Volkswagen Group recently injected $5 billion (about 36.3 billion yuan) into Rivian to find another way to transform its software. In addition to the previous investment of 700 million US dollars (about 5 billion yuan) in Xpeng Motors to jointly develop two Volkswagen brand electric models, at the moment of rapid progress in electric and intelligent, the old traditional car companies have the capital to absorb the results of new car companies.
As the competitive environment enters the white-hot environment, the old car companies cannot run fast, and the new forces suffer serious losses, and the two have begun to learn from each other's strengths and weaknesses for win-win cooperation.
Part 1 The pain of public intelligence
This time, the demands of both sides are very clear:
For Rivian, it takes money to survive and grow, and the current market value does not support market fundraising operations. So this time Volkswagen's funds can continue to promote its own development.
The new software company will help the Volkswagen Group solve its software woes, and the RIVIAN R2 will be the first car to use the JV's software under the new joint venture license for Rivian's existing intellectual property licenses.
Several Volkswagen Group brands, including Audi, Porsche, Lamborghini and Bentley, will also be equipped with the new joint venture's software in the future.
In the Chinese market, Volkswagen chose Xpeng's G9 model platform, based on Xpeng's G9 model platform, intelligent cockpit and advanced driver assistance system software, to jointly develop two B-segment pure electric vehicle models, and sell them in the Chinese market under the Volkswagen brand.
In fact, we have seen Volkswagen's software self-development plan before, which is a huge hole dug by Volkswagen for itself, and now whether it is investing in Rivian or Xpeng Motors, it is to fill this hole and aim at software.
In fact, it can be seen that as automotive software begins to enter the regional architecture, vehicle companies must have software capabilities to complete the design and development of software, electronic control units and related network architectures. At this stage, car companies have no way back.
We can see that Volkswagen's leadership has recognized the importance of software at an early stage, but unfortunately limited to the limitations of the group, although a lot of resources have been invested, the final result is still not good, and the output capacity of software is not good, which makes Volkswagen show weaknesses in software capabilities in the iteration of EE architecture.
Part 2 How to Shift to "Software-Defined Vehicles"
We can currently see that the whole vehicle is based on Zonal and the new EE architecture, and the lack of software development capabilities can lead to delays in mass production, budget overruns, and even being left behind by competitors because they can't launch new products quickly.
More seriously, software issues can trigger large-scale recalls or customer safety risks. In China and the U.S., automakers with strong software capabilities are three to six times more likely to produce and quality than weaker ones, far outstripping the differences in hardware production capacity.
In order to improve software development capabilities, many car companies plan to hire a large number of software engineers in the next few years, redefine the governance model, and build around the model of software development centers.
Volkswagen is a prime example of this, where progress has been made in software engineering, but most of the results have not been able to catch up with the times. Areas such as agile practices, continuous integration, and automated testing are the main issues at the moment.
To meet these challenges, OEMs need to rethink and update their underlying operating models. Buying a loss-making car company with software capabilities is a clear way to go. The complexity of automotive software has increased fourfold in the last decade, while development efficiency has increased by only 1 to 1.5 times. This gap could affect the future success of OEMs, increase development and maintenance costs, and weaken innovation capabilities.
Reducing complexity and increasing efficiency requires a new software operating model that focuses on four dimensions:
● What software to develop: Reduce development complexity through modular and decoupled architecture, user-centered design, and requirements management.
● Where to develop software: Define the department, location, talent, and partnerships for development.
● How to develop software: Adopt agile development at scale and improve development and testing processes.
● Ways to drive software development: Optimize performance management and toolchain infrastructure.
The foundation of new software operation requires finding an enterprise with development capabilities. The essence of this wave of "reverse joint ventures" is to compete for a limited number of qualified new power car companies as their own R&D units. This will become a possible practical approach, and from this point of view, the Volkswagen Group's decision-making is still getting faster and too early.
brief summary
It is indeed very difficult for car companies to engage in software. At present, the value of software engineering of China's new power car companies is underestimated.
Article source: Zhineng Automobile
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