Volkswagen to end Bosch automated driving alliance after €1.5 billion investment

Partnership launched in 2022

The Automated Driving Alliance (ADA) between Volkswagen's software unit Cariad and Bosch began in early 2022. More than 1,000 specialists from both companies were tasked with building a common software platform for driver assistance and autonomous driving, aiming to offer it to other manufacturers as well. The project was seen as a response to competition from Tesla and Chinese firms.

Technology deemed uncompetitive

After around €1.5 billion in investment, internal assessments found the technology not competitive, Bild reported. The gap was especially wide in Level 2++ systems, which allow hands-free driving in urban traffic. A Cariad spokesperson told the newspaper that market and technology developments had diverged from initial expectations.

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.

Cost-cutting and new partner search

Volkswagen now plans to buy hardware and software from a new partner rather than develop it in-house, according to Bild. A contract with a replacement is targeted by September. The Bosch alliance can be terminated at the earliest on Monday, June 29, in line with contractual terms.

Broader restructuring pressure

The move comes amid a wider overhaul at Volkswagen. Reports on Friday indicated the carmaker is considering closing four German factories and cutting up to 100,000 jobs worldwide. The company has not confirmed the figures but acknowledged "profound" changes ahead.