Text | Karakush
Volkswagen has been working on software for almost two years.
In 2020, it was still a department called car.software organization, drawing a budget pie of more than 7 billion euros; by the end of the year it had become a European joint-stock company, renamed CARIAD, and was as informative as yyds, meaning "CAR, I AM DIGITAL".
The day before yesterday, the software company officially established a Chinese subsidiary and released its China strategy.
It's time to remember its name, no less important than any of Volkswagen's treasure brands, because Volkswagen has stacked all its software-related work into CARIAD.
According to the latest investment plan, Volkswagen's software budget has doubled to 27 billion euros in five years, and CARIAD can get an average of 2.5 billion euros a year. With a lot of money, they were able to quickly integrate 15 software companies and have more than 5,000 employees.
You're definitely calling, don't bully me into reading less, not that I haven't seen the public, the digital cockpit is just that, the autopilot hasn't heard of it, and the whole spirit is still in the early stages of enthusiastically publishing press releases for the successful launch of OTA updates. Inputs and outputs, like Jin Lian and Da Lang, are not proportionate to those who have drunk medicine.
So, what exactly is CARIAD doing? Why is it not as easy as Tesla or the new domestic power, which makes it easy for people to get the happiness of being dominated by digitalization? The slow half-beat public, is it directly garbage sorted?
Software construction that starts with bottoms
To figure out the means, first understand the purpose.
CARIAD is to establish a full-stack software technology development capability for the public, rather than just implementing the bulk function of aligning the competitive products on the market.
This requires starting from scratch, including designing and developing concepts and technical systems from scratch. For traditional automotive companies, the advantages that can be inherited into software are limited to familiarity with the complexity of the car. In the past two years, Volkswagen has obviously spent a lot of effort on the basis of organization, and the results of its efforts are mainly reflected in three aspects: simple and boring:
First, the process management toolchain PMT, including more than 50 customized and self-developed tools, supports a variety of technology stacks and development languages, whether it is the development of automotive operating system platforms, car machine applications, or cloud services, can be a one-stop solution, and ensure that the delivered software is consistent, transparent, fast and compliant. The current primary version has improved performance for software development:
For example, if the requirements change in the previous development, it will make the product manager feel pained, because the software requirements document of the auto parts is smelly and long, the dependencies between paragraphs, the causal relationship is complex, and a small change may affect multiple documents and subsequent steps. PMT automates tracking of a change, increasing mobility and flexibility in the face of change.
For example, in the past, programmers wrote code in the local environment, and had to go through an integration process to merge the code into a test branch to complete a series of tests before being allowed to go to the next test. PMT can automate this process with one click, eliminating a lot of manual operation.
The second is to establish a faster software development process. Software can't still be the rhythm of 3-5 years of car development. CARIAD uses a rolling innovation process called "Forward" to integrate new projects into the product line on a quarterly basis. The first "Forward" in the first quarter of this year has more than 80 proposals, of which 6 projects with the most market potential are planned to be developed in the next 3-6 months.
These projects can be ADAS, smart cockpits, remote services, infrastructure areas. For example, there is a "rainbow" project that provides a toolbox of freely combined vehicle functions, which can quickly customize new scene applications.
We've seen similar tools on friends. Volkswagen uses it to make a very interesting thing, that is, when you sit in the car, the car will identify the color and style of the clothes you are wearing through the camera, and automatically configure the desktop theme, mood lights, music and other digital elements of the central control screen to match your OOTD.
It is based on a flexible technical architecture. This is included in CARIAD's current main line of tasks, namely (third) a software platform for all brands of the group.
In addition to a unified, extensible architecture, the platform includes VW.OS, Volkswagen's self-developed operating system, and Volkswagen Cloud VW.AC.
We can think of "Rainbow" as the initial version of the architecture, which integrates dozens of electronic control units into several domain controllers, such as ICP as a smart cockpit domain controller, carrying related software operations and updates; while other sensors and controllers, including cabin cameras, air conditioners, and mood lights, are connected to the software operating system through the Zonal Controller.
Such an architecture can support more flexible software-defined, composable development, and continuous iterative upgrades, simplifying the service problems that would otherwise require complex integration of multiple ECUs, while offering a great opportunity to reduce wiring harnesses on the current bodywork by approximately 55%.
The more mature and complete platform will be launched around 2025.
Prior to this, CARIAD is still on the road of OTA, and the Chinese ID. series will achieve the first OTA update in the second half of this year; in the next two years, it will launch high-end software suitable for PPE platforms, including "advanced infotainment systems and advanced driver assistance systems", as well as OTAs on Audi and Porsche...
After that, only from the current efforts, it seems that no high-energy warning can be seen.
