According to a report by Germany’s Bild newspaper, the decision affects a partnership launched in 2022 between Bosch and Volkswagen’s software division Cariad. The collaboration was intended to develop advanced driver assistance systems and autonomous driving software across Volkswagen’s brand portfolio.
A spokesperson for Volkswagen referred inquiries to Cariad, while both Bosch and Cariad issued a carefully worded joint response, saying they do not comment on market speculation. The statement emphasized the long-standing relationship between the companies and their shared ambition to scale automated driving technologies.
“As a matter of principle, we regularly review our development partnership and continuously assess whether it aligns with our strategic and technological goals as well as current market developments,” the statement said, adding that they do not comment on confidential discussions with partners.
Project setbacks and rising costs behind the decision
Internal reports cited by Bild suggest the joint project failed to meet expectations after roughly €1.5 billion ($1.71 billion) had already been invested. Assessments within the companies reportedly concluded that the technology had not yet reached a competitive level needed for mass-market deployment.
The Bosch partnership had been seen as a key pillar of Volkswagen’s autonomous driving roadmap, aimed at accelerating its transition into software-defined vehicles. However, the evolving complexity of the technology and rising development costs appear to have slowed progress.
The report also indicated that the termination process would follow contractual terms, with a formal exit not expected before Monday.
Search for a new partner amid strategic reset
Volkswagen is now reportedly exploring new suppliers for both hardware and software systems needed for future driver assistance technologies. A replacement partner is said to be under consideration, with a new contract potentially targeted for September.
The shift reflects a broader recalibration within the company as it seeks to streamline operations and refocus investment priorities.
The development comes shortly after separate reports suggested the automaker may be considering major restructuring measures, including the possible closure of up to four factories in Germany and job cuts reaching as many as 100,000 positions.
Industry pressure mounts on Europe’s auto sector
The reported changes at Volkswagen underscore the wider strain facing European carmakers as they navigate high development costs, slowing demand in key markets, and the capital-intensive transition toward electric and autonomous vehicles.
For Volkswagen, the end of the Bosch collaboration may signal less of a retreat from autonomous driving and more of a reset—one aimed at finding faster, cheaper, and more scalable pathways to future mobility technology.