Volkswagen plans to end its “Automated Driving Alliance” with Bosch after deciding the joint autonomous driving technology was not competitive.
According to a report by German newspaper BILD, Volkswagen’s software unit Cariad and Bosch started the partnership in 2022 to develop software and hardware for driver assistance and automated driving systems for Volkswagen Group brands.
The report said the alliance involved more than 1,000 experts.
It also stated that Volkswagen has invested around €1.5bn ($1.71bn) in the project, but internal assessments found the technology had not reached the expected stage of development.
BILD reported that Volkswagen considers itself behind competitors in Level 2++ automated driving, which allows hands-free driving in urban environments.
Volkswagen now plans to obtain Level 2++ hardware and software from a new partner instead of continuing development with Bosch.
The company is reportedly in the process of choosing a new partner and wants to complete a contractual agreement by the end of September 2026.
The report said the alliance with Bosch will be unwound under contractual terms, while legal and financial consequences are being discussed internally.
The decision forms part of Volkswagen's cost-saving measures, with the carmaker aiming to reduce planned investment by almost €1bn between 2027 and 2031 by purchasing an existing solution instead of continuing in-house development.
Responding to BILD, a spokesperson for Cariad said: "We regularly review our development partnership and continuously coordinate whether it fits our strategic and technological goals as well as current developments in the market."
The spokesperson added: "Especially in the case of highly developed assistance systems, the market and technology have developed differently than expected at the beginning of the cooperation. Cariad does not comment on the content of confidential discussions with partners as a matter of principle."
Bosch agreed with Volkswagen’s statement to BILD.
Volkswagen expanded its collaboration with Mobileye for automated driving functions in 2024 and is also working with Rivian on a new electrical and software architecture.
