Volkswagen and Microsoft today shared progress on the development of the Volkswagen Automotive Cloud.

The two CEOs of Volkswagen, Herbert Diess, and Microsoft, Satya Nadella, visited the Volkswagen Digital Lab in Berlin on Wednesday. They spoke to media representatives about the importance of their strategic partnership and the challenges faced in the digital transformation of the automotive and IT industries.

“Our strategic partnership with Microsoft is a key element in our efforts to develop Volkswagen into a software-driven mobility provider. With the Volkswagen Automotive Cloud, we are working on a unique solution for our customers. Our upscaling capabilities give us a huge competitive advantage in this area,” said Dr. Herbert Diess, CEO of Volkswagen AG.

“Digital technology is rapidly changing every aspect of the auto industry – from the manufacturing process to the car itself,” said Satya Nadella, CEO of Microsoft. “Our partnership will enable Volkswagen to deliver new Azure-based connected vehicle services that accelerate the company’s transformation into a software-driven mobility provider and define the future of mobility for people everywhere.”

The Volkswagen Automotive Cloud is to be extended step-by-step to further regions of the world and to be available in Europe, China and the USA – the core markets for the future full-electric, fully connected ID. model family. Volkswagen and Microsoft are also working together on first lighthouse projects for connected vehicle services, and progress has been made in the set-up of Volkswagen’s new Development Center in North America.

Volkswagen intends to expand the global footprint of its Automotive Cloud, which has previously been developed mainly for the European market, to China and the United States. Microsoft Azure with its cloud, edge, AI and IoT capabilities will continue to form the basis of the digital ecosystem. Volkswagen will use its Automotive Cloud as the core of its vehicle and service data operations.

Volkswagen is preparing its digital ecosystem for the core markets of the future ID. model family. The ID. will be the first vehicle to use the Automotive Cloud and is to be launched in Europe in 2020. Production is to start in China the same year and a member of the ID. family will roll off the production line in the USA from 2022 onwards.

Volkswagen and Microsoft are also working on first lighthouse projects for connected vehicles. They are concentrating on communication and navigation solutions as well as personalized services: These will leverage self-learning algorithms facilitating the use of services in the vehicle and offering occupants extended functions. Automated linking into telephone conferences and the transfer of prepared navigation destinations will only be the first steps, which will also include the integration of Microsoft Skype and Microsoft Office.

Progress is also being made with the establishment of the new Development Center in Seattle. Volkswagen had established this location for the development of the Automotive Cloud at the end of 2018. At the center, first developer teams are now starting on project work. Microsoft is providing support for the development of the new center in areas including the recruitment of specialists and project management.

Partnership talks continue with Ford on autonomous tech

In related news, Volkswagen on Wednesday also praised its cooperation with Ford and took pains to highlight its rival’s autonomous vehicles technology, as both carmakers explore deepening their partnership to include self-driving cars.

VW and Ford have agreed to develop a range of commercial vehicles together and explored cooperating on electric cars. VW has however so far resisted agreeing to invest in Ford’s autonomous vehicle unit.

“We are very happy joining forces on light commercial vehicles and we are exploring this further,” Volkswagen’s Chief Executive Herbert Diess said on Wednesday.

“Ford is one of the pioneers on autonomous, that is why we are talking to Ford.”