One problem related to software has been reported for the 2005 Volvo S40. The most recently reported issues are listed below.
The starter control unit (scu) on my 2005 Volvo S40 has ceased to function twice in the 5 years that I've had it (50,000 miles). Essentially, this means that the scu does not read the key (the car tells me I have a "key error"), and therefore the car shuts down completely and does not turn on (the steering locks, the car does not start, it is unusable). The first time it happened, it was under warranty, therefore it was fixed free of charge. It happened again last month, was diagnosed by the bill pearce (reno, nv) dealership as the same issue, and I was given a 50% discount on the repair. It is an issue that apparently many other 2005 Volvo S40 owners have had (learned this through a simple internet search), but it is not recognized as an issue with Volvo and is not a recall item. It is a software problem, not a wear and tear item or something that I can maintain and keep from happening. It should not be something that I have to pay several hundred dollars to fix. There is no warning when this is about to happen. The car works on minute and then doesn't the next. I have no way of knowing when it is going to happen, and was stuck 200 miles from a dealership the last time it happened. It can supposedly be fixed only by the dealership because it's needs the proper software download. Please look into this issue. I have a car that I can no longer trust and the dealerships don't recognize it as a legitimate issue. I have all the documentation to provide if necessary.