It seems you're thinking of the "full cost of the engine" as like material + labor to produce 1 engine. So profit vs loss is equivalent to whether you pay more or less than the unit cost of 1 engine.

Car manufacturer thinks of the cost of the engine as something like research + development + testing + sourcing + manufacturing lines + materials for all engines produced + labor for all engines produced. So for the manufacturer profits are total revenue of units sold minus total costs. To maximize profits they need to identify market segments and figure out the best way to sell into them, in some cases by selling one physical model at different price points.

If a manufacturer only targeted your market segment with a model you wouldn't get a cheaper car, you'd most likely get roughly the same car for the same price. (Ignoring design/feature compromises made to try to address one model to multiple market segments)

Not that I agree with VW or holding features behind a subscription. Just that we can understand the unit economics of why. And anyway subscriptions for hardware features are a different matter entirely.