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Volkswagen is walking away from a €1.5 billion ($1.7 billion) investment in its automated driving partnership with Bosch as the German automaker pushes ahead with a sweeping cost-cutting drive, according to local media.
The move comes days after reports that Volkswagen is considering closing four factories in Germany and cutting up to 100,000 jobs as part of a broader effort to restore its competitiveness.
The partnership, launched in 2022 through Volkswagen's software unit Cariad, was intended to develop driver assistance and autonomous driving software for the group's brands.
German newspaper Bild, citing multiple sources, reported that the project failed to meet expectations despite the massive investment. Internal assessments reportedly concluded that the technology was not competitive enough.
Volkswagen is expected to terminate the partnership under the existing agreement, with the process not due to be finalized before Monday, the report added.
The automaker is also preparing to replace Bosch as it looks for a new supplier of hardware and software for future driver assistance and automated driving systems. Bild reported that Volkswagen is evaluating potential partners and expects to sign a replacement contract by September.
The reported split with Bosch comes as Volkswagen prepares a broader restructuring that could reshape the company.
According to Reuters, the automaker is considering shutting four factories in Germany and cutting up to 100,000 jobs worldwide in what could become the biggest overhaul in the company's history. The proposals are expected to be discussed by Volkswagen's supervisory board on July 9.
The restructuring is aimed at tackling slowing demand in Europe, rising competition from Chinese automakers, and U.S. tariffs. Manager Magazin also reported that Volkswagen plans to cut planned investment by about 15% to just over €130 billion over the next five years while exploring a broader reorganization of the group.
Volkswagen has not confirmed the reported measures, saying the proposals remain under discussion and will be decided by the company's governing bodies. The automaker has acknowledged that its current business model is no longer sustainable for all of its brands in its present form.
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