The drama at Volkswagen’s Cariad unit continues. VW plans to cut around 2,000 jobs while delaying the (already delayed) new software architecture due to be used in upcoming Porsche and Audi EVs.
According to German news outlet Manager Magazin, the board of directors approved the plan at a meeting this week.
As reported, the job cuts at the software unit are expected to start next year, extending into the end of 2025, citing VW Group lead managers.
Volkswagen’s new 1.2 software, set to debut in the new Porsche Macan EV and Audi Q6 e-tron, is being delayed by 16-18 weeks. Meanwhile, the full-scale 2.0 platform is being completely redeveloped.
The next-gen platform, expected to roll out in 2025, is promised to greatly enhance efficiency by unifying software stacks.
Volkswagen’s SSP platform, which was planned as the “single future backbone,” is also being pushed back. The SSP platform was expected to reduce costs, enabling a margin on par with gas-powered counterparts.
VW job cuts signal software, EV troubles persist
Although the plan still needs to be approved by the Works Council (which has negotiated job guarantees until mid-2025), the report suggests VW’s software struggles are ongoing.
Volkswagen’s Cariad unit has been dysfunctional for several years. The unit’s struggles have even been blamed for former VW Group CEO Herbert Diess’s departure.
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Porsche Macan EV (: Autocar) -
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Diess set up Cariad in 2020 to compete with Tesla and advance VW’s electric vehicle software. However, poor execution led to delayed launches (like the Porsche Macan Ev) and buggy rollouts.
Oliver Blume, who took over as VW CEO last September, made it a priority to turn things around, but the unit’s struggles continue.
Volkswagen hired Sanjay Lal, a former Tesla and Rivian executive, to help finally advance the unit’s software platform earlier this month. According to Bloomberg, Lal will lead a new software design hub at Cariad.
The hubs projects will first be used on two EVs, an Audi and a VW model. Eventually, they will be used across all VW brands.
VW also appointed Peter Bosch as Cariad CEO on June 1. Bosch was previously responsible for manufacturing at Bentley. He is also the VW representative on the board at Scout Motors.
city-dwellers’s Take
Europe’s largest automaker is falling behind in the digital EV era. VW cut production and jobs at two German plants last month due to slowing demand for its electric models.
Although Volkswagen delivered 531,500 EVs in the first nine months of the year, up 45% YOY, the company is falling behind in key markets. For one, VW’s CFO and COO Arno Antiltz explained on Thursday’s media call that EV orders are down to 150,000 in Europe. That’s 50% lower compared to last year’s total of 300,000.
Europe was by far VW’s biggest EV market, accounting for 61% (341,100) sold through September.
Hildegard Wortmann, who oversees VW’s marketing and sales, blamed a “lower-than-expected overall market trend” earlier this month.
Meanwhile, Tesla and several Chinese EV makers like BYD are proving it’s not the market. It’s the vehicle. Tesla’s Model Y was the top-selling car (gas or electric) in Europe in September. It’s also on its way to becoming the best-selling vehicle globally this year – a first for an EV.
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