Volkswagen is looking for a software payment strategy

Oliver Blume, the group’s new boss, is trying to review the group’s software development strategy to limit bugs that have cost the German group money and time for nearly three years.

An ID.4 with a billing planning system problem, an ID.3 whose launch was delayed due to bugs, Volkswagen’s turn to become a software giant looks like a path with pitfalls. A path that, among other things, led to the departure of Herbert Diess, the former boss of the group, last summer. And it obviously leads to an overhaul of the German giant’s software strategy.

Is the launch of the next software platform delayed?

Since his arrival in September at the head of the Volkswagen empire, the new chairman of the management board of VW AG AG, Oliver Blume, has left his mark and seems less in a hurry than his predecessor to compete with the American Tesla in the race for integrated software, the grail cars of the future. Although software remains a new important vehicle in the 21st century.

This Tuesday, Oliver Blume admitted at a round table with journalists that Volkswagen will need to refocus the various software generations on “what has already been done”, seemingly half-heartedly confirming the postponement of a new centralized software platform promised for 2026.

This postponement was noted in the specialized press for several weeks. The boss of the first European manufacturer can say more about his strategy in meetings scheduled for Thursday and Friday within the group. Earlier this month, Volkswagen cast doubt on its plan to build a new factory dedicated to electric vehicles in the group’s industrial cradle in Wolfsburg (north), preferring to prioritize the modernization of the existing site.

“A change of strategy”

“Since Blume’s arrival, the legends of his predecessor Herbert Diess have disappeared,” said the business daily Handelsblatt. Under the direction of Herbert Diess, Volkswagen is the first traditional manufacturer that wants to imitate Tesla’s innovative choices, betting on a centralized electronic architecture for its vehicles, instead of a lot of software – for the lighting of headlights, cloud connection, wind. conditioning, GPS, etc. – not talking to each other. But malfunctions in the first software onboard the Golf 8, ID 3 and 4 electric models, which led to car recalls, were one of the reasons for the dismissal of the Austrian boss this summer.

The acquisition of Oliver Blume marks a “real change of strategy”, automotive analyst Jürgen Pieper assured AFP.

He points out the group’s “error” in thinking that they can build, alone and very quickly, such a complex system, “while car manufacturers are not computer developers”, he explains.

“They need partners with suppliers in the automotive industry,” he said.

Output a finished and safe product

The likely postponement of the new integrated software and the question of the new Wolsburg plant – a two billion euro project – are related: the site is to produce the new Trinity model, loved by Herbert Diess, an electric sedan running on the new software platform , with very fast charging speed and fully automated driving (called level 4).

If Volkswagen chooses to extend the current mid-level software, and push back the Trinity project, the construction of a new production site no longer appears to be an emergency. The group underestimated the “complexity” of developing a software that runs across its various brands, from consumer vehicles to high-end cars from Porsche or Audi, experts say.

In addition, the development costs, entrusted to Cariad, VW’s software subsidiary, will exceed forecasts, according to some industry experts, who estimate them at several billion euros.

The challenge of proprietary software systems

“It seems that Oliver Blume is not satisfied with releasing software that already has problems and is instead determined to release a finished product when it is safer,” said Matthias Schmidt, analyst at AutomotiveResearch.

“It may cause short-term losses in the market, but Blume is probably more concerned about the long-term,” he added.

The European leader does not give up its desire to develop its own software and should postpone its entry into service until the end of the decade, reports Jürgen Pieper.

The profits from software once developed solo are juicy: collecting traffic data and reselling the technology to OEMs can justify joining the race. Building your own software system becomes an issue of independence vis-à-vis tech giants, such as Microsoft or Apple. But the doyens of the automotive industry, the European manufacturers, “have the most to lose”, in the development of this very expensive and risky technology, warns Matthias Schmidt.