Volkswagen’s software division, Cariad, finds itself at the center of a brewing storm as the automaker struggles to keep up with industry giants Tesla and Chinese manufacturers in the race for autonomous vehicle technology. Created in 2020, Cariad aimed to bundle together Volkswagen Group’s software competencies and build a unified software platform for all of the Group’s brands. However, the division has failed to meet expectations, facing constant delays, skyrocketing costs, and suffering a $2 billion loss in 2022.
The software debacle led to the replacement of former Volkswagen Group CEO Herbert Diess, with new CEO Oliver Blume now under immense pressure to rectify the situation. According to reports by Business Insider and Reuters, Blume is expected to fire the entire management team at Cariad, including CEO Dirk Hilgenberg, CTO Lynn Longo, CFO Thomas Sedran, and CPO Rainer Zugehor. The shake-up comes as a response to software issues plaguing Volkswagen’s electric vehicles and concerns that the battery electric Porsche Macan and Audi Q6 may face years of delays due to Cariad’s underperformance.
Amid the turmoil, Audi development chief Oliver Hoffmann is reportedly leading an internal revolt over Cariad’s failures. Volkswagen Group has stated that it continues to stand by Cariad and is analyzing the situation closely, with decisions on personnel changes yet to be made. Blume is understood to be seeking a quick resolution to the leadership crisis and a clear path forward to stay competitive in the global market.
The pursuit of autonomous cars, which could provide automakers with lucrative upfront fees or monthly subscriptions, has driven the industry to invest heavily in self-driving technology. Tesla CEO Elon Musk has long predicted that autonomy will be the economic engine propelling his company towards a trillion-dollar valuation, and other car companies are eager to tap into that potential revenue stream.
As Volkswagen Group battles internal power struggles and external competition, the future of Cariad remains uncertain. The question remains: how many more heads will roll in the quest for autonomous vehicle technology, and will CEO Oliver Blume manage to steer Volkswagen back on course? Only time will tell, but for now, the race for autonomy continues.
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