VW will invest $4 billion to build digital businesses

August 23, 2018 11:33 CET

FRANKFURT — Volkswagen will invest 3.5 billion euros ($4 billion) by 2025 to build digital businesses and products including a cloud computing-based platform to connect vehicles and customers to offer services such as car sharing.

VW said on Thursday it was working on a new software operating system, to be known as “vw.OS”, which will be introduced in VW brand electric cars starting in 2020.

These new vehicles will have a completely new electronic architecture designed to help facilitate autonomous driving functions, VW said in a statement.

Rather than having around 70 different sensors and controllers operating independently within in each vehicle, the new cars will connect the various sensors using the new proprietary software operating system.

This way, information gathered by a parking sensor could be linked to the steering, brakes, and high-definition maps, to allow a car to park itself once an onboard camera spots a free parking space.

VW said it was easier to do over-the-air software updates for cars if the operating system was designed in-house, rather than depending on third-party software supplied by the different vendors providing various sensors.

Car share business

Volkswagen also said it would launch a car-sharing business, called “We Share,” in Berlin using a fleet of 2,000 electric cars in the second quarter of 2019, competing with the DriveNow and Car2Go offerings of Daimler and BMW.

The We Share service will expand in core European markets as well as selected cities in the United States and Canada, the automaker said.

“We will be a device and software company,” Michael Jost, the VW brand’s strategy chief, said at a press conference. “To deal with this development, we need to reinvent the automobile.”

The We banner will be used for a package of mobile applications that VW customers can access with a single sign-on and that will be available for both conventional autos as well as the company’s new electric cars. Services will include electronic payment for parking, in-car package delivery, fuel-price tracking and localized deals from retailers. The project has a goal of generating 1 billion euros in annual revenue by 2025.

VW brand sales chief Juergen Stackmann said We Share will be a “major user” of VW’s I.D. sub-brand of electric models. “Our mission is to become zero-emission, as much as we can, and this service will help us to get there,” he said.

Bloomberg contributed to this report

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