Cariad, the software subsidiary of Volkswagen Group, is showing signs of recovery after years of delays and heavy losses, its Chief Executive Peter Bosch said in an interview published by Automobilwoche on Friday.
The unit has faced scrutiny over its role in setbacks for key models such as the electric Porsche Macan and Audi Q6 E-Tron. Over the past three years, Cariad reported operating losses exceeding $7.5 billion, while generating revenues of nearly $3.5 billion.
Bosch, who took over as CEO in 2023 after previously leading Bentley, said improvements are visible in vehicle performance and internal operations. “The cars are here, costs have been significantly reduced, and we have broken new technological ground,” Bosch said.
Early customers of the Volkswagen ID.3 and ID.4 models had criticized the infotainment systems as sluggish and unreliable. Bosch acknowledged the issues but said the software has since improved, and that Cariad has made progress in overcoming its earlier challenges.
Under Bosch’s leadership, Cariad is shifting toward greater in-house development. The company plans to cut 1,600 jobs this year while hiring new software engineers to increase internal control over vehicle code. “Our employees know, write, understand, and change the code — even via over-the-air updates,” Bosch said.
The company has also moved away from a uniform software approach across global markets. In China, development is handled locally to meet regulatory and consumer demands, while in North America, Cariad is leveraging staff from its joint venture with California-based EV maker Rivian.
Currently, the division is focusing on cloud infrastructure, advanced driver assistance systems (ADAS), and infotainment technologies. Bosch said the company has achieved lower per-vehicle cloud costs than competitors and is pursuing partnerships to accelerate development in automated driving.
While Cariad’s Level 4 autonomous driving platform has been delayed until later in the decade, the unit is working with firms including China’s Xpeng and Horizon Robotics, as well as Rivian and Bosch, to develop other highly automated systems.