I’ve had this Volkswagen interview open for weeks to write something about it. To be honest, I might have forgotten what I initially intended to write. I finally got to it today and spent a while trying to figure out what’s useful from that interview at this point, especially considering the interview is nearly 10 months old. Well, one thing to highlight is the overall point of the piece: Volkswagen intends to in-house software much, much more than it ever has, going from developing ~10% of its own software to developing 60% or more of it by 2025.
The article linked above is a Volkswagen interview with Christian Senger, member of the Brand Board of Management of Volkswagen and also the person responsible for Digital Car & Services. One focus of the piece was Volkswagen’s then-new Car.Software unit. The general message: Volkswagen is going to rock on software and set itself apart from the crowd on this important matter.
Well, unfortunately, there have been some headlines lately about Volkswagen’s software for its upcoming ID.3 and they haven’t been positive. That’s not to say Volkswagen’s Car.Software unit won’t get off the ground and prove to be an impressive arm of the Volkswagen giant. However, there’s no way to say that the recent news inspires confidence about the software abilities and future of the German automaker.
I decided the best way to look at Volkswagen’s comments on this topic and the reporting regarding the challenges the company is facing right now is through a combination of quotations from the Volkswagen article from 10 months ago and quotations from the fresh reporting on that matter. Let’s roll into those.
June 2019 Volkswagen Car.Software Comments
From the Volkswagen story about Volkswagen: “The new ‘Car.Software’ unit will be responsible for essential parts of software development for vehicles and cloud platforms in all brands and regions.”
The remaining quotes in this section come from Christian Senger. They are each responses to different interview questions. (It’s not clear who conducted the interview, but it was presumably a PR person at Volkswagen.)
“The crosslinking of electrics and electronics is extremely complex and costly. And the required input continues to rise because the demands on the digital performance of our cars are also increasing. That’s why we need to manage complexity better and become more efficient. It also means developing much more software ourselves in the future and thus reducing the cost.”
“The main burden today is the interconnectedness of hardware and software in the car. Just one example: currently, up to 70 control units operating with software from 200 different suppliers must be networked in vehicles of the Volkswagen brand. We devote a large part of our energy to technical integration and rely very much on the developments of third parties. This is not a good model for the future. We need to be the ones who develop the software, set the standards and make them available to all brands and suppliers.”
“Today, our share [self-developed software as a portion of all software in Volkswagen Group vehicles] is less than 10 percent. That is clearly too small. In the Volkswagen Group, we want to achieve a share in software development of more than 60 percent by 2025.”
“Volkswagen has already taken an important step. We have separated organisationally the development of hardware and software in the company, and incidentally we’re the first car manufacturer to do this. This is important because software follows much faster development cycles. We’re continuing on this path. We want to form an agile ‘Car.Software’ unit and bring together more than 5,000 experts and top talent by 2025. The experts will focus completely on vehicle digitization and development of vehicle-related services.”
“We will bring together experts from brands and companies within the Group, but we want to focus much more on attracting top professionals from the IT and tech industry. Strategic investments and acquisitions are also an option.”
Question from Volkswagen interviewer: “What do you see as a future priority for software development?” Christian Senger: “A clear answer: safeguarding the timely production start of our cars. In general, we will be measured by our ability to always deliver reliably.”
Whether they had a sense of what might become a major issue or not, those comments are a bit unfortunate based on recent news. Furthermore, the goal of collecting top talent appears to be one of the core breaking points so far. Of course, these conclusions are based on very limited reporting of the situation at Volkswagen. Nonetheless, the quotes to follow are damning.
2020 Reality — Software is Not Working
The update this week comes from a German news outlet, Süddeutsche Zeitung, whose headline in an English translation from German reads, “This is no longer a laugh.” That probably should be “This is no longer a laughing matter,” but the first version is how Google translates it. The remaining translations also come from Google.
Just real quickly before jumping into those, though, note that the article starts off by talking about a “top secret” meeting between the boards of Volkswagen Group and Daimler about jointly developing an automobile operating system. The reason Volkswagen is steering toward this route, reportedly, is because its own efforts at software development are failing. “And at the moment Tesla, the competition from the USA, is miles away from the Germans,” Stefan Mayr and Angelika Slavik, the journalists behind the article, write. “If you teamed up, you could save costs, but above all you could pool competencies: Because software development is tedious, small-scale, takes a lot of time and requires a lot of programmers, and both of these are far too little for German automakers.”
An unnamed member of Volkswagen Group states: “This is no longer a laugh. … The car is far from ready for the market.”
“It’s an absolute disaster. We just can’t get people.”
An official response from a Volkswagen representative: “It’s not going great.”
Stefan Mayr and Angelika Slavik: “In fact, as an employer, VW struggles to get young software experts excited. Programmers are desperately sought in all industries, many of these coveted young people decide against the auto industry. And sometimes important managers are also lost: IT boss Martin Hofmann leaves VW at the end of the month, he was responsible for IT across the Group and thus also plays a key role in the development of e-mobility.”
Some planned features in the Volkswagen ID.3 will likely be delayed as a result of these problems, not available in the car at launch. One of the first things that pops to mind for me here is that this was actually also the case with the Tesla Model 3. (I’m not sure if it’s on the same level, but we should find out this year.) When Model 3 deliveries began, several features available through the touchscreen still weren’t active. Early owners had to wait for Tesla to turn them on. There were also quite a few software glitches. However, for various reasons (the monumental nature of the Model 3 and complete lack of competition, the known Silicon Valley approach of Tesla, its history of beta features and ongoing over-the-air software updates, and probably a forgiving market response for those reasons), the Volkswagen story is sure to be seen as very different. (Of course, as noted above, the scale of the problem might actually fundamentally different).
People expect Volkswagen to ship its final product from day 1 It doesn’t have any history with over-the-air software updates and improving cars after sale. It’s not normal, expected, or “acceptable” for Volkswagen to slowly roll out features that were expected in the vehicle from launch. Furthermore, there is much criticism of non-Tesla automakers regarding software, and this will surely feed into that narrative. There’s now more evidence for people interested in highlighting a big divergence in software capabilities, and I doubt many others (if any of them) will note that the Tesla Model 3 also hit the market with incomplete features/capabilities. Perhaps that’s how it should be, though. Perhaps the difference in the challenges and the lacking features is an order of magnitude difference. Perhaps it’s more than that. We’ll have to wait until the first ID.3 buyers get their cars to see what’s going on, and perhaps we’ll have to wait many months longer to see how the car improves once Volkswagen gets its software act together.
Good luck to Volkswagen. I think most of us want to see the new ID line be a great success, and the world certainly needs it.
If you have more insight or at least some uncontainable thoughts about Volkswagen and its software, chime in down in the comments. Something tells me there is going to be a lively discussion on this one.
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