How VW wants to turn Cariad into a software force

“We underestimated the complexity, and the failure was necessary.” It is an unusual way to open a new corporate site. Yet that sentence set the tone at the official inauguration of Cariad’s new Automotive Software Campus in Berlin before CEO Peter Bosch had even taken the stage. This was not a simple celebration of future ambition. It was also an admission that Volkswagen’s software subsidiary is trying to rebuild credibility after years in which software projects repeatedly exposed the industrial difficulty of turning a traditional multi-brand carmaker into a software-led organisation.

Berlin is meant to show what Cariad has learned. The new campus brings together work on artificial intelligence, automated driving, infotainment, cloud, data and vehicle dynamics. These are not isolated technology fields. For Volkswagen, they are the areas that will determine whether the group can build software capabilities once, scale them across brands and markets, and bring them reliably into vehicles.

How Agentic AI Is Changing Vehicle Development

Agentic AI could speed up requirements, testing, validation and SDV workflows. But automotive experts warn that without APIs, virtual ECUs, clean data and human expertise, the hype will not scale.

Dr. Martin Large

Why Cariad had to start again

Cariad CEO Peter Bosch addressed the company’s difficult past unusually directly at the opening. He said the organisation had come from “quite far down”, referring to a period in which software for new vehicles was delayed, competitiveness targets were missed, quality fell short of customer expectations and costs continued to rise.

That history matters because Cariad was originally intended to be Volkswagen Group’s central response to Tesla, Chinese competitors and the growing digitalisation of the car. The subsidiary was supposed to pool software expertise, create common architectures and help the group’s brands move towards software-defined vehicles. In practice, however, Cariad became associated with delayed launches, complex responsibilities and expectations that the organisation could not meet at the required speed.

The difficulties became particularly visible in major vehicle projects. Software issues affected the timing of the Premium Platform Electric used by Audi and Porsche models such as the Q6 e-tron and Macan. Questions also emerged around the Scalable Systems Platform and whether software problems could slow future model launches. Volkswagen rejected some reports and pointed to adjustments in product cycles, but the perception remained: Cariad had become a symbol of how hard it is for a legacy automotive group to adapt to software-driven development logic.

“Chiplets enable a shift to a true top-down design approach”

Chiplets could reshape how automotive electronics platforms are designed and scaled. Bosch’s Michael Schaffert explains where the technology creates value, and what still limits industrial adoption.

Benjamin Müller

What the Berlin campus is meant to change

Bosch did not present the new Berlin campus as a real-estate project. He described it as the result of a deeper transformation. Cariad has changed structures, redistributed responsibilities and created working conditions intended to resemble those of a global technology company more closely. According to Bosch, the company has also halved financial outflows and tripled its number of patents.

The message is that Cariad should again be seen as a reliable technology partner for Volkswagen Group’s brands. Bosch said the number of vehicle models for which Cariad delivers software has more than doubled, with similar development steps expected in the coming years.

The core of the new approach is platform capability. Volkswagen wants to develop key technologies more strongly in-house and then use them across brands and markets. Bosch named four major technology platforms: automated driving, infotainment, global cloud and vehicle dynamics. Berlin is part of a global development network that also includes California and China.

How Berlin brings software closer to the car

The day-to-day meaning of this reset was visible beyond the stage. Berlin is now part of a global software network that combines sites close to Volkswagen’s brands with international technology hubs. In Germany, teams work in Stuttgart, Ingolstadt, Wolfsburg and Kassel. Further development centres are located in the United States and China, including Beijing, Shanghai and Hefei.

The Berlin site has a defined role within that network. More than 1,000 employees work on the campus, most of them in technical roles. Cariad deliberately describes the location as an interface between the automotive industry and technology. That is why the teams include not only software developers but also engineers from other disciplines.

This matters because automotive software cannot be separated from the vehicle. The building includes around 1,000 square metres of integration space where software is brought into vehicles, tested and developed further. Additional laboratories are located on the upper floors. For Cariad, this practical link is central. The problems of the past showed that vehicle software cannot be developed in isolation from hardware, E/E architectures, brand requirements and regional markets.

Renault and Thales connect tactical mobility with AI

Renault and Thales have unveiled 4 Troop, a hybrid 4x4 concept that links civil vehicle platforms with secure communications, AI-supported command functions, drone integration, V2L power supply and scalable production for faster operational deployment by modern land forces.

Benjamin Müller

Technologically, Cariad now works across several architectures. Its scalable technologies for automated driving, infotainment, cloud and vehicle dynamics are intended for the group’s volume architecture, the premium software stack for Audi, Porsche and eventually Bentley, and the China Electronic Architecture. In future, individual technologies could also feed into partner architectures, including the environment around the Volkswagen and Rivian partnership.

Where Volkswagen sees the software battleground

Volkswagen Group CEO and Cariad Supervisory Board Chairman Oliver Blume placed the campus in a broader strategic context. He said the car is becoming a software-defined product and, over time, an AI-defined product. Software, he stressed, will decide the success of Volkswagen’s products, with the digital experience becoming a decisive purchasing factor.

