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Automakers Rush to Take Back Their Software Codes

The future of tomorrow’s car markets is believed to be in software and automakers are now bringing programming skills in-house instead of being dependent on high-tech companies. [1]

The impact of innovative software has been shown by Tesla who can adjust everything from driveline performance to ride comfort through over-the-air software updates. Other companies, such as Uber and Waymo stake their business models on software prowess. Moreover, advanced safety systems and automated driving are propelling the transformation, as well as the demand for on-the-go connectivity needed for infotainment and e-commerce.

Tesla has been at the forefront of software development for its cars and now, traditional automotive OEMs are moving in this direction. Volkswagen will run their models on a new VW.os operating system by 2025 and last year they unified its information technology units into a division called Car.Software for in-house computer systems. The full version of VW.os is planned to debut in an Audi, and according to Audi’s CEO Markus Duesmann “[this is] starting the biggest revolution in the automotive industry….the strong positioning of the Car.Software organization as a cross-brand unit for software development at the Volkswagen Group is a key step into the future.” 

Daimler is investing in software-based features to raise the reputation of the Mercedes-Benz S-Class family as a technological trailblazer with the capacity of handling up to 50 in-car systems via over-the-air updates. The car can also identify drivers through facial recognition software and automatically adjust seating and steering settings.

Suppliers are also getting into the game. Bosch has established a new division called Cross-Domain Computing Solutions. Harald Kroeger, heading the Mobility Solutions business, said “It will help make cars ever more intelligent and provide drivers with a tangible benefit.” Hella has announced it will establish a Global Software House unit to coordinate its software activities and accelerate the development of software-based business models. “The future of the automobile is largely decided by software developers” says Hella CEO Rolf Breidenbach. 

But riding the new wave is not always easy. For example, software problems ruined the launches of two important Volkswagen models: the eighth-generation Golf and the first-generation ID3 electric car. And this year, Volkswagen Group replaced its software chief.


Personal comments

It may not be a surprise that sophisticated systems in new cars require sophisticated software. Electrical vehicles (fully electric and hybrids w/o plug-in) require advanced software to run these types of drivelines as efficiently and smoothly as possible. ADAS systems and future V2V and V2I systems are also relying on software capabilities.

The reason why software development traditionally has not been the core business and competence in the big vehicle OEMs is most likely because it has been more efficient and less expensive to buy this competence from high-tech companies – and consequently, lack of competencies in software development. But now, the trend seems to be to develop your own operative system in-house and the CEOs seem to be very enthusiastic about this strategy. The article does not say much about why automakers are now investing in in-house software development, except not being dependent on suppliers and consultants. One could to that argue that contracted suppliers and consultants make the OEMs independent and more flexible to meet trends and technological challenges. The trend to take back control of the software is on the other hand clearly aligned with the software becoming a crucial part of the future customer offer. 


Written by Mikael Söderman, RISE Mobility & Systems. 



1. 2020-10-13. Newsdesk, Automakers rush to take back their software codes