Volkswagen is preparing to end its automated driving development alliance with auto supplier Bosch, multiple internal sources told German media, as the carmaker moves to reduce costs and sharpen competitiveness.
The collaboration began in 2022 when Bosch teamed up with Volkswagen’s software arm, Cariad, to build software for driver assistance and autonomous driving across Volkswagen’s brand portfolio. Volkswagen referred inquiries about the reported decision to Cariad; Cariad did not immediately respond to requests for comment.
Bosch and Cariad issued a joint statement noting a long history of close cooperation and a shared objective to bring automated driving systems to a mass market worldwide. The joint statement included the following passage:
"As a matter of principle, we regularly review our development partnership and continuously assess whether it aligns with our strategic and technological goals as well as current market developments," the companies said, adding that they do not comment on confidential discussions with partners.
According to the reports, internal reviews concluded the initiative failed to reach anticipated performance benchmarks after approximately 1.5 billion ($1.71 billion) had been invested. Those assessments reportedly determined the technology was not yet competitive.
The reports indicate the Bosch partnership will be terminated in accordance with contractual terms, and a final termination was not expected to take effect before Monday. Volkswagen is said to be planning to source both hardware and software for advanced driver-assistance and automated driving systems from a new supplier.
Work to select a replacement is reportedly underway, with a contract award targeted by September. The coverage also followed separate reporting that Volkswagen is contemplating more drastic restructuring measures in Germany, including the potential closure of four factories and a rise in projected job cuts to as many as 100,000. The reports included an exchange rate note: ($1 = 0.8785).
Market indicators shown in the reporting highlighted notable stock movement tied to the news, with references to Volkswagen and Bosch share changes in-line with the coverage.
Context and next steps
Volkswagen’s decision to seek a new partner for automated driving hardware and software follows internal scrutiny of the Bosch-Cariad project’s competitiveness and return on investment. The planned replacement procurement and contractual timeline indicate Volkswagen intends to proceed promptly but within the constraints of existing agreements and review processes.