European Automakers Abandon In-House Software, Turn to Partnerships for Survival

Faced with the high costs, heightened complexity, and talent shortages of the software-defined vehicle (SDV) era, European automakers are abandoning their "in-house-only" development strategies. Stellantis has put its Level 3 autonomous driving project on hold due to cost and technical bottlenecks, opting instead to rely on aiMotive, a company it acquired. Volkswagen’s software subsidiary Cariad has repeatedly missed deadlines, delaying the launch of multiple electric models and forcing the automaker to partner with external firms such as China’s XPeng and America’s Rivian. BMW has also teamed up with India’s Tata Technologies to co-develop software. Industry research shows that more than half of European automakers now view collaboration as essential for survival. However, reliance on external technology introduces new risks: diminished differentiation, loss of control over core technologies, and increased financial pressure. Experts note that automakers are shifting from being “full-stack controllers” back to “core integrators.” While collaboration has become inevitable, the key challenge for European automakers remains how to maintain competitiveness while sharing technology.