Who and what is CARIAD? What you need to know

CARIAD. Get used to seeing that name, because if you’re a driver or even just interested in the automotive world, you’re going to see it a lot more often in the coming years. But what is CARIAD, who is it and what does it do? And more to the point, is it important?

Contemporary carmakers face mounting challenges. Climate change is pushing them not just to make vehicles zero emission but also to clean up their production processes and supply chains. From another angle, consumers are demanding more advanced and useful technologies to make owning a car more like owning a mobile phone, a device that receives continual updates. There’s also pressure coming from changes in city infrastructure that’s encouraging drivers to forego their cars altogether.

Earlier this year, German automaker group Volkswagen drew back the curtain on its ambitious 10-year plan in which it lays out how it will adapt and evolve in the face of this fast-changing and challenging industry.

The marque outlined how it will develop new drivetrains, value propositions and business models and create more advanced vehicles that are lower emission, more sustainable but still highly desirable. Moreover, how it plans to address market pressures and meet customer expectations.

As part of its 10-year plan, which it called “New Auto”, Volkswagen AG set out the plan for a single battery electric vehicle platform that will span the group’s brands. It says the consolidation of component manufacturing will help it remain profitability in the changing world by lowering capital expenditure, research and development and unit costs.

Importantly, VW also spoke of how it expects mobility services and software to become more important to its profitability as the world transitions to new forms of transport and ownership, as Ars Technica reports.

This is where CARIAD comes in.

What’s CARIAD all about?

Even though it was launched this year with a dedicated name and brand, it was founded in 2020, so CARIAD isn’t entirely new.

CARIAD was once, rather purposefully, called Car.Software and was a division of VW Group with the sole responsibility of producing software for the group’s vehicles.

According to an infographic from VW, Car.Software focused on developing vehicle software in five key areas: connected car and device platform, intelligent body and cockpit, automated driving, vehicle motion and energy and digital business and mobility services.

Car Software, VW’s former software arm was tasked with development in areas that spanned the group’s vehicles.

CARIAD carries on the work that Car.Software started, but based on the importance VW is putting on the division, it will do so with greater expectations and focus. CARIAD is essentially an independent division, set up to service all of VW’s brands’ software needs.

As of late 2020, CARIAD employs some 4,500 developers and designers brought together from 15 software houses that were dispersed across the wider VW organization. The now centralized unit is working to “bundle and expand” VW Group’s software competencies so they can be unified across the group’s vehicles.

By 2025, VW wants CARIAD to double in size and be home to over 10,000 developers working on the software for its vehicles.

“CARIAD is an important lever in the digital transformation of the Volkswagen Group,” Sophie-Marija Krähling, Head of Brand Strategy & Events at CARIAD said in an announcement earlier this year.

Why CARIAD?

With the changing automotive world, software will be a defining factor of: vehicles, cars, how we drive them, how we experience them, and how they are developed and maintained.

Think of all the technologies now found in our vehicles and how much processing power and software that goes into making it all work.

Advanced driver assistance systems can require complex machine learning and image recognition algorithms to interpret road conditions to assist the driver and improve vehicle safety. In-vehicle infotainment systems bring together entertainment applications that sync with services found outside our vehicles.

Digital cockpits augment the experience of the vehicle by displaying important information to the driver from the vehicle’s safety sensors, such as the ISA detected speed limit, EV battery level, blind spot warnings, weather forecasts and traffic information. And with electric drivetrains, vehicle characteristics and driving dynamics are largely defined by the software that controls them.

This further emphasizes the need for excellent software that integrates various features seamlessly across the entire vehicle. What’s more, the software can be updated over-the-air to bring new features and improvements over time.

There is far less differentiation between EVs than there is between combustion engine vehicles. Add to this the fact that companies like VW are looking to consolidate and streamline manufacturing with unified EV platforms and software becomes the key tool in differentiating a group’s vehicles across its brands and model line ups.

Software first vehicle manufacture

While the creation of CARIAD might sound mostly like corporate reorganization at heart, and for now it is, we won’t really start to see the impacts of CARIAD’s software for a few more years.

When we do, though, we should expect to see some noticeable changes in the digital experience in VW’s model lineup. We’ll likely see the unique elements of each brand brought to life through each vehicle’s digital systems, we should also see improvements and more frequent deployment of updates to the group’s EV. We should also expect to see a broadening of the company’s EV offering as platforms are shared across the group’s brands.

Volkswagen Group is one of the world’s largest carmakers, responsible for automotive brands such as VW, Audi, Seat, Skoda, Lamborghini, Porsche and Bentley.

What’s perhaps more important, and less talked about, is how in-house software firms at automakers, that centralize the group’s approach to integrating technologies, will help improve the digital experience for drivers by simplifying the carmaker’s connection to important external suppliers.

While development organizations like CARIAD take control of programming software for VW’s vehicles, it will rely heavily on external suppliers to build its software stack.

This allows brands to seamlessly integrate tech, such as navigation and routing, traffic information and maps, from suppliers not just in one infotainment system in one vehicle model, but across an entire group’s vehicle line up.

Working in this way has the potential to bring better vehicle software to more vehicles, which is good for suppliers, OEMS, carmakers and drivers.

For now, the biggest takeaway is to recognize that CARIAD represents a seismic shift, a significant transition in how carmakers are approaching the future. Indeed, the VW Group of the future will be markedly different even to the firm that we know today.