Recently, at a future financial summit , Volkswagen Group CEO Herbert Diess elaborated on the Volkswagen Group’s current supply chain, factory capacity, vehicle software and other issues. Among them, regarding vehicle software development, Diess proposed that the Volkswagen Group’s vehicle software self-sufficiency rate will reach 90% in 10 years.
Judging from the Volkswagen Group’s development goals in vehicle software, in the next 10 years, the Volkswagen Group will strive to transform into a world-leading automotive software service provider based on the 2030 strategy. To this end, the Volkswagen Group has made significant investments in the vehicle software domain in the Chinese and US markets to accelerate the achievement of its goals.
At present, the automobile industry as a whole is in an era of intelligent development. Under this situation, vehicle software development is also an important choice for the Volkswagen Group. But what exactly does the Volkswagen Group’s so-called vehicle software self-sufficiency include? What measures will it take to achieve the 90% goal in the next 10 years? At a deeper level, is it necessary for Volkswagen and other car companies to achieve self-sufficiency in vehicle software?
|What does Volkswagen’s vehicle software research and development include?
According to the Volkswagen Group’s relevant plans for vehicle software development, its self-sufficiency rate will reach 90% in 10 years. In fact, Volkswagen's development of vehicle software is not new. It is understood that as early as 2020, Volkswagen began to reduce its reliance on software partners and gradually turned to developing its own in-car software.
From the overall architecture of automotive software, it can be mainly divided into system software, functional software and application software. Among them, system software is the basis of the vehicle operating system, which can provide efficient and stable environment support for the realization of upper-layer applications and functions, and plays a core position in the mutual scheduling of software and hardware. Functional software mainly includes the core of autonomous driving and related modules. Application software includes cockpit functions, data maps and other contents, and is the focus of personalized creation of automobile smart cockpits.
is based on the scope of automotive software architecture, which means that the Volkswagen Group must not only develop software for Internet of Vehicles, data functions, infotainment, etc., but also conduct research and development on intelligent technology, software-controlled automotive systems, and overall electric vehicles , driver assistance systems and even autonomous driving are being developed on a large scale.
Looking at it now, Volkswagen Group’s vehicle software share is less than 20%. Like most traditional car companies, more of its software is developed in cooperation with large IT technology companies, first-tier suppliers and other third-party software. For the Volkswagen Group, this method of software development and application means that it only has partial control over the relevant data.
For this reason, the public hopes to expand the types of software research and development to the greatest extent with the goal of gaining more control. In this process, achieving 90% self-sufficiency rate for vehicle software is only one step. The most important thing is to achieve self-sufficiency in the entire software architecture.
|Volkswagen is transitioning to software
As the shortage of chips continues to spread, many car companies are currently gradually carrying out research and development plans for related chips. But objectively speaking, achieving self-sufficiency in vehicle software is not a simple goal. To this end, the Volkswagen Group has also made a series of related plans in this field.
According to Dis's attitude at the financial summit, he proposed that in order to better support the widespread application of Volkswagen Group vehicle software, Audi and Porsche new cars that are about to be released are expected to be gradually equipped with self-developed software in subsequent upgrades. Of course, there is still a long way to go, and Volkswagen is still in the stage of continuing to acquire software-related teams and companies.
In order to accelerate its development capabilities in the field of vehicle software, Volkswagen has made significant investments in China and the United States. Among them, the newly established CARIAD software company is an important step for Volkswagen to promote development. According to Volkswagen's development plan for CARIAD, it is expected that 30% of the software on Volkswagen products will be developed by CARIAD in 2025. This proportion will increase to 60% in 2030, and core functions such as artificial intelligence , big data, and security systems must be 100% independently developed.By 2032, Volkswagen’s vehicle software self-sufficiency rate will increase to 90%.
Based on this, CARIAD Software Company has become an important layout for Volkswagen’s vehicle software research and development. In the next three years, CARIAD will first shoulder the task of completing the research and development of three major platforms: the mass-production software platform MEB, the high-end software platform PPE, and the operating system VW.OS that can support the public’s independent research and development. The independently developed VW .OS is the ultimate goal for the masses.
It is understood that CARIAD currently has more than 600 employees in China, and it is expected to double the number by the end of 2023, of which more than 90% will be local software talents. At the same time, Volkswagen will continue to invest 2-2.5 billion euros per year in CARIAD to accelerate the development of its software business.
| Opportunities and challenges of self-developed software
At present, the automobile industry as a whole is showing a development trend of electrification and intelligence. In the process of building smart cars, software will be the core of differentiation. According to predictions by relevant organizations, by 2030, the software value in a car product will account for 30%, and the global automotive software market will reach US$84 billion.
Under the combined influence of market prospects and industry development trends, car companies and software suppliers with leading software and algorithm capabilities will receive an important development opportunity. On this basis, Diess has regarded the future software business as one of the important sources of profit.
Among traditional automobile companies, Volkswagen is not the only one to position its development direction towards self-research and self-sufficiency of software. Stellantis, Toyota , Mercedes-Benz , etc. have also made similar decisions one after another. At the same time, new car-making forces NIO, Leapmotor, Xpeng, etc. have also announced the same plan. In the current new automobile era, self-development of vehicle software seems to have become a trend.
On the one hand, a large number of automobile companies have joined the software self-research team; on the other hand, there are many problems in the field of software research and development. Relevant experts have analyzed and pointed out that self-research of vehicle software is a high-end and complex technology. It not only requires technologies in multiple fields such as vehicles and communications, but also consumes a lot of time and energy, and may not be successful. From this perspective, it is very difficult to conduct self-research on software in a short period of time. In addition, many car companies currently rely on third-party cooperation for software design. If they expand the scale of self-research at this time, it will inevitably affect existing cooperation to a great extent.
From this point of view, it is not easy to develop vehicle software and achieve self-sufficiency. Although the market will be large in the future, it is still a crossover for car companies. Car manufacturers who are not professional in this field want to carry out research and development in this field. R&D and production will face many more difficulties.
