IMHO, as someone who worked in the German auto and semi industry, from my outside perspective, the main reason VW spun off Cariad to give it more independence form the crusty old mothership hoping this would lead to more innovations not possible within an org as big and as old as VW, and then they fucked it all up by putting the same crusty execs from the auto industry in charge at Cariad SW and it lead to the same dumpster fire as if it were part of VW group anyway, and then everyone was shocked things didn't work out the way they hoped.

It's a mistake I keep seeing repeated in many big German SW companies: put in charge some old geezer from traditional industry who has a PhD from a well known German uni, who hasn't wrote any code in over 20 years, and has a top-down approach to SW dev like his team was designing car engines in the '80's. Then realize things aren't working out, give him a golden parachute and hire another overpaid crusty guy just like him but from another big company to shake up the org and ultimately achieve the same "results". Rinse and repeat.

The problem is with German corporate leadership mentality which is highly traditional and therefore strictly top-down and nobody at the top is up to date on the shit-show the SW devs are dealing with in the trenches, nor do they care to address this. It's a tragedy of the commons.