The car will become a software product

The World Economic Forum in Davos is regarded as one of the world’s most important meetings between politics and business. It takes place annually, and today is the final day of this year’s meeting.

For a long period, a very important topic in Davos has been global warming. The earth is heating up quicker than previously believed with consequences more serious than anticipated. Mankind’s biggest challenge is climate change.

We won’t be able to save the climate just by transforming transportation. But: we must and will play our part!

From today's perspective, the most efficient way forward for the transport sector are electric vehicles – powered by renewable generated electricity, mostly wind or solar.

Volkswagen Group will be investing €30 billion in e-mobility over the next five years. We will be expanding our portfolio of electric models from 6 at the present to more than 50 by 2025. By then, between 20 and 25 percent of our vehicles will be pure electric models.

The Volkswagen brand’s ID. is a milestone on the road to climate-neutral mobility. It will be the first Volkswagen to be produced with an entirely neutral CO2 balance, including upstream battery production.

Effective solutions to combat climate change need clean power. The transport transition and the energy transition are two sides of the same coin. There is still a great deal to do in Germany, in this regard.

And there is more change to come:

The car will become the most complex internet device we have known so far, the car will become a software product.

For that reason we have to become a software-driven car company – that is a bigger change than only changing the drive train.

A total new set of skills will be needed to master this challenge, skills we do not fully have today. That means that the big transformation, we’re witnessing right now, is necessary. It’s a challenge, but at the same time, it offers a lot of interesting opportunities for Volkswagen.

As with any new game driven by the world wide web, scaling up fast is important. We have scale at Volkswagen and we are open to partnerships to generate even more scale. And we are building up the necessary new resources with the highest priority.

In Davos, I had the honor to announce that Volkswagen will be the first car company to separate software and hardware development on board level. We're doing so in order to really speed up the software focus and the software development process.