Blume also acknowledged that Volkswagen had faced criticism over functionality, delivery capability, costs and quality. Over the past three years, he said, Cariad had been stabilised, refocused and streamlined.

He now describes the subsidiary as a modern professional technology company for cross-brand technologies. These include driving systems, automated driving, infotainment, cloud, data and backend services. The strategic logic is to develop software once and use it many times across brands, segments and regions. That is the only way common architectures can generate speed.

This is also where the Berlin campus becomes strategically important. It is meant to support cross-brand software reuse while keeping enough proximity to vehicles, markets and brands to avoid the abstraction problems that slowed earlier software projects.

US Automotive Wire Harness & EDS Conference

20-21 October 2026 | The Henry Hotel, Dearborn, Michigan

Why AI becomes Cariad’s organising principle

The opening in Berlin placed far greater emphasis on artificial intelligence than many previous Cariad appearances. Bosch described Cariad as a “Triple AI Company”. By this he means three dimensions: AI in products, AI in working processes and AI as a tool for every person in the company.

In the vehicle, artificial intelligence is expected to shape driver assistance, automated driving and interaction between humans and cars. At the start of the event, Bosch described the future vehicle as a system that can perceive, speak and drive itself. That vision will require not only stronger algorithms but also reliable integration into safety-critical automotive systems.

AI is also meant to help Cariad master development complexity. The company is already working with new data and integration platforms to plan and test variants, functions, markets and software versions more effectively. An internal system known as the Common Data Model is intended to create transparency and shorten feedback loops.

The ambition fits a wider shift across Volkswagen. AI is meant to become both a product technology and an industrial efficiency lever. For Cariad, the difficult part will be turning this into stable engineering practice. In software development, AI agents in development workflows only create value if specifications, validation, traceability and process discipline are strong enough to support them.

“The strongest enabler is cross-brand governance”

As SDV architectures increase system complexity, modularisation becomes a key lever for cost, scalability and integration. Volkswagen’s Melanie Sohnemann explains how standardised connector systems can enable cross-brand reuse and accelerate SDV rollout.

Benjamin Müller

How partnerships reshape Cariad’s role

The Berlin reset does not mean Volkswagen is returning to the old ambition of developing everything itself. On the contrary, the group’s recent strategy shows a clearer distinction between technologies it wants to control internally and areas where partnerships are more efficient.

In Western markets, Volkswagen is working with Rivian on a new zonal E/E architecture. In China, the group is cooperating with Xpeng. Both partnerships signal a more pragmatic approach to the software-defined vehicle. They also raise a central question: if important architectures come partly from partners, which parts of the software stack must Volkswagen master itself?

Blume expressed the answer carefully. Volkswagen wants to control key technologies, but it will use partnerships where they make sense. The decisive point is that core competencies remain within the company.

This balance is crucial for Cariad’s future. The company no longer has to be the sole source of every software component. But it does have to define, integrate and govern the software capabilities that determine Volkswagen’s long-term differentiation. That includes architecture, data, cloud, automated driving, in-vehicle experience and the ability to industrialise software across brands.

What Volkswagen wants from policymakers

Blume also used the opening to address political conditions. In the global race for technology and digital sovereignty, he argued, Europe cannot afford to lose time. He called for more modern regulatory frameworks, more flexible type approval for rapid software updates, stronger support for open source, innovation-friendly cloud regulation and practical data protection rules.

The message was clear: automotive software is no longer only a corporate transformation topic. It is also a question of industrial policy. If Europe wants digital sovereignty in the vehicle, regulation must enable faster software cycles while maintaining safety, security and trust.

Julia Klöckner, President of the Bundestag, also visited the campus as part of the opening. In her speech, she stressed that change requires an open and innovation-friendly society, as well as political conditions that do not obstruct companies but give them the framework they need. She also addressed the employees directly. The “Caridians”, as Cariad’s employees call themselves internally, would have to show that they believe in change, radiate enthusiasm for technology and translate good ideas into applications that reach people in everyday life.

Stellantis and Microsoft Deepen AI Partnership

Stellantis and Microsoft are expanding their collaboration through a five-year partnership focused on AI, cloud and cybersecurity across vehicle development, digital services and enterprise IT.

Benjamin Müller

Why the next test is product delivery

The Automotive Software Campus in Berlin is therefore not the end point of Cariad’s restart. It is the next test. The organisation now has to prove that the changes are not only structural but also visible in products. It must deliver faster, reduce complexity and secure the technological independence that Volkswagen claims as essential for its future.

Bosch put the focus on the workforce. Employees had changed structures, taken responsibility and explored new ways of working, he said. No job profile looked the same as it did three years ago, and the organisation was improving every day.

The decisive question is whether Cariad can turn the lessons of its troubled past into a new development logic. The sentence about underestimated complexity and necessary failure was a remarkably candid beginning. Now the software subsidiary has to show that this insight can lead to reliable vehicles, scalable platforms and software that arrives when customers and brands need it.