Product shot of Volkswagen ID.4 cockpit, overlaid with graphics depicting cloud computing and vehicle Wi-Fi.

How Volkswagen Automotive Cloud will help shape the connected car of tomorrow

January 12, 2021 

Seattle may not be known as a hotbed for the U.S. automotive industry, but that’s changing, thanks to the increasing importance of cloud computing for connected and autonomous vehicles. In recent years, Seattle’s nickname of “Cloud City” has not only referred to the weather, but for the industry built around some of the best cloud companies and experts in the world. That’s why Volkswagen Group chose the city to help shape the future of connected vehicles with the Volkswagen Automotive Cloud.

In 2018, Volkswagen announced a strategic partnership with Microsoft to help accelerate the development of one of the largest dedicated automotive industry clouds, known as Volkswagen Automotive Cloud or VW.AC. Designed to provide a smart, and scalable foundation for connected vehicles, VW.AC is expected to handle data from millions of vehicles per day, with the goal of delivering connected experiences to customers around the globe starting in 2022 – a key part of the Volkswagen Group strategy to become a leading automotive software innovator.

“We are now a global leader with our electric platforms and a broad range of electric vehicles,” said Herbert Diess, Chief Executive Officer of the Volkswagen Group in November 2020. “In the coming years, it will be crucial to also reach a leading position in car software in order to meet people’s needs for individual, sustainable and fully connected mobility in the future.”

To that end, the Volkswagen Group announced in November 2020 that it anticipates doubling its spending on digital development to approximately $28 billion over the next five years. Under CARIAD, the large-scale software powerhouse for in-car software development in the Volkswagen Group, the automotive giant is building its own end-to-end software platform which includes VW.AC, an in-car operating system (VW.OS), and capabilities that will help enable the next generation of infotainment, vehicle performance, and passenger comfort up to automated driving.

“Software decides how people will experience and use their cars in the future. We want to take advantage of these opportunities. The Automotive Cloud helps us realize new business functions like remote control services, electric vehicle charging scenarios, and over-the-air updates,” says Dirk Hilgenberg, Chief Executive Officer of CARIAD. “We’re building a cloud that will scale to serve millions of customers around the world and will enable us to deliver ever-increasing customer value much faster.”

Think like a startup, scale like an enterprise

Zoran Lazovski, Chief Executive Officer at VW.AC, leads the team of almost 200 experts and counting. He says basing the unit in Seattle has enabled Volkswagen to attract many cloud computing experts who are passionate about building software for an automotive company that sells more than 10 million vehicles worldwide every year.

“We’ve already hired top talent on the team but we’re still growing. We want to attract even more best-in-breed expertise, especially in cloud innovation,” said Lazovski. “One of our biggest draws is the opportunity to solve challenges at the scale of one of the world’s largest automakers.”

“We invent very quickly here at VW.AC. To do that, we’ve built a value-led culture that is rooted in trust, accountability, teamwork, innovation, and integrity,” he added. “We’re organized into small, agile teams that use remote mob programming, overall retrospectives, and other methods to collaborate and continuously improve the way they work. We also actively seek to create teams made up of people with different backgrounds and experiences because diversity leads to better ideas, solutions, and experiences.”

As of January 2021, the Volkswagen Group wrote less than 10 percent of the software embedded in its vehicles, the rest of which is tied to third-party-owned proprietary software. With efforts like CARIAD and VW.AC, the Volkswagen Group aims to write 60 percent of the vehicle software in the next few years, providing a foundation for truly integrated end-to-end software.

“With our development work here in the Northwest, Volkswagen is building up specialist knowledge and core software competencies in cloud innovation for the entire Volkswagen Group. Our platform will enable developers from CARIAD and beyond to quickly and easily build and deploy applications, leverage real-time data, and speed time-to-market,” said Lazovski.

How will the Automotive Cloud benefit drivers in the future? For starters, it can help enhance existing services like emergency assistance or remote vehicle access, while building the foundation for new ones like intelligent navigation, smart parking and automated driving. For electric vehicles, the Automotive Cloud could power an in-car navigation system to provide charging station locations and recommended stops to avoid range anxiety. Beyond that, the cloud could harness driving and battery data generated by EVs, to help optimize and develop batteries with longer range and higher performance.

VW.AC sets the stage for a rapid digital transformation. Together with the work from CARIAD, the Volkswagen Group and its brands are being equipped to deliver hyper-personalized customer experiences, while benefiting from economies of scale.

“Our people are excited and passionate about being part of something that will shape the future,” Lazovski said.