Comment by shadowpho
Two points to add:
1) Total cost of the vehicle does not matter. What does matter is the operating margin. Half a percent of the total cost of the vehicle will move them from 2% margin to 1.5% margin. (Ford has operating margin of 2% as an example)
In other words an increase in 0.5% cost of total vehicle will reduce their profits by 25%.
That’s a huge number now! Note also that car manufacturers are in a bad spot because their volumes are fairly low (smartphone = 1M/yr, car = 40k/yr) and have harsher requirements for chips, driving the cost way up.
2)AB updates are great, but they can still fail or get soft locked. Especially important around code when you configure the slot to be good and when bad.
You are conflating gross and operating margin.
It's also more dynamic than your presentation. They have a little bit of pricing power, so a small increase doesn't all come out of the margin.