Automaker Stellantis expects threefold increases in its connected vehicles — featuring GPS, infotaintment systems, driver assistance capabilities and other tech — from 12 million today to 34 million by 2030 to add $22.5 billion in annual revenue from software services and subscriptions.
The company joins other automakers in looking to services as a substantial revenue generator that will also increase its opportunities for market diversification, according to a CNBC report Tuesday (Dec. 7).
“Software will improve our business model, disconnecting hardware from software … shifting the center of gravity of our business,” Stellantis CEO Carlos Tavares said Tuesday during the company’s Software Day, CNBC reported.
Increased revenue from services for those connected vehicles could double what Stellantis makes today, CFO Richard Palmer said in the report. BMW, General Motors and Ford Motor Company have made similar proclamations about the potential of services in boosting their bottom lines, a la Tesla.
Stellantis said expects “a majority” of its new vehicles to be capable of automatic, over-the-air updates by 2024, according to the CNBC report. Vehicles that update automatically show promise when it comes to recurring revenue through subscriptions for video entertainment, driver-assist features and more.
Stellantis debuted software-enabled technologies on Jeep models with new GPS maps for off-roading; concierge services for drivers; better vehicle service scheduling; and upgradeable in-vehicle technologies for video and gaming entertainment as well as driver-assist features, among others during Software Day. Those updates will increase the vehicle’s lives and generate higher residual resale values, said Tavares.
The company plans to hire more software engineers to develop new technologies in-house as part of a 30-billion-euro (almost $34 billion) investment in “advanced technologies” and vehicle electrification.
Stellantis has also signed a non-binding memorandum of understanding with iPhone maker Foxconn to create a partnership intended to design a suite of new semiconductors to support Stellantis and third-party customers and partnered with BMW and Alphabet’s Waymo on advanced driver-assist systems.
Related: Stellantis, Foxconn Team On In-Vehicle User Experience
In May, Stellantis and Foxconn formed Mobile Drive, an allegiance focused on new in-vehicle user experiences with advanced consumer electronics, HMI interfaces and services.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More