VW Group’s Cariad Software Division Had A Bad Year. Again

In three years, Cariad racked up operating losses of over $7.5 billion.

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Iulian Dnistran

By: Iulian Dnistran

Mar 17, 2025 at 4:45am ET

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Volkswagen Group's Cariad software division posted an operating loss of $2.64 billion last year.
Its revenue was $1.44 billion.
The German car group plans more layoffs at Cariad.

Cariad, “the software powerhouse of Volkswagen Group,” as stated on the company’s website, has gone from shining star to source of financial headaches in less than five years.

Last year, Cariad posted an operating loss of $2.64 billion (€2.431 billion), according to Volkswagen Group’s 2024 financial report. Granted, the software division had $1.44 billion (€1.327 billion) in sales revenue, up from 2023’s $1.17 billion (€1.078 billion), but even with more revenue, last year’s operating result was worse than in 2023 when the company posted a $2.6 billion (€2.392 billion) loss.

The trend of deepening operating losses while recording increasing revenue started in 2022 when Cariad lost $2.28 billion (€2.1 billion) on revenue of $870 million (€800 million). Between 2022 and 2024, Volkswagen Group’s software division racked up over $7.5 billion in operating losses while the revenue was nearly $3.5 billion.

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Last year, the software giant saw a higher sales revenue than in 2023 thanks to higher licensing revenue from increased sales of vehicles running Cariad software. That said, VW Group’s overall sales figures went down from 9.24 million cars in 2023 to 9.02 million–a 2.3% drop.

This is just the latest round of bad news for the German automotive giant’s software subsidiary. The market launches of the Porsche Macan Electric and the Audi Q6 E-Tron were delayed by a year because of software troubles originating at Cariad. The initial software versions that shipped with EVs such as the Volkswagen ID.4 and ID.5, which were notorious for freezing and glitching, were also of Cariad’s making. This led to a massive shakeup among the division’s top-ranking officials, with a new chief operating officer, chief technology officer and finance director appointed in 2023.

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Things eventually improved with newer and better software versions being released, but the health of the Cariad division is still far from perfect. By the end of the year, Volkswagen Group plans to lay off 1,600 people at Cariad, according to a Handelsblatt report. In its 2024 financial results, the Volkswagen Group acknowledged that a “rescaling of operations is planned.”

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Established in 2020 as the Car.Software Organization, Cariad employs nearly 6,000 people worldwide. Its main purpose is to develop a uniform operating system and a uniform electrical architecture for the Volkswagen Group’s upcoming vehicles. Initially, Cariad was supposed to develop Volkswagen’s flagship EV known as Project Trinity, but multiple delays forced the group to start from scratch.

This time around, VW will make good use of its $5.8 billion investment in Rivian and, according to Automotive News, the revamped flagship architecture will use Rivian software know-how, integrating things like Level 4 driver assistance systems.

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