Software plays an increasingly important role in modern powertrains. Software quality issues during development until start of production are a significant time-to-market risk, and in the field, a product quality impact from software problems must be avoided at all costs. Virtualization in development will play a major role in addressing these problems. Besides quality, the main motivation is cost reduction and improved time-to-market. The paper shows several aspects the industry should consider for large-scale adoption. Supplier cooperation, cross-company processes, work split models, and data sharing are key highlights. Virtualization is growing in importance not only until start of production, but also through to end of product life—for both passenger cars and heavy-duty vehicles, digital twins offer clear benefits. For European car manufacturers, Software in the Loop is essential for global competitiveness and managing frequent product launches and updates. Real development project examples will be briefly discussed to underline virtualization’s benefits and relevance. The virtualization level of control units is not always sufficient for all test types. These limits will be described along with a catalogue of recommended use cases.