Bilgesu Erdem
Volkswagen‘s tech-savvy software unit, Cariad, encounters tumultuous waters, with a delay in the release of its new software platform and an impending round of significant layoffs. These setbacks are amidst Volkswagen’s attempt to redefine vehicle software technology and compete on a global scale.
The Software Strain
The eagerly anticipated software architecture 1.2, dedicated for vehicles like the Porsche Macan EV and the Audi Q6 E-Tron, has hit a roadblock. Originally set for a 2022 release, expectations shifted to the end of 2023 to coincide with 2024 VW models. Now, with Cariad announcing a job cut of 2,000 positions, a further delay pushes this release to potentially no earlier than 2025.
In addition, the current Volkswagen fleet operates with software version 1.1. Cariad’s plans for a comprehensive version 2.0, envisioned for all VW Group brands, have also been staggered. Previously pinned for a 2025 release, the present workforce cutbacks necessitate a ground-up redevelopment of the software.
Ambiguity surrounds the Porsche Macan EV’s debut, anticipated for early 2024, and whether this tumult at Cariad would cause its delay remains unanswered.
Broader Impact on VW’s Electric Vision
Beyond just software, the turbulence at Cariad ripples through Volkswagen’s broader electric vehicle ambitions. The forthcoming Scalable Systems Platform, a versatile architecture designed for EVs ranging from hatchbacks to the elite Porsches, finds itself in the crosshairs of these setbacks.
Volkswagen’s journey in the realm of software-loaded vehicles hasn’t been smooth. The car manufacturing giant grapples to keep pace with contemporaries like Tesla, Ford, and General Motors, who are making strides with software-centric vehicles. These vehicles aren’t just smarter; they open floodgates to alternative revenue channels via in-vehicle entertainment and assorted services.
In a previous optimistic forecast in 2021, the VW Group projected Cariad’s potential to rake in a staggering โฌ1.2 trillion ($1.4 trillion) by 2030 through novel revenue streams like subscriptions.
Boardroom Shuffles
Cariad’s trajectory has seen its fair share of corporate maneuvers. Notably, May witnessed the helm of Cariad changing hands from CEO Dirk Hilgenberg to Peter Bosch, familiar with overseeing manufacturing operations for VWโs luxury Bentley line. Boschโs leadership heralded the hefty staff reductions.
While VW Groupโs top-tier board sanctions the downsizing between 2024 to 2025โs end, a nod from VW’s works council remains pending. This council, however, has committed to preserving employment until mid-2025.
As Cariad undergoes its transformation, the software unit’s course correction holds implications not just for Volkswagen but also for the wider automobile landscape. While challenges persist, Volkswagen’s commitment to shaping the future of vehicle technology remains resolute. It’s a space of convergence, where innovation meets the rubber on the road.
