and documentation – ideally, automotive platforms would allow independent developers to download code and continue support. This is rare, as most systems remain closed for business and security reasons.
  • Shifting to software-as-a-service (SaaS) models with multiple vendors – if the core software vendor fails, the automaker can hire another firm to take over support.
  • Requirements for access to firmware and tools – In some jurisdictions, regulators are considering requiring car and software manufacturers to provide access to code and repair tools to third-party service providers to reduce dependence on a single company.
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However, the reality is that most cars today come with a mix of hardware and software components whose lifespan is tied to the company that designed and supported them. When that company disappears, the car owner may find himself in a situation where the vehicle continues to run “as is” but will not receive any repairs or security patches. Related functions become unusable as servers and cloud infrastructure no longer exist, and independent system development and repair become uncertain or impossible due to closed code and lack of tools.

For car owners, this means that the long-term use of vehicles depends more on software ecosystems than traditional mechanics, a trend that raises new questions about how “ownership” is defined, who is responsible for system security, and how regulators should approach cars that are instantly connected and constantly updated by digital services.

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This opens a wider debate in the automotive industry: while software and digital services have become the core of modern vehicles, the longevity and sustainability of the technology is no longer just a technical question, but also a legal, economic and security dilemma whose consequences could shape the strategies of manufacturers and the rights of consumers for years to come, reports Ars Technica.

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