Stellantis targets $23B in additional revenues from software

MILAN — Stellantis plans to generate around 4 billion euros ($4.5 billion) in additional annual revenues by 2026 and around 20 billion euros ($23 billion) by 2030 from software-enabled product offerings and subscriptions.

Presenting its long-term software strategy on Tuesday, the automaker said it expected to have 34 million connected vehicles on the streets by 2030 from 12 million now.

Stellantis said that, starting from 2024, it would deploy three new technological platforms powered by artificial intelligence, to be named STLA Brain, STLA SmartCockpit, and STLA AutoDrive.

The automaker, formed this year by the merger of Fiat Chrysler Automobiles and PSA Group, will lean on partnerships with Foxconn Technology Group, Waymo and BMW to generate revenue from software-led products and subscriptions.

Stellantis is extending existing tie-ups with Apple’s assembly partner Foxconn and Alphabet’s Waymo self-driving unit to build the three new tech platforms by 2024.

The software push will nearly triple the number of vehicles that can generate revenue from software to 34 million.

“We don’t want to do everything ourselves,” Yves Bonnefont, Stellantis’s chief software officer, said on a call with reporters. “We are better off with partners.”

The company is also planning to boost the number of software engineers to 4,500, excluding through partnerships, with a hiring push and a dedicated academy to retrain staff members.

Stellantis is following rivals like Volkswagen in detailing plans until the end of the decade for electrification, battery supplies and now software as the auto industry prepares for tectonic shifts in how vehicles operate.

The new group, which has 12 major auto brands that include Citroen, Fiat, Jeep, Peugeot and Ram trucks is also under pressure to make good on ambitious cost savings pledged as part of the deal.

After electrification, developing software architectures to offer digital and automated-driving features that automakers can charge extra for is fast becoming the next battleground.

Stellantis, which has earmarked more than 30 billion euros in investments on electric cars and software through 2025, is leaning on partnerships more than some of its peers to navigate the transformation to a software-defined vehicle.

VW set up a standalone software business called Cariad to pool its sprawling software efforts, though it has suffered a number of setbacks in getting off the ground.

Ford hired a veteran of Tesla and Apple to spearhead digitization efforts, while Toyota’s R&D unit is preparing an operating system with over-the-air software updates it says can square off with Tesla.

By 2030, more than a fifth of automotive revenue will be software-derived, according to consultancy Capgemini.