June 18, 2019 12:00 PM, EDT

VW Steps Up Software Push With Own Operating System

VWAlex Kraus/Bloomberg News

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Volkswagen AG is stepping up the pace of its digital transformation with a plan to pool some 5,000 digital experts into a single unit that will develop “vw.os,” a uniform software operating system across all new models.

CEO Herbert Diess has mapped out a “massive expansion” in software and digital investments, and the manufacturer earlier this year started the rollout of the industry’s biggest automotive cloud with strategic partner Microsoft Corp. With the creation of the Car.Software unit, Volkswagen’s in-house development will rise to at least 60% by 2025 from less than 10% now, the carmaker said June 18.


“We are platform professionals for hardware and are now transferring this competence to software development,” Christian Senger, head of digital car and services for the VW brand, said in a statement. “We will develop software with uniform basic functions for all group brands, which will allow us to drastically reduce complexity.”

The first vehicle based on vw.os will be the electric ID.3, which will start deliveries next year. From 2025, all new models will use the system, VW said. Currently, as many as 70 control units with operating software from 200 different suppliers need to be integrated into VW brand vehicles, while the group uses different systems with similar functions, such as for infotainment and navigation.

CEO Diess is undertaking an overhaul to streamline VW’s carmaking empire that stretches from VW brand small cars to top-end Bugattis. Boosting software operations is a critical part of Volkswagen’s strategy through 2025 to tackle a seismic industry shift toward electric and self-driving vehicles.