Automotive: Stellantis adopts a “software” strategy, but the essential is elsewhere – La Tribune

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Born last January from the merger between PSA and Fiat, Stellantis continues to identify elements of a strategic plan that is slow to arrive. After the electrification strategy announced last July, it is the turn of the Software plan to be disclosed. As a reminder, software will, in the coming years, overhaul the automotive architecture to allow it to accommodate new technologies such as connectivity and autonomy. This is also one of the foundations of Tesla’s success, which is capable of creating a new experience on board. According to the PwC firm, Software will constitute up to 60% of the automotive value chain in 2030. A new technological brick for Stellantis, which should bring it up to 20 billion euros in figures of business by 2030 (the group weighs 134 billion euros in turnover) and record an operating margin in line with the standards of “tech companies”, in other words, double-digit profitability.

Become a “tech company”

But Stellantis does not specify the extent of the expected profitability. Moreover, the group does not disclose the amount of investment planned in this activity either, since it considers that it is inseparable from that of electrification, the amount of which by 2035 is expected to be 30 billion euros. Only indiscretion, the automotive group announces that it will have 4,500 software engineers by 2025. Even this figure does not say how many will be recruited compared to the current workforce.

However, Carlos Tavares considers that the software is a major strategic shift for Stellantis. “Our electrification and software strategies will accelerate our transformation to become a leading ‘tech company’ in sustainable mobility,” he said. Personalized customer experience, monetization of data over the first five years of the car’s lifecycle, subscriptions, on-demand services, customer marketing … there are many sources of revenue, according to Stellantis.

From the cloud to the autonomous car …

Three electronic platforms will be launched in 2024. They will have three skill levels. The first, STLA Brain, will completely rethink the electronic architecture of cars by centralizing data management around a high-performance central computer, which will itself be connected to the cloud not only to supplement its computing power, but also to access updates. This first concept thus overhauls the articulation between all of the car’s equipment, the controls of which will now be controlled by a single element.

Called STLA SmartCockpit, the second platform will increase the level one notch since it will allow the adoption of a “customizable living space”. It will allow better management of digital connectivity interfaces. Finally, the last platform, STLA AutoDrive, in collaboration with BMW, should make it possible to accommodate level 2 autonomy functionalities, up to the 3 rd level (on a scale of 1 to 5).

Proof that Stellantis has acquired a planetary scale with its eight million potential sales (i.e. outside the Covid period), the group has signed partnerships with major partners. In addition to BMW, it will design microcontrollers with Foxconn (the subcontractor manufacturer of the iPhone), and develop artificial intelligence with Waymo (the autonomous car subsidiary of Google).

Software, the surprise guest of the automotive revolution

With these announcements, Carlos Tavares is in tune with a sector increasingly turned towards the software. According to PwC, the software will contribute to 60% of the value chain of the automotive industry by 2030. This technological brick has also been one of the major structural turning points in the automotive industry this year with the ‘announcement last January of the Volkswagen plan, which should make software one of the spearheads of the fight against Tesla for the next 10 years. The German group has created a dedicated structure with a target of 11,000 software engineers by 2025. For its part, Renault responded by launching the Software Republic. The French automotive group thus prefers to pool research costs with other expert companies.

Electric car: Renault sets itself apart from the Tesla model and assumes

Volkswagen has launched

Here, Stellantis chooses a middle path between 100% integrated research and an ecosystem (Carlos Tavares wants to complete his team of engineers from a Software Academy). But the group did not communicate on the essential: the operating system. This is the system that controls all the applications and equipment, a kind of automotive Windows. For the experts, the stake of the software war which will rage in the automobile industry will be played primarily around the possession of a BONE or its sharing, like an Apple and its iOS or a Samsung that uses the same BONE (Android) than other phone manufacturers. a BONE “owner” guarantees the possibility of creating a differentiating universe, but it is extremely expensive to develop.

Only Tesla has such a solution of its own and allows it to considerably improve the driving experience and life on board. From this perspective, Elon Musk’s business is positioned for years of traditional builders. It is to follow this model that Volkswagen has announced that it will develop its own OS. Stellantis promises an answer for later … Perhaps on the occasion of its strategic plan?

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