Volkswagen, the automotive titan from Germany, appears to be stuck in a quagmire with its electric vehicle software development. As the world accelerates towards an electric future, VW seems to be stuck in the pits, grappling with software snags and production delays.
According to reliable reports, the company has chosen to delay its fresh-out-of-the-oven 1.2 software. This new software was anticipated to make its grand appearance in the forthcoming Porsche Macan EV and Audi Q6 e-tron. But alas, enthusiasts might have to wait another 16-18 weeks. Hold that sigh, there’s more bad news – the ambitious 2.0 platform is heading back to the drawing board for a complete overhaul accompanied by a loss of 2,000 jobs.
VW’s much-touted SSP platform, hailed as the “single future backbone,” is also witnessing postponements. The SSP platform was Volkswagen’s bid to trim expenses and achieve profit margins that rivaled traditional gasoline vehicles. Now, it seems the timeline for its realization has been stretched a bit further.
But the story doesn’t end with just software delays. VW’s software division, Cariad, seems to be caught in a whirlwind of operational challenges. Established in 2020 to race against electric giant Tesla in the software realm, Cariad has been under the spotlight for all the wrong reasons. Its turbulent journey is marked by delayed product launches and software glitches. Some insiders even link the unit’s tribulations to the exit of former VW Group CEO, Herbert Diess.
Oliver Blume, the new captain steering the VW ship since last September, has been making efforts to smoothen the waters. In a bid to revive the software unit, the company roped in Sanjay Lal, an ex-Tesla and Rivian honcho. Lal’s mandate? To spearhead a new software design hub within Cariad. The fruits of this hub are expected to grace two EVs, one from Audi and another from Volkswagen, and eventually cascade to all VW marques.
On the corporate chessboard, VW also ushered in Peter Bosch to the CEO chair at Cariad. Bosch, with a manufacturing pedigree from Bentley, now holds the dual role of Cariad’s chief and VW’s envoy on the board at Scout Motors.
Yet, amidst all these strategic moves, numbers paint a telling story. Despite churning out 531,500 EVs in the initial three-quarters of the year, a commendable 45% surge year-on-year, Volkswagen is losing grip in pivotal markets. A stark drop in EV orders in Europe, from 300,000 last year to a mere 150,000 now, accentuates the challenge. Europe, which gulped 61% of VW’s EVs till September, seems to be drifting away.
While VW’s marketing and sales head, Hildegard Wortmann, points to an underwhelming market trend, competitors like Tesla and Chinese EV manufacturers, such as BYD, beg to differ. For instance, Tesla’s Model Y didn’t just outsell other EVs in Europe this September; it zoomed past all cars, electric or gasoline. Moreover, it’s racing to clinch the title of the world’s best-selling vehicle this year.
As the EV landscape undergoes a tectonic shift, Volkswagen needs to find its mojo. And quickly. After all, in the automotive world, being in the rearview mirror is never a good thing.