The world’s largest automotive supplier bundles its competencies.
Stuttgart The battle for software sovereignty in the car has reached a new level. Suppliers, too, are putting up a lot of steam when it comes to the future of the industry: Bosch is now bundling 2,300 software developers under the umbrella of its Etas subsidiary in order to be able to develop faster.
This increases Etas’ clout by 800 employees. “With the new setup, we want to become the leader in the future as a provider of application-independent vehicle software,” said Bosch boss-designate Stefan Hartung on Tuesday.
Bosch wants to offer the entire toolbox: comprehensive vehicle basic software, so-called middleware and cloud services, which are indispensable for updating vehicles during operation – similar to smartphones.
“Our universal software foundation is a key requirement for the digitization of modern, software-defined vehicles,” says Hartung, who will start his job at Bosch in January. In the future, software should be able to be developed faster, more efficiently and together with partners on the central platform.
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The heads of the German car manufacturers VW, BMW and Mercedes had declared at the Auto Summit of the Handelsblatt in November that the software would make the difference in future vehicle generations. But who is responsible for what part of the software is open. The transitions between differentiating parts of the software, which the car manufacturers absolutely want and have to make themselves, and the rest of the software are sometimes fluid.
Experts see the market for automotive software in the billions over the next few years. Bosch expects double-digit growth annually through 2030. Competitors Continental and ZF are also investing heavily in the area.
Bosch has a total of an armada of software developers, which was increased by ten percent to 34,000 people in the past year alone. Since the beginning of the year, the Swabian foundation group has combined a total of 17,000 employees with special tasks for central computers, driver assistance and infotainment in the new Cross-Domain Computing Solutions division.
Several hundred employees also come from this pool to the new special unit under the Etas umbrella. “Automobile software development is one of Bosch’s core competencies,” emphasizes Hartung.
Bosch and Continental are looking to get closer to VW
With the help of the new unit, Bosch should also offer itself as a potential partner of Volkswagen in software development. Dirk Hilgenberg, head of the VW software unit Cariad, wants to bind the automotive suppliers more closely in the development of the cross-brand operating system VW.OS. However, with one restriction: the suppliers should no longer dictate software development, as was common in the time of the control units, but VW itself.
“There are only two ways: Either he enters into a partnership with us, or he is out of the question for us as a supplier,” Hilgenberg told Handelsblatt at the beginning of September. Talks with the suppliers have already started. “It is now a hot phase because it will be decided which strategic partners we will work with in the future.”
Continental is also looking for proximity to VW. The Bosch competitor is already supplying the car manufacturer with central computer units and software for the ID series. The new head of technology, Gilles Mabire, is said to be in contact with Cariad almost every day. In Ingolstadt, a location of the VW software unit, only one floor separates the offices of Cariad and Continental.
The suppliers seem to be coming to terms with the new way of working together. Bosch and Continental concentrate primarily on the software fundamentals for a car operating system. In a figurative sense, the suppliers develop the gray Lego board, i.e. basic software and middleware on which the car manufacturers can put their colorful Lego blocks, i.e. their applications.
The lowest layer is the so-called system software. It controls all processes in one computer unit and is therefore the link between hardware and software. The basic software and the so-called middleware are built on this. This creates the smooth communication between different programs.
The application software is enthroned at the top, the part that is visible to the customer. Such applications can be, for example, navigation functions, voice assistants or automated driving functions.
VW is dependent on the support of the two largest German auto suppliers. And ZF, the third largest German auto supplier, is also playing along and has united its software people since the beginning of the year. ZF relies on cooperation. It was only in October that the group decided to build an “industry-leading middleware solution” together with the Indian specialist KPIT.
High time pressure for the car manufacturer
Various options can only suit the Wolfsburgers. Because the car manufacturer is under immense time pressure. The competition is ahead of VW in software development. Tesla is a pioneer and already offers its customers an operating system that can be updated. With Android Automotive, an advanced infotainment system, Google has already tied numerous automakers to itself, including Volvo, Nissan, General Motors and Ford. And Chinese automakers such as Nio and Xpeng have developed their vehicles based on software based on the example of Tesla.
Volkswagen boss Herbert Diess has already taken a look at the competition from China and was lastingly impressed. “Ralf Brandstätter and I have tested a few cars from China in the past few weeks. We have to admit: They are really good, ”said Diess at a works meeting at the beginning of November and warned of the new competitors. “Apple, Google or Foxconn come with a lot of capital and expertise in software and electronics.”
VW wants to make up for the deficit with its daughter Cariad. The carmaker invests a lot of money in the process: the software unit has around 2.5 billion euros available every year. The goal: By 2024, Volkswagen wants to develop a uniform operating system based on the Tesla model, which all brands in the group can use. Updates and fee-based software improvements that drivers can download as an app, just like a smartphone, should be made possible with the help of the operating system.
The problem: development is only progressing slowly. “From our point of view, Cariad could have a higher speed,” criticized works council boss Daniela Cavallo last in an interview with the Handelsblatt. In corporate circles it is said that the schedule can no longer be adhered to. Instead of 2024, the operating system threatens to be ready in 2025 at the earliest.
It is quite possible that as a result of this emergency, the proportion of automotive suppliers will rise rather than fall. “We offer customers a comprehensive range of software-defined vehicles,” says Etas boss Christoph Hartung, who happens to have the same last name as the designated Bosch boss Stefan Hartung. The Etas boss knows what VW needs. He only came to Bosch from Volkswagen two years ago.
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