VW and Bosch End Their Automated Driving Alliance After 1.5 Billion Euros
Volkswagen and Bosch have ended their Automated Driving Alliance, the joint program launched in 2022 under then-CEO Herbert Diess to develop assisted and automated driving through VW's software division Cariad. AUTOHAUS reported the confirmation on July 2. Media reports put the investment at roughly 1.5 billion euros, with more than 1,000 experts involved across both companies.
The alliance produced an AI-based software stack for Level 2 driver assistance that both partners now plan to deploy independently: VW first in the ID.Every1, its roughly 20,000 euro entry model due in 2027, and Bosch with orders it says it has secured from multiple manufacturers. Joint Level 3 development will not continue. Reports cite internal assessments that the technology was not competitive, and VW intends to source automated-driving hardware and software externally rather than build it in-house. Cariad's works council criticized outsourcing a core future technology.
This is the clearest signal yet that Germany's largest industrial company no longer believes it can build frontier vehicle AI in-house at competitive speed. Watch where the sourcing goes: if VW's stack ends up on American or British foundations, the sovereignty argument German industry makes in Brussels loses one of its flagship examples.