By joining forces with a young American company to build its next-generation electric cars, the veteran Volkswagen, caught in the biggest crisis in its history, tries everything for everything. As negotiations resume Monday in northern Germany over a savings plan that could lead to thousands of layoffs, the future of Europe’s leading manufacturer may be being defined in California.
It is in the Los Angeles region that the automotive start-up Rivian has been established, with which the German giant sealed a partnership worth almost six billion euros in November. The young company, founded in 2009, is now in charge of building the electronic architecture of the group’s future electric models in the hope of erasing the setbacks suffered by Volkswagen in recent years.
A “high risk” bet, according to Ferdinand Düdenhöffer, an expert at the Center for Automotive Research (CAR), since Rivian, specialized in the manufacture of fully electric trucks, vans and SUVs, is much less consolidated than the American Tesla or the large companies. technological. Companies that many manufacturers work with. Allying with giants like Google or Microsoft “allows us to avoid risks” in the development of operating systems, which have become essential for the automobile of the future, recalls the expert.
Ten car brands
Whether for the primary functions of cars, for applications or even for assisted driving, manufacturers are facing the rise of “software”, an increasingly sophisticated integrated software, whose importance takes precedence over that of “hardware”, car mechanics. They had to make a decision: completely delegate software development – as Swedish Volvo did – or hire hundreds of developers to produce an in-house operating system, as Volkswagen’s dedicated IT subsidiary Cariad promised.
The majority preferred a solution between the two, establishing partnerships, as Mercedes announced with Google and Nvidia. The stakes are high: the failure of Cariad, accused of delays and defects in its software, cost former Volkswagen CEO Herbert Diess his job, fired in 2022, and considerable sums for the group, “after Dudenhöffer, which speaks of a “billion-dollar chasm.” The former boss believed “that we could transform a classic car manufacturer into a technological and IT giant,” summarizes the analyst.
Nothing could be more complicated for an almost century-old group like Volkswagen, whose internal organization is complex, with ten car brands that have each developed on their own, explains Andreas Nienhaus of the research company Oliver Wyman. This “inertia” slows down innovation, he adds. Hence the radical change in strategy of Oliver Blume, Diess’ successor at the head of the group.
To demonstrate to the German partner what it is capable of, Rivian installed its own computer system in an electric Audi this summer, in just twelve weeks, reports Der Spiegel magazine. “This is the time it would have taken us here, in the group, to organize a meeting with all the interested people,” laughs an informant quoted by the weekly.
$5.8 billion by 2027
A reliable and simplified electronic architecture, the promises of the young company make the heirs of the creators of the Golf dream. The joint venture wants to market next-generation vehicles from 2026. Volkswagen has committed to investing up to $5.8 billion until 2027. Time is running out for Volkswagen, which is also hurt by its production costs in Germany and a decline of their market shares in China. in the face of competition from young electrical brands, in a context of slowing global demand.
What about Cariad and its more than 5,500 employees in Europe? The subsidiary “will continue to play an important role,” the CEO promised. Its administrative staff was reduced by 30% this year. Some 150 Cariad engineers will be assigned to the new joint venture between Volkswagen and Rivian, a Cariad spokesperson told AFP. Certain services remain your responsibility, such as the development of infotainment or automated driving in collaboration with suppliers such as Bosch and Mobile-Eye.
In China, 300 Cariad China developers will continue to develop Chinese software architecture in collaboration with XPeng, the group’s local partner.
Source: BFM TV
