Volkswagen Drops $4 Billion on Development of Cloud Computing Platform for its Cars

Don't just believe the fancy buzzwords.

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Connected cars are quickly becoming a new asset for automakers to tap and they certainly realize the potential that the platform holds. That's why Volkswagen will reportedly invest nearly $4 billion (3.5 billion euros) into a new connected computing platform for its vehicles by 2020.

The platform, which is to be branded "vw.OS," is planned to be added to all Volkswagen-branded electric cars beginning in 2020. In addition to meeting the lifestyle needs of consumers buying into the emerging EV market, vw.OS will be responsible for connecting them with a line of embedded applications to handle all modernized functionality of the car.

This includes everyday features that would otherwise be developed by third parties and then later integrated by Volkswagen to become a core functionality of the car, such as its planned semi-autonomous driver aids. Using this method, the automaker would be able to control all aspects of its vehicle's next-generation sensors and cameras, allowing it to perform a kind of proprietary passive optical image recognition, the same technique used by Tesla for its Autopilot software suite.

Volkswagen claims that by connecting its fleet of cars, it would enable the manufacturer to perform over-the-air updates on its vehicles, essentially negating a vehicle from needing to visit the dealer to perform certain updates or safety functions that are related to software.

In addition to everyday features, vw.OS would open up a large marketplace for owners to allow their vehicles to work for them. Included plans are potentially open to parcel delivery services, embedded parking meters and even car sharing, which could potentially displace the current industry king of ride sharing, Uber, with its own service, dubbed "We Share" (set to tentatively launch in the second quarter of 2019). Volkswagen expects to generate around $1 billion in revenue by 2025 using its new digital services.