Volkswagen CEO Says Software Will Be the Next Innovation in the Auto Industry

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【Summary】In the future, software will become the heart of a vehicle, according to Volkswagen CEO Herbert Deiss. Speaking at Volkswagen’s annual press conference in Wolfsburg, the VW CEO said that “Software will account for 90 percent of future innovations in the car.”

Eric Walz    Apr 18, 2019 5:30 PM PT
Volkswagen CEO Says Software Will Be the Next Innovation in the Auto Industry
The Volkswagen ID Concept

Today's vehicles are slowly transforming into electronic devices on wheels, equipped with computers and electric motors powered by batteries, as electrical components continue to replace automotive mechanical systems. In the future, robust software will become be the heart of a vehicle, a belief shared by Volkswagen CEO Herbert Deiss.

Speaking at Volkswagen's annual press conference in Wolfsburg, Germany, the VW CEO said that "Software will account for 90 percent of future innovations in the car."

The demand for software powered devices has risen exponentially. Embedded software powered devices are found nearly everywhere today and that will likely extend further in the automotive industry.

Drivers of new vehicles to come with host of convenience features, such as advanced driver assistance systems (ADAS), internet connectivity, infotainment systems and autonomous driving capability.

"Today our 20,000 developers are 90 percent hardware-oriented. That will change radically by 2030. Software will account for half of our development costs," Diess said.

Compared to a typical smartphone, a car has ten times as many lines of software code, and a self-driving car will have a thousand times that amount, Diess explained.

Volkswagen's ‘MEB' Platform for EVs

A typical fuel burning vehicle ten years ago might have 50 or more individual modules to control everything from the engine, transmission, power windows, and climate control. All of these systems are typically interconnected via a CAN-bus network. Deiss however said this was going to change in the future.

Deiss said that Volkswagen will shift from a decentralized system of computer modules toward a more "centralized and networked electronic architecture." These types of systems might better support autonomous driving technologies. This work is already in progress with the automaker's modular MEB platform.

VW is not just adding an electric powertrain to an existing vehicle platform, the company built its MEB platform from scratch—specifically built for electric vehicles.


Volkswagen's MEB Platform will be the foundation for millions of new electric models.

MEB is an acronym for "Modulare E-Antriebs-Baukasten," which when translated means "modular electric-drive toolkit".

The new architecture consolidates all of the vehicle's electronic controls, batteries, and electric powertrain components into a single, modular chassis, which reduces complexity and the number of microprocessors needed. This module platform is being used in the new Golf EV model, replacing dozens of individual modules with a few central computers.

"The new Golf ramp up has shown us that networking the various control units is currently much too complex. We will be combining the 70 control units from up to 200 different suppliers into three central on-board computers," Diess said during his presentation.

In the past, Volkswagen said it planned to build up to 15 million electric vehicles based on its MEB modular platform. Now the automaker wants to increase that number to 22 million. Many of these vehicle will be capable of autonomous driving. To pull this off, the automaker will need robust vehicle software.

In addition, Deiss said that VW needs more software engineers to program the various sensors and actuators within a vehicle, so that a self-driving car can navigate complex traffic situations and avoid accidents. These vehicle will become even more complex when combined with AI and machine learning software.


Volkswagen's ID Vision concept, a fully-electric sedan.

Recovering from ‘Dieselgate'

Volkswagen is shifting its strategy towards electrification in the wake of the 2015 "dieselgate" scandal, which has cost the company more than 28 billion euros ($32 billion) so far in fines and penalties. The scandal also damaged the automakers reputation with consumers.

$7.4 billion of that amount went to buying back over 300,000 of the affected vehicles from customers.

VW marketed it diesel-powered vehicles as "Clean-Diesel." The popular Volkswagen Jetta diesel sedan was even awarded Green Car of the Year in 2009. However, the award was rescinded in October 2015 amid the fallout of the scandal.

After the cheating software was discovered by researchers at West Virginia University, VW plead guilty to tampering with its emission control software. The software worked by falsifying actual emissions, making them appear lower than what they were if a vehicle's sensors indicated that it was undergoing emissions testing.

Levels of nitrogen oxides were up to 40 times higher than U.S. EPA standards allowed. The software was installed in a wide range of VW and Audi diesel-powered vehicles from 2009 to 2015.

"Volkswagen is taking on responsibility with regard to the key trends of the future – particularly in connection with climate protection. The targets of the Paris Agreement are our yardstick. We will be systematically aligning production and other stages in the value chain to CO2 neutrality in the coming years. That is how we will be making our contribution towards limiting global warming." Deiss said.

VW said it plans to build up to 70 new electrified models out of the 22 million EVs it plans to build.

Volkswagen aims to be carbon neutral by 2050 by eliminating carbon emissions entirely. To succeed in its mission, the automaker will need a full lineup of fully-electric vehicles that will be powered by robust software.

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