Volkswagen to invest even more in software and EVs

The German Volkswagen Group plans to expand its software investments, digital services, and electromobility investments. That’s the result of a supervisory board meeting when it weighed investments for the next five years.

Related discussions were delayed as the IT development (grouped under the Cariad daughter) ran into development problems, and the first EV products encountered numerous bugs with their software.

Clear roadmap

The board plans a “clear roadmap for software and platforms” to expand digitization and electromobility, the board said on Friday, without releasing the final details. At the same time, the board also wants to improve profitability, with plans to ensure activities are focused “on the most attractive profit pools”.

The trouble with software development led chief executive Oliver Blume to postpone these planning discussions, usually held in November. Now, he plans to revamp the strategy of his predecessor Herbert Diess and set out more binding targets.

Problem child Cariad

The delays at VW were partly due to its IT subsidiary Cariad, which is developing its own automotive software. The VW Group daughter had been subject to expensive delays. Opposition also came from influential subsidiaries Audi and Porsche concerning the approach in the past.

The premium and sports car manufacturers were seriously annoyed by the fact that software problems were delaying the launch of their important e-tron Q6 and Macan EVs, based on the same platform, and relying on software to be developed and delivered partly by Cariad.

The carmaker said that VW is now set to present its investment and model plans along with its 2022 annual figures on March 14. All eyes are on the most important project in the medium term, the fully digital Trinity model. The latter has also suffered from delays because of digital problems, but also because the new top brass wasn’t entirely happy with the design, and there were discussions of where the new VW flagship would be built.

The combination of all these problems has caused a severe delay in the development of the Trinity and the new platform that’s underpinning it, forcing group brands like Porsche to go for an evolved PPE platform instead and driving other brands to make more extended use of the revised MBE electric platform for some of their new EVs that were initially planned on a new EV platform.

New board member

The supervisory board members also nominated a new member, Gunter Horvath. He is to take over the position of Louise Kiesling, who died in December. Kiesling was the niece of former VW patriarch Ferdinand Piëch. She was seen as a mediator between the Porsche and Piëch families, both majority shareholders in the group via the Porsche SE holding company.