Volkswagen AG’s operating units have recently been in the news regarding their long-term software and product-software strategies. In this release, EkaLore looks at the implications as global vehicle markets change rapidly.
The increasing view of buying consumers is for software features, communications, and integration with digital lifestyles as keys to consumer acceptance of a vehicle platform. Vehicle manufacturers are struggling to overcome this radical change in behavior after nearly a century of pushing “bigger motors,” “car performance,” and “cool exteriors.” Vehicle platforms are now evaluated for their participation in digital lifestyles as enabling platforms for consumers – not simply as objects in possession.
VW and Ford Motor’s failure in their Argo AI joint venture resulted in its closing and taking write-downs in 2022. VW and Ford are still collaborating on the MEB Electric Vehicle (EV) platform. Plans for producing VW and Ford vehicles based on the MEB EV platform are ongoing, with more product line announcements scheduled over the next few years. VW’s subsequent concentration of effort and attention on the Cariad corporate entity included plans to send up to € 2.5B per year for various inter-sector revenues and as a way for VW to show its asset investment in Cariad. VW is now seeking better performance from Cariad and other efforts in software.
In March 2023, Cariad announced losses for FY2022 of Euro2.1B (USD$2.24B) on revenue of Euro800M. In 1Q2023, Cariad announced increases in (inter-unit license) revenue of 53% year-on-year with Euro0.4B in revenues even as investment costs increase. Forecasting full fiscal year results is difficult as VW’s platform product strategies and EV production remain questioned.
Cariad is also seeing expanded collaborations as the existing collaboration with Mobile Eye is extended by Porsche’s commitment to ADAS and navigation software/hardware from the Israeli enterprise. Cariad’s partnerships with China’s Horizon Robotics and traditional suppliers Bosch and Continental continue. Communications and processing platforms from Qualcomm are also in the plans. Partnerships also signal VW’s need to work with many different technology enterprises globally to meet key market needs in EU, China, India, and North American marketspaces.
To be continued. – You’ll find the next post in the series at www.ekalore.com/alien-invaders
Comments