Monday, January 24

Subscriptions come to cars: Stellantis Group expects to earn an additional € 20 billion per year thanks to software updates

The automotive industry is transforming in a profound way and with surprising speed. Circumstances demand it. The electric car is a valuable tool within the framework of a global strategy that pursues minimize polluting emissions. And the development of the autonomous car is being propelled in a remarkable way by advances in artificial intelligence and connectivity.

Given the circumstances, the ‘hardware’ of cars, understood as the set of their physical components, is losing relevance at the same speed at which the software and services linked to the automobile industry are acquiring it. The Stellantis group just pronounced, and your bet leaves no room for doubt: software is going to be a key source of income for car manufacturers. And, furthermore, it will be in a very short time.

This business conglomerate brings together relevant brands such as DS, Citroën, Peugeot, Fiat, Alfa Romeo or Chrysler, among many others, and Carlos Tavares, the group’s general director, assured a few minutes ago that they will all go hand in hand with an ambitious goal common: increase Stellantis annual income by no less than € 20 billion by 2030 thanks to the push of the software updates that your cars will receive.

Goal: improve user experience and catapult revenue

The figures handled by the Stellantis group are dizzy. By 2025 it will invest more than 30 billion euros to face the transformation of its vehicle portfolio necessary to deploy the massive electrification that is already underway. And also to make possible the updates of the software of the cars that, on paper, will allow all the brands of the group to notably develop their global performance.

In this context the term ‘performance’ is not limited only to its performance on asphalt; conditions all the sections that affect in any way the experience that users have. And it is that what Stellantis proposes us is that «our cars are not only a resource to move us from point A to B; too must be a custom space in which we can develop our productivity, and even enjoy our leisure moments.

According to Stellantis, in 2030 there will be approximately 34 million connected and monetizable cars. There is that

This is the context in which software updates are called to have an importance in cars similar to what they currently have in our mobile phones and computers. When our car receives one of them, it will put in our hands, at least in theory, capabilities that I did not have beforeTherefore, the software improvements will not be limited only to correcting those errors that have been identified.

According to Stellantis in 2030 there will be approximately 34 million connected and monetizable cars. And by 2024 virtually all new vehicles will be remotely upgradeable. One of the important characteristics that these software updates will have is that they can be deployed via OTA (Over-The-Air), so they will reach the cars wirelessly and without the need to take them to a workshop or connect them to a computer.

Stellantis has not yet released details about the software updates that will be coming to its cars in the next few years. We do not know in what price range they will move, but it has confirmed that it will make available to its customers various subscription services, and also that what it seeks, in short, is to disconnect the software development cycle from the hardware evolution cycle.

To achieve this, it plans to launch frequent OTA software updates, so that in 2026 they will arrive at least every three months, and from 2030 will be much more frequent: «They will arrive almost constantly», assured one of its executives. Although they have not confirmed it, this strategy invites us to anticipate that subscriptions will possibly give users access to updates temporarily, so that to continue updating a vehicle it will be necessary to sustain the subscription over time.

From 2030 OTA updates will be very frequent: “they will arrive almost constantly”

It is also possible that whoever buys a car from one of the Stellantis brands can pay on time for a software update that will deploy a package of specific improvements to their vehicle. We will tell you more as soon as we have more information about the subscription modalities that this automotive group is considering. Clearly we are about to witness very deep changes in the automotive industry, and may not be to everyone’s liking.

Two interesting notes before finishing. Stellantis has reached an agreement with Foxconn that will allow the latter to develop four new families of chips that will cover more than 80% of the needs of semiconductors of this group from 2024. And that same year, three new technological platforms will also be available that will seek to develop the artificial intelligence of their cars and favor the large-scale deployment of the OTA updates to which we have dedicated most of this article.

More information | Stellantis