Volkswagen invests billions in its own software development

VW plans to expand its car software program. The group has invested more than seven billion euros in this department, which is expected to grow from 5,000 employees to 10,000 by 2025, says board member Christian Senger.

Volkswagen ID.3 – the production of ID.3 EV is delayed until September due to software problems – (photo by VW)

Regardless of the quarrels surrounding CEO Herbert Diess, Volkswagen is rapidly expanding its own business unit for the production of software for cars. “Digitization is setting the pace for Volkswagen. The plan is set and we are moving forward,” said Christian Senger, member of the board of the Volkswagen brand. “In the next five years, we will invest more than seven billion euros in the tasks and projects for car software production. It is a powerful undertaking.”

In addition to the general crisis in the automotive industry – also due to the corona pandemic – the structural change towards electromobility and more digitalization is currently weighing on the working atmosphere at Volkswagen.

One consequence of this is the dispute over Diess, who almost lost his office in a dispute with the Supervisory Board this week. He had to give up his role as head of the Volkswagen core brand, but he remains the CEO.

This is driving the digitalization and electrification of the Volkswagen models. Part of this strategy is the establishment of the car software organization. It is expected to grow from around 5,000 to 10,000 employees by 2025 and in the future will primarily produce the digital operating system for all Volkswagen cars.

The main reason for the expansion is competitor Tesla

The new business unit is to be set up internationally. “Around 50 percent of the employees will work in Europe, the majority of them in Germany,” said Senger. “Around a third work in China. We will have additional units in North America, Israel and India. So we are well positioned.”

VW ID.3 interior – (photo by VW)

The US competitor Tesla is the model for setting up its own software production at Volkswagen and its own cloud for the digital data of the vehicles.

“From 2025, all new model generations should run on our own operating system. That means many millions of new vehicles per year. That is our strength,” said Senger. “But many of the progressive approaches, such as those used by Tesla, are still not transferable to our company one-to-one. The colleagues from California are again the reference there. That’s where we start, we want to change that in the next few years.”

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