BERLIN (Reuters) – Volkswagen’s software subsidiary Cariad and automotive supplier Bosch have formed a partnership to develop automated driving software for use in Volkswagen passenger vehicles, the companies said in a joint statement on Tuesday. .
The software will enable so-called “Level 2” autonomous driving – consisting of hands-free city, rural and highway driving – as well as a “Level 3” system that supports all highway driving functions .
Level 2 driving would be installed on Volkswagen vehicles in 2023.
The software and its components could then be used in vehicles from other automakers, the statement said, without specifying when that might happen.
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The partnership is the second major collaboration announced so far this year by the two companies, which announced last week that they were setting up a joint venture by the end of this year to equip the battery cell factories of machinery.
The companies did not disclose how much they would invest in either partnership.
Volkswagen and Bosch have consolidated their in-house software divisions into single units in a bid to strengthen their offering in the face of competition led primarily by Tesla, as well as companies like Alphabet increasingly venturing into the automotive sector.
Volkswagen aims for its software unit, Cariad, to provide 60% of Volkswagen vehicle software by 2025, up from 10% when the unit was established in 2020.
But the competition for talent is fierce, and the high initial investment in developing software capabilities from scratch, at a time when many automakers also need funding for electrification and battery development, means that some form partnerships.
Bosch and Daimler announced plans in 2017 to build a joint “robo-taxi” automated driving fleet, achieving “Level 5” automated driving that would give the car full control – but the partnership was called off in 2021, months after Daimler’s CEO pointed out the high costs and risks involved.