Synergies in software development

Software is becoming of central importance, including in the automotive industry. The cross-brand CARIAD (formerly Car.Software organization) consolidates all activities relating to in-car software development within the Volkswagen Group, thus facilitating Group synergies.

03/18/2021 Text: Pauline Böttcher Reading Time: 5 min

Key Facts

  • Cars are becoming increasingly connected and a mobile device on four wheels
  • Audi is focusing on software and shifting the emphasis of Technical Development to the vehicle electrical system
  • The CARIAD concentrates on developing uniform software solutions for all of the Volkswagen Group’s brands, thus creating synergies
  • CARIAD’s development products will be used for the first time in the Group project Artemis – the first vehicle is set to be introduced onto the market in 2024

Software is becoming the differentiating competitive factor


When the term “mobile device” is used, most people think about smartphones and tablets. Yet there is a mobile device with four wheels that is more complex – and that is the car. The fully connected Audi models already offer customers digital experiences today. However, the majority of digitalization in the vehicle contributes “invisibly” in the background to enhanced comfort and efficiency. This trend is progressing rapidly.

What has long since become commonplace with smartphones and similar devices is being demanded increasingly in the car: continual updates and new features and functions – and ideally without having to visit the workshop. Over-the-air software updates are to provide the answer here, and offer certainty for Audi customers at all times that their personal data is secure. The quality standards and premium security requirements that are typical of Audi are just as valid as ever, particularly in the digital era. A car’s operating system and its connectivity with a highly secure data cloud are increasingly becoming factors that can offer a competitive edge. That is why software development is growing in both importance and scope.

Focus on software development


The fact that an Audi today autonomously stays in its lane and maintains a distance from other road users, among other features, is due to around 100 million lines of program source code. The infotainment, for instance, comprises more than 10 million lines of code, as much as was to be found only a few years ago in an entire vehicle. As vehicles become more digitalized, the complexity and costs of development also increase.

In order to actively shape this change, Audi is re-thinking Technical Development. Where the hardware of the vehicle, in particular, was once the focus of attention in the product emergence process, software development is now in the spotlight. To reflect this growing importance, Audi no longer organizes the management of vehicle projects in the product lines and Technical Development according to the length, size and width of the vehicle, but instead places the emphasis on the vehicle electrical system. This refocusing creates the basis for achieving synergies through the CARIAD.

The Volkswagen Group subsidiary has been operational since July 2020 and aims to bring together software expertise throughout the Group. CARIAD already provides Audi with access to 4,000 software experts.

CARIAD: development in five central areas

The subsidiary focuses on developing standardized software solutions for all of the Group’s brands and markets. The vehicle operating system VW.OS and integration in the associated Volkswagen Automotive Cloud are key components of the development scope. Moreover, the organization will consolidate the technological platform solutions in the future to create data-led business models and innovations. Investments also underscore the great importance attached to digitalization in the Group: The Volkswagen Group is investing around EUR 27 billion in digitalization. Compared with the previous planning round, this figure has doubled, and also includes expenditure for the range of tasks undertaken by the CARIAD. Thanks to standardized software solutions, substantial economies of scale are generated and therefore the costs per vehicle reduced for all brands. Meanwhile, customers benefit from more comfortable and seamless mobility featuring the Audi look and feel.

Connected Car & Device Platform

Uniform vehicle operating system, connectivity and corresponding cloud platform for all brands

Intelligent Body & Cockpit

Platforms for all electronic architectures in the Group, uniform integration of HMI functionalities, software structure and hardware

Automated Driving

Software functions for automated driving in all brands, for NCAP up to level 3 and beyond, functions and the corresponding reference hardware

Vehicle Motion & Energy

Software functions for the drive system, chassis and energy/charging technology, combined with a high-performance computing platform

Digital Business & Mobility Services

Technologies aimed at implementing new mobility services and digital business models in all brands

From end to end – the new electronic architectures

It may only be a small abbreviation, but for Audi and the Volkswagen Group it represents the basis for future digital innovations: E³. It stands for end-to-end electronic architecture, and extends from the vehicle to the backend through to the customer interfaces, such as the smartphone.

When operations commenced at the CARIAD, development responsibility for the current E3 architectures was transferred to the organization. At the same time, the new E3 2.0 architecture is being developed, representing a scalable architecture that will allow synergies to be leveraged throughout the vehicle life cycle.

Make or Buy? Make!


With the CARIAD, the Volkswagen Group aims to increase its overall share of in-house software development in the car from 10 percent today to more than 60 percent by 2025. In this respect, the focus must be on maintaining and extending the necessary know-how in the Group as it ensures a competitive edge. The real potential of software becomes clear as the number of vehicles grows. This applies to what can be learned from the data and also to cost advantages. The Group can profit from this scale advantage, with more than 9 million vehicles having been sold in 2020 alone. Moreover, data sovereignty and digital value creation are retained in the company through in-house development.

In addition to expanding its own software expertise, targeted collaborations ensure that the CARIAD can gain momentum. In addition, the company took over the front camera software division from software specialist HELLA Aglaia Mobile Vision GmbH at the beginning of 2021, for example. This move signals the intention of the CARIAD to expand its competences in image processing and press ahead with the development of automated driving functions for all Group brands.

Collaboration model

So how exactly does the new software unit operate? Currently, CARIAD is surveying the sales and development requirements across brands to ensure a scalable end-toend system design. The close content-related collaboration with all brands is critical to the success of the CARIAD. As a premium brand, Audi sees this as its special responsibility. After all, premium for many customers is already defined today by digital technologies that are tailored to their needs. The CARIAD brings together these requirements and develops a comprehensive platform consisting of operating system, electrical/electronic architecture and cloud. The brands can adapt features and functions on this basis that will make them stand out from the competition. Audi can therefore offer its customers a premium experience – but at a lower cost.


Artemis is the Greek goddess of hunting – and a project in the Volkswagen Group that is aimed at using development products from the CARIAD. ARTEMIS GmbH was created as an agile unit that advances innovative vehicle concepts and the digital ecosystem surrounding the car. An approach to vehicle development that focuses on software architecture and the integration of hardware and software facilitate the realization of new, software-based business models throughout the entire life cycle and the creation of a far-reaching ecosystem surrounding the car. The first goal: a highly efficient, fully connected electric vehicle from the Audi brand that is scheduled to enter the market in 2024.

CARIAD makes digital solutions available both for the vehicle and for the digital ecosystem surrounding the car.
CARIAD makes digital solutions available both for the vehicle and for the digital ecosystem surrounding the car.
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