Volkswagen plans to end its automated driving development partnership with Bosch and Cariad as part of corporate cost-cutting measures, according to a recent media report. The collaboration, which began in 2022, was focused on creating software for driver assistance and autonomous driving functions across Volkswagen's portfolio of vehicle brands.
Bosch and Cariad issued a joint statement acknowledging their long-standing cooperation and reiterating that they routinely evaluate such development partnerships. In the companies' words:
"As a matter of principle, we regularly review our development partnership and continuously assess whether it aligns with our strategic and technological goals as well as current market developments."
The statement also noted that the companies do not comment on confidential partner discussions. The report cited internal assessments that concluded the project had not met expectations, despite an investment of approximately c1.5 billion ($1.71 billion). Those assessments reportedly found the developed technology was not yet competitive.
Contractual arrangements govern the partnership's end, and the final termination is not expected to occur before Monday, according to the report. Volkswagen is said to be moving to source both hardware and software for automated driving systems from a different supplier. Company planning is reportedly underway to select a replacement partner, with a new contract targeted by September.
The collaboration between Bosch and Volkswagen's software unit Cariad had been positioned to scale automated driving capabilities to the global mass market. With the partnership set to be wound down under existing contractual terms, Volkswagen is pivoting to secure alternative suppliers to continue development of automated driving systems.
Summary: Volkswagen will terminate the automated driving partnership with Bosch and Cariad after internal reviews judged the project underperforming relative to expectations. The companies reaffirmed routine partnership reviews. Volkswagen is choosing a new supplier for both hardware and software and expects to formalize a replacement contract by September; termination will follow contractual timelines and is not expected to conclude before Monday.
Key points:
- The Bosch-Cariad collaboration began in 2022 to develop driver-assistance and autonomous software for Volkswagen brands.
- Internal evaluations reportedly concluded the technology was not yet competitive after roughly c1.5 billion ($1.71 billion) in investment.
- Volkswagen is seeking a new partner for hardware and software, with a replacement contract planned by September.
Risks and uncertainties:
- Timing: The partnership will end according to contractual terms, and final termination is not expected before Monday, creating short-term timing uncertainty.
- Supplier transition: Volkswagen's shift to a new supplier for automated driving hardware and software introduces execution risk for automotive and supplier sectors.
- Technology competitiveness: Internal findings that the technology was not yet competitive pose ongoing development and market-readiness risk for automated driving initiatives.