In fight vs Tesla, VW partners part supplier Bosch to cooperate on car software

Volkswagen's software unit Cariad and automotive parts supplier Bosch are nearing an agreement to cooperate on automotive software, German newspapaer Handelsblatt reported, citing company sources. With its software efforts and new partnership, Volkswagen hopes to challenge Tesla and Alphabet in a field in which it has not traditionally been active.

The carmaker plans to invest a triple-digit million euro amount as part of the deal, the report added. With Cariad being high priority on Volkswagen's transformation agenda, CEO Herbert Diess took on responsibility for the unit on the group's management board this week as part of a reshuffle.

Diess believes software is the key future battleground of the automotive industry, ranging from operating systems to enable autonomous driving to software services that can be installed over the air. Cariad gets 2.5 billion euros ($2.8 billion) in funds from Volkswagen each year.

Separately, Volkswagen is also investing 159 billion euros out of which the automaker will it will dedicate about 89 billion euros primarily to electric mobility and digitization. The company will also focus on electrifying its European sites. Around 21 billion euros will be invested at its plants in Lower Saxony alone, most of which will be channelled into manufacturing sites and components facilities.

Volkswagen has also confirmed the electrification of its Wolfsburg plant through its Project Trinity. The company informed given the strong demand for electric vehicles, it also plans to re-equip the site for full production of the ID.3 from 2024. The Salzgitter site will be further expanded into a European battery hub.

The carmaker is also developing new electric PPE architecture that will be harnessed for two Porsche models. The company is also expecting there will be an approximate growth of 25 per cent in the sales of fully electric vehicles by 2026.

(with inputs from agencies)