‘Software-enabled’ product offerings and subscriptions to drive Stellantis revenue
Multi-brand behemoth Stellantis has detailed its future software strategy that the business estimates will generate around €20 billion (approximately $31.7 billion Australian dollars at today’s market rates) in incremental revenue by 2030.
Approximately €4 billion is expected annually by 2026, generated by software-enabled product offerings and subscriptions.
To support this strategy, Stellantis has outlined in investment in excess of €30 billion planned through to 2025, to ‘execute software and electrification transformation’.
Stellantis is the parent of brands such as Peugeot and Citroen, Jeep Chrysler, Dodge and RAM and Italian household names, Fiat, Alfa Romeo and Maserati. The human hardware reuired for the initiative includes 4500 in-house software engineers to be employed by 2024, with a dedicated Software Academy enhancing this process.
Subscription services are expected to play a larger part in auto brands’ revenue mix and the industry transitions to BEV platforms and more integrated services and technology.
The fruits of labour
Stellantis’ financial and resource investments will support the targeted ’34 million monetisable connected cars’ that are expected on roads by 2030. The company claims that post 2024 many of these new vehicles will be fully updatable ‘over-the-air’ (OTA).
Currently, Stellantis says it has 12 million monetisable vehicles on the road. For reference, Stellantis defines ‘monetisable’ as the ‘first five years of a vehicle’s life’.
Underpinning these advances will be three all-new, artificial intelligence powered tech platforms that will be deployed at scale from 2024: STLA Brain, STLA SmartCockpit and STLA AutoDrive.
STLA Brain is considered the heart of this transformation to customer-centric services, according to Stellantis.
An electrical/electronic (E/E) and software architecture, STLA Brain is fully OTA capable and cloud-integrated. It is said to connect the vehicle’s multiple ECUs with a central ‘high-performing computer’ via a high-speed data bus, allowing developers to create and update features and services without the need to wait for new hardware. This, says Stellantis, will dramatically reduce costs for customers and Stellantis itself.
STLA SmartCockpit is the customer-vehicle interface that will ‘seamlessly integrate with the digital lives of vehicle occupants to create a customisable third living space’. Developed as part of the Mobile Drive joint venture between Stellantis and Foxconn, STLA SmartCockpit offers AI-based technology and applications, including expected services such as navigation and voice assist, but extending to e-commerce and payment services.
Another proposed service is the ability to offer usage-based insurance programs via captive finance arms in Europe and the United States. Given the increasing consumer interest in finance and insurance support detailed in our recent Journey to Vehicle Ownership 2021 whitepaper, this could form a key competitive advantage at the OEM level, though companies such as Australian start-up KOBA insurance are already in-market with a brand-agnostic pay-per-kilometre offer.
STLA AutoDrive, which has been developed with BMW, could bring autonomous driving back to the automotive conversational forefront as it offers Level 2, Level 2+ and Level 3 capabilities that can be continuously upgraded over-the-air.
“Our electrification and software strategies will support the shift to become a sustainable mobility tech company to lead the pack, leveraging the associated business growth with over-the-air features and services, and delivering the best experience to our customers,” said Carlos Tavares, Stellantis CEO.
“With the three all-new AI-powered technology platforms to arrive in 2024, deployed across the four STLA vehicle platforms, we will leverage the speed and agility associated with the de-coupling of hardware and software cycles.”
Stellantis used its EV Day in July 2021 to define its electrification plan, which targets more than 70 per cent of European and more than 40 per cent of US-based sales into low emission vehicles by 2030. However, the group recently refused to commit to a proposed combustion ban from 2040, indicating it will still hedge its propulsion bets for the time being.
