Stellantis Software Revenue: $22.5B Annual Plan

Stellantis' Ambitious Software Revenue Plan

On Tuesday, Stellantis unveiled a significant strategy aimed at generating $22.5 billion in annual revenue through software within its vehicles. This initiative focuses on offering passengers and drivers a range of products and subscription services.

This financial target aligns with the objectives of other major automotive manufacturers, all of whom are actively exploring revenue streams beyond traditional vehicle sales, repairs, and financing.

Investment in Software and Electrification

Stellantis, formed by the merger of Fiat Chrysler and the French PSA Group, intends to invest over $33.7 billion in both software development and vehicle electrification by the year 2025.

A key component of this investment involves expanding its software engineering team to include 4,500 professionals by 2024.

Connected Car Strategy

The ultimate objective is to have 34 million connected cars on the road by 2030, enabling Stellantis to generate revenue from these vehicles long after their initial sale to consumers.

To achieve this, Stellantis will leverage strategic partnerships with companies like BMW, Foxconn, and Waymo.

Currently, the company has 12 million globally connected cars that are considered “monetizable,” defined as vehicles within their first five years of operation.

The STLA Brain Architecture

The core of Stellantis’ revenue generation plan lies in its underlying electrical and software architecture, known as STLA Brain.

This system integrates with the cloud, connecting electronic control units within the vehicle to a central, high-performance computer through a high-speed data bus.

Over-the-air software updates will be facilitated, allowing for wireless upgrades to vehicle systems.

SmartCockpit and AutoDrive Platforms

Building upon the STLA Brain, Stellantis will introduce its “SmartCockpit,” a platform developed in collaboration with Foxconn.

This platform will deliver a variety of applications to drivers, including navigation, voice assistance, an e-commerce marketplace, and payment services.

Furthermore, Stellantis has signed a non-binding memorandum of understanding with Foxconn to jointly design a family of purpose-built microcontrollers.

This partnership aims to develop four chip families, covering over 80% of the automaker’s microcontroller requirements.

Completing the software plan is “AutoDrive,” a third automated driving platform created with BMW.

All three platforms – “brain,” “smartcockpit,” and “autodrive” – are slated for integration into all new Stellantis vehicles by 2024.

Following Tesla's Lead and Addressing Consumer Concerns

Tesla pioneered the concept of software as a central element of its vehicles, utilizing over-the-air updates to introduce features like video games, performance enhancements, and upgrades to advanced driver-assistance systems.

Automakers have long recognized the potential of leveraging the substantial data collected from vehicles to offer in-car services to owners.

Increasingly, manufacturers like GM now possess the technical capabilities to provide drivers with subscription-based access to desired vehicle features.

However, this approach has faced some resistance, as consumers express concerns about subscribing to options, such as heated seats or adaptive cruise control, that were traditionally purchased upfront.

Services and Data-Driven Revenue

Stellantis intends to utilize software to provide car owners with on-demand services, subscriptions, and features.

The company will also extend its offerings to commercial customers, providing data-as-a-service and fleet management solutions.

For example, Stellantis plans to launch a usage-based insurance program through its financial divisions in Europe and North America in 2022, leveraging its data collection capabilities.

Synergy with Electrification Plans

Stellantis emphasizes that its software strategy is closely aligned with its broader plan to electrify its vehicle portfolio.

In July 2021, the company announced a goal for more than 70% of its vehicle sales in Europe and over 40% in the United States to be low-emission vehicles by 2030.