Photo: Stellantis
Stellantis bets on artificial intelligence and expects software revenue to reach $23 billion a year by 2030 through services and subscriptions.
Ever since Tesla started its journey as a carmaker, the auto industry has never been the same. The old model of selling higher trims and more options is about to collapse. The new model is to keep the car running for as long as possible and make profits from software subscriptions and services. This way, the cars will retain their value for longer, while models can remain in production long enough for the development costs to be covered.
In this new territory, Tesla is still the undisputed king. Its nimble lineup endures for years with little changes in the technical department, and new features are added every quarter while the car owner sleeps in his bed. Some of them are free of charge, but for others the user must pay, upfront or through a subscription, and that generates an important revenue stream for Tesla.
Now, Stellantis wants a piece of the pie too and wants its cars all fitted with artificial intelligence (AI) software, starting as soon as 2024. The automaker presented its software strategy on Tuesday and said it expects to have 34 million connected vehicles on the streets by 2030, up from 12 million now.
Starting from 2024, Stellantis will deploy three new tech platforms powered by artificial intelligence named STLA Brain, STLA SmartCockpit, and STLA AutoDrive, respectively. For that, the automaker will extend existing ties with technology giant Foxconn, as well as those with Alphabet’s Waymo. BMW will also be onboard with this endeavor, specifically for the STLA AutoDrive autonomous driving platform.
According to Stellantis’s CEO Carlos Tavares, the software business is expected to generate high margins, like the ones in the tech industry. These high margins are less common in the traditional automotive business. Stellantis plans to generate around $4.5 billion (4 billion euros) in additional annual revenues by 2026 and around $23 billion (20 billion euros) by 2030 from software-enabled product offerings and subscriptions.
Not only the three software platforms will make money for Stellantis, but they will also bring value to customers, through longer service and higher resale values. The services and subscriptions will also be “uniquely brand-specific”, to further differentiate the company’s 14 brands. Stellantis strategy will include over-the-air software updates that will enhance vehicle capabilities. For instance, Dodge owners will be able to receive performance upgrades, while Alfa Romeo vehicles could get a sportier driving experience.
In this new territory, Tesla is still the undisputed king. Its nimble lineup endures for years with little changes in the technical department, and new features are added every quarter while the car owner sleeps in his bed. Some of them are free of charge, but for others the user must pay, upfront or through a subscription, and that generates an important revenue stream for Tesla.
Now, Stellantis wants a piece of the pie too and wants its cars all fitted with artificial intelligence (AI) software, starting as soon as 2024. The automaker presented its software strategy on Tuesday and said it expects to have 34 million connected vehicles on the streets by 2030, up from 12 million now.
Starting from 2024, Stellantis will deploy three new tech platforms powered by artificial intelligence named STLA Brain, STLA SmartCockpit, and STLA AutoDrive, respectively. For that, the automaker will extend existing ties with technology giant Foxconn, as well as those with Alphabet’s Waymo. BMW will also be onboard with this endeavor, specifically for the STLA AutoDrive autonomous driving platform.
According to Stellantis’s CEO Carlos Tavares, the software business is expected to generate high margins, like the ones in the tech industry. These high margins are less common in the traditional automotive business. Stellantis plans to generate around $4.5 billion (4 billion euros) in additional annual revenues by 2026 and around $23 billion (20 billion euros) by 2030 from software-enabled product offerings and subscriptions.
Not only the three software platforms will make money for Stellantis, but they will also bring value to customers, through longer service and higher resale values. The services and subscriptions will also be “uniquely brand-specific”, to further differentiate the company’s 14 brands. Stellantis strategy will include over-the-air software updates that will enhance vehicle capabilities. For instance, Dodge owners will be able to receive performance upgrades, while Alfa Romeo vehicles could get a sportier driving experience.
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