Volkswagen Group is shifting funding priorities from electric vehicles to software over the next five years to close the gap with Tesla.
The automaker's latest five-year investment plan, which is worth 150 billion euros ($178 billion), sees a big increase in spending on digital technology, while the corresponding budget for electric mobility remains almost the same.
VW is "raising the tempo" when it comes to software, since the needs in this area are greater than with electric mobility, a company source told Automotive News Europe.
This suggests VW feels comfortable with the progress of its battery-powered vehicle offensive, which analysts say is already the most ambitious among any major automaker.
By 2030, VW Group plans to produce about 26 million planned full-electric cars for its brands including the luxury Audi, Porsche and Bentley marques as well as its mass-market VW, Skoda and Seat units.
Software glitches that marred the eight-generation VW Golf roll-out earlier this year as well as continued problems getting digital functions to work in the new VW ID3 electric hatchback convinced executives that more resources were needed in the field.
This prompted a decision by VW Group's supervisory board to increase the amount of software developed in-house to 60 percent from a current 10 percent by 2025, a task now given to the new Car.Software Organisation (CSO) that became an independent subsidiary at the start of January.