Page 46 - EE Times Europe March 2022

46 EE|Times EUROPE

AUTOMOTIVE SOFTWARE
Stellantis Goes All In With Its Software Strategy

By Egil Juliussen

any auto manufacturers have software platform transformation is com- ECU architectures for all Stellantis brands and
announced ambitious plans for pleted. The risk is significant development some models. This will undoubtedly happen
adding software platforms and cost over the next four to five years. because of the economics of software plat-
Mexpertise to their future automo- Stellantis estimates that 80% of software forms, as development costs are covered by
tive product portfolios — and some are well platforms can be shared among brands, with sales and profits on new sales are high.
on their way. Many are following in the wake 20% requiring brand-specific software —
of Tesla, the gold standard for successful mostly related to user interfaces. REVENUE GOALS
software platforms. A key software goal is decoupling software Stellantis forecasts that the addressable
from hardware platforms. Hardware-software automotive software market will surpass
Stellantis aims to own much decoupling has become standard procedure €200 billion in 2030. The company also
due to its many advantages. The latest advan-
released some software revenue goals along
of the software value chain tage is the potential to swap out chips when with its current software revenue. (The 2030
goals are summarized in the table.)
supply chains are disrupted.
for its brands. Nearly all Stellantis is clearly aiming to own a signifi- Current software revenue totals
auto OEMs are on this path, cant portion of its software value chain for all €400 million from 400,000 subscribers, or an
average of €1,000 per subscriber. Stellantis
of its brands. Nearly all auto OEMs are on this
adding software expertise to path, adding software expertise to their core has 12 million monetizable vehicles. Stellantis
their core competencies. A key competencies. said its connected cars will be viable software
customers only in the first five years of use.
An important factor in value creation is the
goal is decoupling software ability to perform over-the-air (OTA) software The current average revenue per monetizable
updates. Stellantis executed more than
vehicle is only €33.
from hardware platforms. 6 million OTA updates in 2021, most aimed at It’s telling that Stellantis understands
Chrysler brands. the market dynamics of automotive software
It is also seeking to use software as a brand revenue and is being realistic about what
In early December, Stellantis released its differentiator. That’s easily said but harder to portion of its connected car will create soft-
strategy for moving to a software-defined accomplish, especially given that most auto ware revenue.
platform for all its brands and models. OEMs are using similar tactics. For 2030, Stellantis projects that mon-
Stellantis released considerable information Platform goals include achieving long-term etizable vehicles will grow to 34 million.
on its overall strategy during its Software Day cost savings compared with current dedicated Estimates for subscribing customers by
event (bit.ly/3KHN7X0).
Stellantis is the name of the company that
Stellantis Software Strategy
merged Fiat-Chrysler Automobiles and PSA Topic Key Information Other Information
Group. The merger combines 14 auto brands. Stellantis • Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Fiat, Jeep, • Stellantis: 2021 merger of Fiat-Chrysler
Chrysler, Dodge, Jeep, and Ram represent its brands Lancia, Maserati, Opel-Vauxhall, Peugeot, Ram Automobiles and PSA Group
strongest U.S. brands, along with Citroen, • Common software platforms used by 14 brands • 80% shared, 20% tailored to brands
Fiat, Opel, and Peugeot in Europe. The table • Decoupled hardware and software platforms • Layered software architecture
• For Stellantis brands
Software
• Own a large portion of software value chain
at right summarizes the automaker’s software strategy goals • Value creation from feature and functional OTA updates • Stellantis: 6M+ OTAs in 2021
strategy. • Software as brand differentiation • Differentiation from competitors
Stellantis’s software strategy represents • Long-term cost savings versus dedicated brand ECUs • Leverage software platform economics
a transformational change largely planned Stellantis 2030 software goals: Current software status:
• Monetizable vehicles: 12 million
• Monetizable vehicles: 34 million
as one big step, with first results arriving in Software • Subscribing customers: Not available • Subscribing customers: 400,000
2024. Other auto OEMs are moving to revenue goals • Incremental software-enabled revenue: €20 billion • Software-enabled revenue: €400 million
software-centric platforms in incremental • Revenue per customer/year: Not available • Revenue per customer/year: €1,000
steps that take much longer to implement. • Average revenue per vehicle/year: €588 • Average revenue per vehicle: €33
Though ambitious, the potential benefits will Software • Software services and subscriptions: Monthly, yearly • Telematics and connectivity services
be worth the risk, assuming minor glitches in business • Software features on demand: Used when needed • Audio, Wi-Fi, streaming music, Fire TV
• Data as a service: Many emerging opportunities
• Usage-based insurance
segments
execution. The progress of Stellantis’s soft- (tailored to • Fleet services: Leader in Europe, strong in North America • Stellantis miles rewards program
ware story therefore merits watching. brands) • Vehicle pricing and resale value: Feature-function updates • OTA, ADAS, infotainment, connectivity
• Conquests, service retention, and cross-selling • Creating competitive vehicles
• STLA Brain: Available in 2024 • Two-year deployment cycle
STRATEGIC GOALS Three • STLA SmartCockpit: Available in 2024 • Infotainment-centric; AR included
A transformative strategy is needed to Al-based tech • STLA Auto Drive: Available in 2024 • Including L1, L2, and L3; L4 & L4+ later
• Service-oriented architecture
manage software requirements for 14 distinct platforms • Tech platforms deployed across four vehicle platforms • Favored software system framework
• Small, medium, large, and frame
brands — perhaps the largest number of • STLA Auto Drive Strategy: Waymo for L4, L4+, and L5 • BMW for L2+ and L3
diverse brands of any auto OEM — across Partners • Chips: Create four new chip families with Foxconn • Cover 80% of Stellantis chip needs
price ranges and vehicle segments ranging Summary • Excellent big picture strategy: Software-centric plans • More details needed
from consumer to commercial vehicles. This “Monetizable vehicles” is based on five-year rolling connected vehicle parc
software complexity will yield major cost Currency conversion: €1 = US$1.13
savings and revenue opportunities after the (Source: Egil Juliussen, December 2021)
MARCH 2022 | www.eetimes.eu