Stellantis laid out Tuesday an ambitious plan to generate $22.5 billion annually from software in its vehicles that can sell passengers and drivers products and subscriptions. The target is in line with goals from its competitors — all of which are seeking ways to make revenue beyond selling, repairing and financing vehicles.
Stellantis, the global automaker that merged Fiat Chrsyler and French PSA Group, said it will invest more than $33.7 billion through 2025 into software and electrification. That investment will include employing 4,500 software engineers by 2024.
The end goal is to have 34 million connected cars on the road by 2030 that Stellantis can generate revenue from for years after they’re sold to consumers. To reach its target, Stellantis will lean on partnerships with BMW, Foxconn and Waymo. Today, the company has 12 million “monetizable” connected cars globally. Stellantis defines “monetizable” as the vehicle’s first five years of life.
How does the company plan to actually make money? It starts with the underlying electrical and software architecture, which it’s calling STLA Brain. This underlying system is integrated with the cloud that connects electronic control units within the vehicle with the vehicle’s central high performing computer via a high-speed data bus. It will allow the company to upgrade software to vehicles “over the air,” or wirelessly.
On top of this “brain,” Stellantis will add its “SmartCockpit,” a platform built in partnership with Foxconn that will deliver applications to the driver such as navigation, voice assistance, e-commerce marketplace and payment services. Separately, Stellantis announced it signed a non-binding memorandum of understanding with Foxconn to design a family of purpose-built microcontrollers. The partnership is intended to develop four families of chips that will cover more than 80% of the automaker’s microcontrollers’ needs.
Finally, a third automated driving platform called “AutoDrive,” developed with BMW, will complete the automaker’s software plan. All three of these platforms — “brain,” “smartcockpit” and “autodrive” will be in all new Stellantis vehicles by 2024.
Tesla was the first company to make software the central tenet of its vehicle, using over-the-air updates to add video games, improve performance or allow owners to upgrade the advanced driver assistance system. But automakers have long seen potential in using the vast amount of data collected daily to offer in-car services to owners.
Now, an increasing number of automakers such as GM have the technical capability to actually offer drivers the ability to subscribe to services they may want in a vehicle. That move hasn’t been without controversy, as consumers push back on the idea of having to subscribe to options like heated seats or adaptive cruise control that one used to pay for at the time the vehicle was purchased.
Stellantis plans to use software to offer car owners services and subscriptions and features on demand. It will also offer commercial customers data-as-a-service and fleet services. For instance, Stellantis said that in 2022 it plans to use its data collection capabilities to launch a usage-based insurance program offered through its finance arms in Europe and North America.
Stellantis said its software strategy works with its plan to electrify its vehicle portfolio. Stellantis announced in July 2021 a goal for more than 70% of its vehicle sales in Europe and more than 40% of vehicle sales in the United States to be low-emission vehicles by 2030.