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November 30, 2021 1:45 PM, EST

VW CEO Open to Third Parties Taking Stakes in Software Unit

VW CEO Open to Third Parties Taking Stakes in Software Unit A Volkswagen logo on an engine. (Daniel Acker/Bloomberg News)

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Volkswagen AG is open to external partners taking stakes in the manufacturer’s new software division as traditional automakers fight to catch up with Tesla Inc. on digital features.

Europe’s biggest carmaker could “in principle” offer equity stakes in its software unit called Cariad, CEO Herbert Diess said Nov. 30 in a video published on VW’s intranet.

While the company isn’t currently in concrete discussions on equity ties, VW is in talks with major suppliers such as Continental AG or Robert Bosch GmbH to cooperate on software, Diess said.

VW’s Cariad, set up as an agile, stand-alone business to pool the carmaker’s sprawling software efforts, has had a number of setbacks to get off the ground. After electrification, gaining speed on developing software architectures to offer digital and automated-driving features carmakers can charge extra for is fast becoming the next battleground.

Deep rivalries, differing timelines and antitrust regulation concerns have so far made tie-ups between automakers a rarity, even as the industry has identified opportunities to save on costs and time.

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