• Cariad, Volkswagen Group’s software unit, is on the right track.
• CEO Peter Bosch said costs have been significantly reduced.

Cariad, Volkswagen Group’s troubled software division, is in a better shape now than it was last year, CEO Peter Bosch said in an interview with Automobilwoche. 

The German automaker’s software unit was famously responsible for the delayed launch of the all-electric Porsche Macan and Audi Q6 E-Tron. In the previous three years, it racked up operating losses of over $7.5 billion while revenue was nearly $3.5 billion. 

For early Volkswagen ID.3 and ID.4 owners, Cariad is probably best known for the laggy and buggy infotainment systems. However, the software in those cars is now much better than it was originally, and Cariad as a whole has put its problems behind it, according to its CEO.

“When you take on a task that everyone knows is difficult, you don’t do it expecting constant applause,” Peter Bosch said for Automobilwoche. “But we delivered. The cars are here, costs have been significantly reduced, and we have broken new technological ground.”

Before being appointed CEO of Cariad in 2023, Bosch was Bentley’s CEO. He immediately started looking for ways to cut costs and, more importantly, reduce the division’s overreliance on external suppliers.

This year, Cariad will lay off 1,600 people, but at the same time, the Volkswagen Group unit will hire new talent to take control of as much code as possible. “In software, with its fast development cycles, we have to work directly on the code,” Bosch said. “Our employees know, write, understand, and change the code — even via over-the-air updates.”

Photo by: Cariad

Another big change was to end the one-size-fits-all approach to vehicle software. In China, the development, design, and production are all local to meet consumer expectations and regulatory demands. In North America, Cariad is mostly staffed by Rivian personnel, as part of Volkswagen Group’s joint venture with the California EV startup.

For now, Cariad is focusing on cloud infrastructure, advanced driver assistance systems (ADAS) and infotainment. This approach led to significant cost savings. “We are now significantly cheaper per vehicle in the cloud than the competition,” Bosch said.

More advanced automated driving systems are also in the works, as well as shorter development cycles. While the division’s Level 4-capable autonomous driving software platform has been pushed back to the end of the decade, Cariad has partnered with several companies around the world to fast-track other highly automated driving systems, including China’s Xpeng and Horizon Robotics, as well as Rivian and Bosch.