Vehicles: “Fusion” mission: Software strategies of the car manufacturers

vehicles
“Fusion” mission: software strategies of the car manufacturers

Of course, it was no coincidence that the Stuttgart car manufacturer Mercedes-Benz chose Sunnyvale, California, instead of the headquarters in Untertürkheim for its “strategy update”. Silicon Valley instead of “The Länd”: In the heart of the tech industry, CEO Ola Källenius and his colleagues explained on Wednesday how their own operating system (MB.OS) should lead the group into a “software-driven future”. A future that the other major German manufacturers also want to open up.

In the middle of the decade, the carmaker with the star wants to introduce MB.OS – together with the new vehicle platform MMA. The company decided to be “the architect of its own operating system,” said CEO Ola Källenius. Software is a core competence for a car manufacturer. “Now we have to deliver,” said Källenius.

Internal software expertise as the key

MB.OS is developed by the company itself in order to retain full control over customer relationships and to ensure data protection. It has access to all areas of the vehicle: infotainment (entertainment and information), vehicle and comfort functions, driving and charging, and automated driving. The operating system decouples hardware from software and enables faster innovation cycles and increases – with a connection via the cloud – the flexibility and speed of updates.

Mercedes relies on internal expertise for the car software, but also on selected partners. For example, the app for the video platform YouTube should be available in cars in the future. Applications from the video conferencing services Webex and Zoom are to be integrated, as is the game provider Antstream. In addition, they want to serve the important Chinese market with content from the online giant Tencent. When it comes to automated driving, Mercedes has been working with the US specialist Nvidia for some time. Mercedes CFO Harald Wilhelm revealed in the presentation on Wednesday that Nvidia gets around half of the proceeds from the jointly developed system.

By the end of the decade, software sales are expected to reach a high single-digit billion euro figure. As early as 2022, software-based sales would have exceeded one billion euros. In 2025, one billion euros in profit before interest and taxes should be generated with the digital services. According to their own statements, Mercedes invests one to two billion euros in development every year. By the middle of the decade, spending on software will account for 25 percent of the research and development budget.

That’s what the Volkswagen Group is planning

In the VW Group, the development of a software business is the central topic for the future, alongside the expansion of e-mobility. A mid-double-digit billion sum will flow into digitization and vehicle networking alone in the coming years. The focus of the newly founded Cariad IT division is the development of its own car software – for example for better wireless updates, multimedia services or functions for different levels of assisted, automated and later fully autonomous driving.

A “software backbone for all group vehicles” is to be created, also in order to become more independent of Google or Apple and to achieve more added value from self-programmed code. The software is to take over control, operation and networking tasks and also play an important role in the planned VW mobility platform. This is about interfaces to shuttle services, additional car sharing, financial services and other offers.

The schedule is shaky

But the issue at VW turned out to be much more complex than initially assumed. There has been talk of a learning process for a good two years: it just takes some time for development to really pick up speed. In any case, the long-term goal of a “scalable” operating system (VW.OS) for all equipment levels for all cars from Europe’s largest car company is far from being achieved.

CEO Herbert Diess, who left in 2022, had aimed for a platform for fully digitized electric vehicles with VW.OS from 2026. However, because there were delays, dissatisfaction grew – especially among the subsidiaries Porsche and Audi, who said that luxury-class customers shouldn’t have to wait too long for new functions. Coordination and development problems at Cariad had postponed model launches. Diess’ successor Oliver Blume straightened out the software strategy. This also shakes the schedule of the VW core project Trinity, which should start as the most important model in a new plant from 2026.

BMW: “When hardware and software merge”

The Munich-based company wants to combine hardware and software with large IT companies. However, BMW makes sure that it retains sovereignty over the data and is able to link the systems itself so as not to become dependent on individual partners. “We are not at all afraid of tech players because we work with everyone,” said CEO Oliver Zipse in January at the CES technology fair in Las Vegas. In addition to the IT giants, there are also many highly specialized start-ups. Cars are not just smartphones on wheels, they are complex, explained Zipse – a hurdle for established tech companies.

In 2025, BMW wants to launch a new, software-defined generation of vehicles geared towards electric drives: the so-called New Class. The car manufacturer gave an outlook with the vision vehicle BMW i Vision Dee (“Digital Emotional Experience”).

Zipse said the car shows “what’s possible when hardware and software merge.” The head-up display projects information across the entire width of the windshield. And the car adapts to the driver’s habits – automatically opening the door when approaching, suggesting navigation destinations and providing information, messages, calendar entries or social media posts. Even the color of the car can be changed digitally.

dpa