ItInsightsWorld General: Volkswagen Weighs Europe Rollout for China EV Software Stack, Rivian Risk Grows

A Possible Change in Direction

As of now, Volkswagen is reportedly weighing whether a software architecture currently used on models sold in the Chinese market could be extended to Volkswagen brand vehicles in Europe. The report came from Reuters, which cited information from Manager Magazin, a publication based in Germany.

Such a move could leave Rivian at risk of being marginalized. Rivian is the United States partner working with Volkswagen on another technical route for Western markets.

Scope of the China Architecture

Manager Magazin said future vehicle programs from the Volkswagen, Skoda and Cupra brands could use the Chinese electric/electronic architecture developed with XPeng Motors as their technology base. These three brands are broadening their electric vehicle lineup in Europe. The report said Volkswagen brand head Thomas Schäfer was expected to present the plan to management on Tuesday local time. It would cover about three-quarters of the next-generation models from the three brands.

Volkswagen Declines Comment

Volkswagen declined to comment on the Reuters report.

Separate Tracks and an Expensive Partnership

The current arrangement has been split by market: Chinese-market models use the architecture built with XPeng, while Western-market models are being developed with Rivian. Volkswagen has invested $5.8 billion in Rivian, and the partnership has been an important part of Volkswagen Group CEO Oliver Blume’s software strategy.

A Long-Standing Scaling Problem

Reuters noted that Volkswagen has long had difficulty keeping pace with software development across the industry. The Volkswagen Group operates many vehicle lines, from mass-market names such as Volkswagen, Skoda and Cupra to premium brands Audi and Porsche, making it difficult to deploy the same software broadly. The internal software unit Cariad has faced similar challenges.