Whether it's tools, processes or platforms, the essence is to make distant and upstream preparations for increasing the speed of development, just like you have to eat a fried chicken and run to raise chickens first. But under the premise of large-scale agile development at the enterprise level, the curve eats chicken has its significance. Because software, even more than traditional car manufacturing, can produce a higher scale effect.
It is no longer a second-class department
Software is, of course, an economic account.
It is relatively expensive in the car, especially as a one-time expense, and purchasing software with embedded systems is inevitably a huge waste, because the basic software stack is actually highly similar. Doing your own software stack, despite the initial investment, is advantageous to allocate to the long-term economic value.
This is also the basis for Volkswagen to build a common software platform, maximizing the commonality of scale, one of its goals is to run the CARIAD technology stack on more than 40 million cars worldwide by 2030, of which in-house development software accounts for 60%, compared with only about 10% today.
For all mega-corporations, synergies and economies of scale are established.
For example, another car group, Stellantis, whose 14 brands will be based on four electric vehicle architectures and three software platforms in the future. Tang weishi pointed out that this sharing can make Stellantis 30% more efficient than competitors, reduce the cost of electric vehicles by 40%, and ensure that the overall break-even point is at 50% of shipments. Stellantis expects to achieve a €5 billion merger synergy by the end of 2024.
At the same time, "soul" is also a problem. At an internal meeting last year, Diess stressed to managers that if Volkswagen wants to remain independent, it must be able to develop the software in the car itself, rather than hand over data sovereignty, interfaces, or ultimately the "brain" to big tech companies. "For us, this is the only way to guarantee our long-term success."
On a unified platform, brands have the tools and freedom to differentiate between sporty/comfortable/luxurious positioning. In the future, car differentiation will become more difficult, it is already very difficult now, everyone is half-brother, but through software, it is still very possible to achieve.
In the business model of traditional car companies, software is regarded as a secondary sector attached to hardware. But whether it's the economics or the relevance that defines the brand, today's software is at the heart of it. Ten years later, volkswagen software services revenue will account for more than 1/3.
Last week, volkswagen's board of directors met in Berlin to align with the Group's new business model: as a vertically integrated mobility company consisting of five segments: brand, platform, software, battery, and mobility solutions, CARIAD, as an entity for software development, will coordinate joint decisions at the level of supervisory board and working committee. Play against opponents like Apple, Google, Mobileye, and Tesla.
The three fart kicks that flowed out at the meeting were repeatedly tasted by everyone, because of Chinese names such as Weilai, Xiaopeng, BYD, Ningde Times, and Foxconn. Although it is far away, it is worthy of being an electric vehicle power.
China's role
This year Volkswagen's three key tasks: CARIAD, China business, and business model.
CARIAD China is clearly a implementation move. This is CARIAD's first branch outside its European headquarters. The Chinese team will lead the R&D involving 70% of the new software platform technology stack and product line, including local R&D and adaptation.
The obvious reasons will not be repeated. China is important and is Volkswagen's most important market outside of Europe, accounting for 40%.
To say that a problem that is easy to ignore is the talent pool. By 2030, the high demand for software in car companies will increase the demand for software engineers by three to four times, which will force car companies to participate in the competition of code farmers, and even directly compete with technology companies with thick blood bags.
Car companies like Volkswagen have a terrible image among young programmers in Europe. Entrenched hierarchical and process management, Renaissance red tape, lack of professional career upward passages, heavily influential trade union groups, and workplaces often located in frontier towns such as Wolfsburg or Ingolstadt, are very unattractive.
There are improvements, such as CARIAD, and the website alone can see the fashionable work culture. In the previous article "Scattering Money Master Volkswagen", we also mentioned that Volkswagen invested in programming schools, more than one, as long as they are over 18 years old, they can enroll, they can have no experience, and they can train basic software development qualities within two years. Many trainees are blue-collar workers from the mass production line, work-study, graduation and transfer.
Coincidentally, the above-mentioned Stellantis also established a similar software academy in February this year, aiming to train 1,000 software engineers per year. Car companies are forced to engage in education, which, to some extent, can reflect the grim situation of building software resources in Europe. The European Commission estimates that Europe currently needs 500,000 IT professionals. Global expansion then became a solution.
Cariad China, for example, now has a team of more than 600 people, and the first batch is through the integration of existing talents in volkswagen and Audi brands. This number is expected to double by the end of 2023, with more than 90% of them being local software talent, eventually establishing a nationwide distributed R&D network.
In addition to having a larger population base, Volkswagen is also looking for specific software capabilities in China and the United States that are not found in Europe. For example, the application of OOTD is obviously a Chinese handiwork.
For example, like the car TikTok, how can you expect Europeans?