MILAN — Carmaker Stellantis on Tuesday announced a strategy to embed AI-enabled software into 34 million vehicles of its 14 brands, in hopes the tech upgrade will help it generate 20 billion euros ($22.6 billion) in annual revenues. generate by 2030.
CEO Carlos Tavares announced the move as part of a strategy that would transform the car company into a “sustainable mobility technology company,” with business growth coming from features and services linked to the Internet. That includes using voice commands to activate navigation, make payments and order products online.
The company is expanding existing partnerships with BMW on partially automated driving, iPhone manufacturer Foxconn on custom cockpits and Waymo to push their autonomous driving work into light commercial vehicle fleets.
Stellantis’s embrace of artificial intelligence and expansion of software-enabled vehicles is part of a broad transformation in the automotive industry, with a race towards more all-electric and hybrid propulsion systems, more autonomous driving features and increased connectivity in cars.
Ford and General Motors are also counting on dramatically higher revenues from comparable online subscription services. But the automakers face immense competition for monthly consumer spending from movie and music streaming services, news channels, Amazon Prime and others.
Stellantis, which formed from the combination of PSA Peugeot and FCA Fiat Chrysler, said the software would integrate seamlessly into customers’ lives, with the option of live updates offering enhanced services over time.
New products include the ability to subscribe to automated driving features, purchase usage-based auto insurance, or even increase the vehicle’s power with a tune-up to add more horsepower.
As a baseline, Stellantis generates 400 million euros in revenue from software-generated services installed in 12 million vehicles.
To meet the targets, Stellantis will expand its software engineering team from 1,000 to 4,500 in North America, Asia and Europe. More than 1,000 of the expanded team will be retrained internally.
Stellaantis also announced a new partnership with Foxconn to develop semiconductors that meet 80% of the company’s needs and simplify the supply chain. The partnership’s first microchips are planned to be installed in vehicles in 2024.
It’s Stellantis’ way of securing future deliveries of computer chips to protect against a new global shortage that has forced nearly all automakers to temporarily shut down factories.
“This will also enhance our ability to innovate faster and build products and services at a rapid pace,” Tavares said in a statement.
The automaker also said it is working on a new electrical and software system that will be used in four new all-electric vehicle platforms. The company plans to use the platforms to make small, medium and large vehicles, plus body-on-frame for trucks.