Stellantis Banking on $22.5 Billion From In-Car Software Purchases by 2030
Subscriptions and over-the-air updates are key to the auto group’s revenue game plan.
Stellantis is joining what seems like every other automaker in targeting revenue from software updates and subscription services—in this specific case, the auto group is expecting $22.5 billion by 2030. In-car purchases are key here, and they often make the hardware that's already in place even more capable. It's good for business, but depending on who you ask, it's not always viewed as good business.
"Within three years, 100 percent of Stellantis vehicles will be OTA updatable," said Stellantis CEO Carlos Tavares at the company's Software Day event held on Tuesday. "Software is one of the key pillars of our sustainable future at Stellantis."
To achieve this goal, the company has partnered with a handful of other companies like iPhone manufacturer Foxconn, Google's autonomous driving subsidiary Waymo, and rival automaker BMW. The latter made news recently given its plan to charge a subscription for the use of pre-installed equipment like heated seats. All of these partnerships add up to more money being spent on features after a vehicle is purchased, a relatively new concept not all new car buyers are on board with.
Stellantis Software VP Mamatha Chamarthi explained these sorts of upgrades won't be limited to satellite radio or GPS maps for off-roading. She indicated that customers will be able to wirelessly purchase updates that increase the horsepower of vehicles in the Dodge lineup and improve the towing performance of Ram trucks, among other brand-related upgrades.
"Dodge is developing performance upgrades—launching actually next week—including driver tuneable software that will deliver an immediate horsepower boost while retaining the car's emissions compliance," Chamarthi said during her Software Day presentation. "Software will also enable Alfa Romeo to enhance the sportiness and bring the driver-centric experience to the next level."
As Chamarthi stated, some of these OTA purchases are coming sooner than others, and there's going to be a variety of things on offer—not just new maps for the navigation or stations on the radio. Whether or not this planned variety of offerings actually generates the revenue the company anticipates is up for debate, however. That being said, Tavares says the revenue gained through the sale of these new features will be re-invested in offering even more of them.
So when it comes to Stellantis, the "pay as you play" business model might be inescapable.
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