Stellantis developed an ambitious plan on Tuesday to generate $22.5 billion in annual revenue from software in its vehicles, which can sell products and subscriptions for passengers and drivers. This goal is in line with those of its competitors—all competitors are looking for ways to go beyond selling, repairing, and financing vehicles.
Stellattis, a global automaker that merges Fiat Chrysler and France’s PSA Group, said it will invest more than US$33.7 billion in software and electrification by 2025. The investment will include hiring 4,500 software engineers by 2024.
The ultimate goal is to have 34 million connected cars on the road by 2030, and Stellattis can generate revenue from these cars within a few years after they are sold to consumers. To achieve its goals, Stellattis will rely on partnerships with BMW, Foxconn and Waymo. Today, the company has 12 million “monetizable” connected cars worldwide. Stellantis defines "monetizable" as the first five years of the vehicle's life cycle.
How does the company plan to really make money? It starts from the underlying electrical and software architecture, which it calls STLA Brain. The underlying system is integrated with the cloud, and the electronic control unit in the vehicle is connected with the central high-performance computer of the vehicle through a high-speed data bus. It will allow companies to upgrade software to vehicles "over the air" or wirelessly.
On top of this "brain", Stellatis will add its "SmartCockpit", a platform established in cooperation with Foxconn, which will provide drivers with applications such as navigation, voice assistance, e-commerce market and payment services. In addition, Stellattis announced that it has signed a non-binding memorandum of understanding with Foxconn to design a series of dedicated microcontrollers. The partnership aims to develop four chip series that will meet more than 80% of the microcontroller needs of automakers.
Finally, the third autonomous driving platform named "AutoDrive" jointly developed with BMW will complete the automaker's software plan. By 2024, all three platforms-"brain", "smart cockpit" and "autopilot" will appear in all new Stellatis vehicles.
Tesla is the first company to use software as the core purpose of its vehicles, using wireless updates to add video games, improve performance, or allow car owners to upgrade advanced driver assistance systems. But automakers have long seen the potential of using the massive amounts of data collected every day to provide car owners with in-car services.
Now, more and more automakers (such as General Motors) have the technical capabilities to actually provide drivers with subscribing to the vehicle services they may need. This move is not without controversy, because consumers are opposed to the idea of having to subscribe to options such as heated seats or adaptive cruise control, which have been paid for when buying a vehicle.
Stellantis plans to use software to provide car owners with on-demand services, subscriptions and features. It will also provide business customers with data as a service and fleet services. For example, Stellattis stated that it plans to use its data collection capabilities to launch a usage-based insurance plan in 2022, which is provided through its financial sector in Europe and North America.
Stellantis stated that its software strategy is in line with its plans for the electrification of its automotive product portfolio. Stellantis announced in July 2021 that its goal is that by 2030, more than 70% of its European car sales and more than 40% of American car sales will be low-emission vehicles.