Volkswagen’s $1.2B AI Bet: 3 Ways It Plans to Cut Costs by 2030

Volkswagen predicts significant savings and efficiency gains through AI by 2035

Volkswagen has announced plans to invest up to one billion euros by 2030 in AI-driven vehicle development, high-performance IT infrastructure, and industrial applications. In other words, Volkswagen is using AI to expedite the development stages of new vehicle models and technologies, while also increasing its digital resilience against external risks by expanding its European infrastructure.

For example, in 2024, data from roughly 800,000 Volkswagen Group electric vehicle (EV) customers was exposed following a data breach resulting from an Amazon cloud storage system misconfiguration. Let’s look at why Volkswagen projects that its giant AI bet will save the company up to four billion euros by 2035.

1. Accelerating vehicle development with AI-powered engineering tools 

The Volkswagen Group has partnered with Dassault Systèmes — a software 3D product design, simulation, and manufacturing company — to create an AI-powered engineering environment across all its brands. This environment will accelerate development by providing engineers with virtual testing and component simulations, enabling them to optimize their designs. Volkswagen predicts that its partnership with Dassault Systèmes will shorten its group brands’ product development cycle to 36 months, marking a minimum 25% improvement. 

Hauke Stars, Member of the Board of Management for IT at the Volkswagen Group, highlighted how this accelerated development will benefit both the company and its customers in a release: “AI is our key to greater speed, quality, and competitiveness – across the entire value chain, from vehicle development to production. Our ambition is to accelerate our development of attractive, innovative vehicles and bring them to our customers faster than ever before. To achieve this, we deploy AI with purpose: scalable, responsible, and with clear industrial benefits. Our ambition: No process without AI.”

2. Boosting Volkswagen’s tech strength in Europe with smarter IT

Volkswagen also emphasized how its 1 billion euro investment into AI will support technological independence and resilience if data is stored, processed, and protected in Europe. After suffering its 2024 data breach, Volkswagen says its group-wide private cloud infrastructure will be “significantly expanded in the coming years” to facilitate more internal processing of sensitive information and solidify its protection against external risks. Volkswagen also noted that AI-powered applications strengthen cybersecurity and share knowledge across the Group through a unified data model.

3. Optimizing manufacturing with an AI-driven digital production platform across 40+ sites

The Volkswagen Group will continuously introduce new AI applications into its manufacturing processes with its proprietary Digital Production Platform (DPP) and factory cloud. This cloud, connecting more than 40 manufacturing sites, optimizes the interaction of complex processes in vehicle assembly, enhancing energy and material use efficiency while lowering CO₂ emissions and costs. The optimization of complex processes in vehicle assembly, a solution called Guided Vehicle Completion, is currently active at 13 plants across Volkswagen and Audi‘s commercial vehicle operations. Volkswagen’s DPP is described as a factory digital nervous system, facilitating a uniform rollout of new IT systems across sites.

Final thoughts

While Volkswagen has ambitious future plans for AI, the Group is already utilizing over 1,200 AI applications, with several hundred more in development or nearing release. By focusing on AI-supported vehicle development, industrial applications, and the expansion of high-performance IT infrastructures, Volkswagen is positioning itself to invest one billion euros by 2030, but save up to four billion euros by 2035.