Volkswagen’s Cariad Software Division Faces Major Setback
Volkswagen‘s software division, Cariad, has once again decided to postpone the launch of its new software architecture due to a significant round of workforce reductions. This move comes merely three years after the establishment of Cariad and just six months following a notable executive reshuffling.
As per reports from the German publication Manager Magazin, Volkswagen’s Cariad Software Division is preparing to eliminate approximately 2,000 positions in a bid to streamline its operations. Unfortunately, these layoffs will result in a substantial delay in the release of Volkswagen’s software architecture 1.2, extending the timeline by 16 to 18 months.
Initially, the software 1.2 platform was intended for the Porsche Macan EV and the Audi Q6 E-Tron, with a completion target set for 2022. However, under the leadership of Peter Bosch, who assumed control in May, the release date was shifted to the end of 2023, aligning it with the 2024 VW model lineup. Regrettably, it appears that the software 1.2 platform will not find its way into vehicles until at least 2025.
It’s worth noting that Volkswagen’s current vehicles are already equipped with the software 1.1 version. Moreover, Volkswagen’s Cariad Software Division is actively engaged in the development of a 2.0 version, which serves as an operating system designed to encompass all brands within the VW Group. Originally slated for a 2025 launch, the recent layoffs have compelled Cariad to embark on a complete redevelopment of the software from the ground up.
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In a notable development, Volkswagen’s software sector has undergone a substantial workforce reduction, resulting in the layoff of 2,000 employees. This move comes as Volkswagen adapts to the evolving landscape of the automotive industry, placing a greater emphasis on electric vehicles and autonomous driving technology. While challenging for those affected, these strategic changes are part of Volkswagen’s commitment to staying at the forefront of industry innovation and ensuring long-term competitiveness.
At present, it remains uncertain whether these workforce reductions will have a cascading effect on the launch date of the Macan EV, which had initially been scheduled for early 2024. Unfortunately, Volkswagen has yet to provide any clarification in this regard.
The restructuring process, as reported by Manager Magazin, will also cast a shadow over the next-generation Scalable Systems Platform, an architectural framework that Volkswagen’s Cariad Software Division aspires to employ across its electric vehicle range, spanning from VW hatchbacks to high-performance Porsches.
Volkswagen’s Cariad Software Division has grappled with persistent challenges in delivering software within its vehicles, which has placed the company at a disadvantage when compared to competitors that have embraced software-defined vehicles, a trend popularized by Tesla and embraced by the likes of Ford and General Motors.
Beyond the obvious benefits of more intelligent automobiles, software-defined vehicles offer automakers lucrative opportunities to generate additional revenue through in-car entertainment and services. In 2021, the VW Group had aspired for the Volkswagen’s Cariad Software Division to potentially amass as much as €1.2 trillion ($1.4 trillion) in revenue by 2030, primarily through subscriptions and ancillary sales.
The journey of Volkswagen’s Cariad Software Division has been marked by a series of setbacks and delays, prompting various leadership changes. Notably, in May, the board of Volkswagen’s Cariad Software Divisionappointed Peter Bosch as the new CEO, replacing Dirk Hilgenberg. Bosch, formerly responsible for manufacturing at VW’s Bentley brand, subsequently oversaw the challenging decision to reduce the workforce by 2,000 employees as part of a comprehensive restructuring strategy, as reported by Reuters.
It’s crucial to underscore that VW Group’s board of directors has given its approval for the downsizing initiative, scheduled to take place between 2024 and the end of 2025. However, the plan is contingent on approval from VW’s works council, hence which has thus far guaranteed job security for employees until mid-2025.