Volkswagen shakes up software arm Cariad — again

VW Group has switched up the leadership at Cariad once again, just three years since the automaker created the software unit.

On Monday, Cariad's board replaced its CEO Dirk Hilgenberg with Peter Bosch, who was previously responsible for manufacturing at VW's Bentley brand. Hilgenberg had been at Cariad since 2020. Bosch is taking over the top spot June 1. CFO Thomas Sedran and CTO Lynn Longo have also lost their positions in the restructuring.

VW has long struggled to launch software in its vehicles. Those missteps were one of the reasons the VW Group CEO Herbert Diess lost his job in 2022. Cariad, formerly called Car.Software Organisation, was formed in 2020 in a bid to reverse that course and develop software-defined vehicles that not only compete with the likes of Tesla but also deliver in-car entertainment and services that generate revenue. VW Group said in 2021 that Cariad could generate as much as €1.2 trillion ($1.4 trillion) in revenue by 2030, via subscriptions and other sales. But missteps and delays have caused a series of shakeups at Cariad, and in part led to Diess' dismissal.

Software 1.1 version is found in Volkswagen vehicles today. The software 1.2. platform is being developed for Audi and Porsche cars, while the 2.0 version will be an operating system designed for all VW Group brands. But efforts are at least two years behind schedule. The software 1.2 platform was supposed to be completed in 2022. Now Cariad is working to complete it this year to be ready for 2024 VW models.

With the program over budget and behind schedule, the leadership at Cariad was under increasing pressure, according to one source familiar with the inner workings of the unit that employs more than 6,000 people. Bosch is considered a successful turnaround expert and an executive known for his connections throughout the VW Group and its 10 brands.

"Last year, we drew up a ten-point plan for operational and strategic areas of action within the Volkswagen Group. One key element is the realignment of CARIAD, and we have already made good progress," VW Group and chairman of the supervisory board of Cariad Oliver Blume said in a statement. "We are now setting the next milestones for advancing strategic, structural and personnel development. CARIAD focuses on the development of digital future technologies for the Group brands. We are stepping up the pace and broadening our approach to partnerships. This is designed to combine our competences with the best solutions on the market for the benefit of our customers. The outcome is even closer software-vehicle development interaction."

VW Group is in talks with Hilgenberg and his team about possible new roles within the company, Blume said. He added that Bosch is the "right CEO at the right time" and noted that he is a strategist, an enabler and a team player.

VW Group is also adding two "acknowledged" and yet unnamed software experts to the board.