Hallucination in LLM-Based Code Generation: An Automotive Case Study

Large Language Models (LLMs) have shown significant potential in automating code generation tasks offering new opportunities across software engineering domains. However, their practical application remains limited due to hallucinations - outputs that appear plausible but are factually incorrect, unverifiable or nonsensical. This paper investigates hallucination phenomena in the context of code generation with a specific focus on the automotive domain. A case study is presented that evaluates multiple code LLMs for three different prompting complexities ranging from a minimal one-liner prompt to a prompt with Covesa Vehicle Signal Specifications (VSS) as additional context and finally to a prompt with an additional code skeleton. The evaluation reveals a high frequency of syntax violations, invalid reference errors and API knowledge conflicts in state-of-the-art models GPT-4.1, Codex and GPT-4o. Among the evaluated models, only GPT-4.1 and GPT-4o were able to produce a correct solution when given the most context-rich prompt. Simpler prompting strategies failed to yield a working result, even after multiple refinement iterations. These findings highlight the need for effective mitigation techniques to ensure the safe and reliable use of LLM generated code, especially in safety-critical domains such as automotive software systems.