(Bloomberg) -- Volkswagen AG is open to external partners taking stakes in the manufacturer’s new software division as traditional automakers fight to catch up with Tesla Inc. on digital features. 

Europe’s biggest carmaker could “in principle” offer equity stakes in its software unit called Cariad, Chief Executive Officer Herbert Diess said Tuesday in a video published on VW’s intranet and seen by Bloomberg News. 

While the company isn’t currently in concrete discussions on equity ties, VW is in talks with major suppliers like Continental AG or Robert Bosch GmbH to cooperate on software, Diess said. 

VW’s Cariad, set up as an agile, standalone business to pool the carmaker’s sprawling software efforts, has had a number of setbacks to get off the ground. After electrification, gaining speed on developing software architectures to offer digital and automated-driving features carmakers can charge extra for is fast becoming the next battleground. 

Deep rivalries, differing timelines and antitrust regulation concerns have so far made tie-ups between automakers a rarity, even as the industry has identified opportunities to save on costs and time. 

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