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Software for the new mobility

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The pace of innovation in the digital world is driving car manufacturers to keep up. They are all reacting differently: some are allying themselves with tech groups, while others such as Volkswagen are seeking their salvation in independence.

Touch Console in the cockpit
The market for car software will grow to 50 billion dollars by 2030 (Photo: iStock)

The new, networked mobility in all its diversity has arrived – and is being happily accepted. E-scooters and mobility services such as the MOIA ridesharing service are conquering cities within just a few weeks, alongside the first driverless buses. More and more people are realising how these mobility solutions are making everyday life easier and protecting the climate.

Driven by the speed of the digital world, the automotive industry is pushing its way onto the market with an ever increasing number of innovations in the field of digital connectivity. However, these require new business models and cooperation with the powerful digital industry. Everyone knows that it is important that the course be set now, provided it’s not already too late.

The car software market will triple to nearly $75 billion by 2030

After all, the major Internet companies have long since discovered the automotive world and made it dependent on them to varying degrees. The economic domination of corporations such as Google/Alphabet and Microsoft has led to a debate about digital independence within the automotive industry.

According to a McKinsey study, the market for car software will grow by 150 per cent to 50 million dollars from 2020 to 2030. However, the question of how the slices of the pie should be distributed remains completely open and there are varying views about and ways in which the car and supplier industry can participate in this segment.

Currently, up to 70 control units have to be networked in Volkswagen brand vehicles and they run on software from 200 different suppliers. But only ten per cent of today’s software development takes place at VW. BMW and Renault-Nissan have been working with the Microsoft Open Cloud since as early as 2016. As a result, BMW was able to roll out the services of BMW Connected with Microsoft technology in 29 countries worldwide within nine months.

VW wants to break out of dependency – with 5000 experts and the top talent

Christian Senger, VW-Vorstand für Digital Car & Services
Christian Senger, VW board member for Digital Car & Services, wants to increase the company’s share in software development to at least 60 per cent (Photo: VW)

In Wolfsburg they want to turn the tide and ‘set the software standards themselves’, as Christian Senger, Member of the Board of Management for the Volkswagen brand and responsible for Digital Car & Services, describes the new software strategy.

By 2025, the company intends to increase its share of in-house software development to at least 60 per cent. From 2020 onwards, the world market leader intends to deliver more than five million fully networked cars a year. This will be made possible by an agile ‘car software’ unit with ‘5000 experts and the top talent’, Senger explains.

Developers have already specified what these vehicles will offer: there will not be any more fittings; voice assistants will take care of the vehicle-related requests. Various apps, which have been developed to date with the help of Microsoft, will bring a whole range of cloud services to screens up to ten inches in size. One of these, We Deliver, enables deliveries from online shopping to be left straight in the boot.

In technical terms, this means that real-time data from vehicle electronics must be coordinated with localised service offers and the electrics and electronics, hardware and software must be perfectly networked at countless interfaces.

More in-house software to reduce complexity and effort

‘We need to develop significantly more software’, says Senger, ‘in order to reduce complexity and effort because at the moment we spend a large part of our energy on the technical integration of third-party developments. That’s not a good model for the future’.

For Senger, the future model is twofold: the organisational separation of hardware and software in order to cope with the different development cycles and the transfer of VW’s typical platform expertise in hardware to the software side: ‘We’re developing a uniform operating system and software platform that will be used by all Group brands in all regions – the Volkswagen Automotive Cloud’.

Renault-Nissan is going the opposite way

Views on Volkswagen’s strategy vary within the industry. However, one point above all is decisive: Amazon and Google have long since enriched their cloud platforms with digital toolboxes that enable developers to develop new features, including artificial intelligence, within weeks. Cooperation leads to marketable results faster than independent development.

Renault-Nissan, for example, is using these advantages to go a different way than Volkswagen plans to: ‘Our cooperation with Microsoft not only helps us to develop key technologies that meet current customer needs much faster,’ said Ogi Redzic, head of the networking division in as early as 2017, ‘but also those that drivers cannot even imagine today’.

Renault-Nissan has now entered into a global partnership with Google to deliver a new intelligent infotainment system by 2021 that runs on an integrated Android system, offers lots of localised Google services and in principle relies on the features and software we’re already familiar with from our smartphones. Cars will therefore be integrated into the digital world of consumers, a strategic goal also shared by Volkswagen.

The Internet connection is what sets cars in motion in the first place – every user of public e-charging stations already knows this

BMW seems to be going a third way. Instead of continuing the appearance as a mobility service provider, the new boss Oliver Zispe wants to focus on the core business – vehicle construction – and also wants to differ in terms of data from competitors. Customer data should not be disclosed, but from the BMW perspective there is nothing wrong with using freely available development tools from Android. ‘We need software standards, uniform interfaces and data marketplaces for global scalability’, outlines BMW representative Christoph Grohe the desired software scenario to the Süddeutsche Zeitung.

The industry no longer has much time left to consider the right strategy. The next stage of innovation, autonomous driving, depends on fast mobile radio networks just as much as the car used to depend on the petrol pump. The era of a vehicle that cannot be operated when it is “offline” has long since begun. This is something that electric car drivers who want to get to a public charging station are already well aware of.


  • Future Mobility