Stellantis wants to equip cars with AI to increase its revenue

MILAN – Automaker Stellantis on Tuesday announced a strategy to embed AI-enabled software in 34 million vehicles across its 14 brands, hoping the tech upgrade will help it generate € 20 billion (22, $ 6 billion) in annual revenue by 2030.

CEO Carlos Tavares announced the move as part of a strategy that would transform the automotive company into a “sustainable mobility technology company”, with business growth coming from internet-related features and services. This includes the use of voice commands to activate navigation, make payments and order products online.

The company is expanding its existing partnerships with BMW on partially automated driving, iPhone maker Foxconn on custom cockpits and Waymo to expand their autonomous driving work to light commercial vehicle delivery fleets.

Stellantis’ adoption of artificial intelligence and the expansion of vehicle software is part of a broader transformation of the auto industry, with a race towards more fully electric and hybrid propulsion systems, more driving features. autonomous and increased connectivity in automobiles.

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Ford and General Motors are also expecting a dramatic increase in revenues from similar online subscription services. But automakers face immense competition for monthly consumer spending from movie and music streaming services, media, Amazon Prime, and others.

Stellantis, which was formed from the combination of PSA Peugeot and FCA Fiat Chrysler, said the software will integrate seamlessly into customers’ lives, with the ability for over-the-air updates providing enhanced services. over time.

New products will include the ability to subscribe to automated driving features, purchase usage-based auto insurance, or even increase vehicle horsepower with tune-up to add horsepower.

Artificial intelligence will be able to automatically park a vehicle when a driver looks at an empty spot and nods, or it will close the garage door when the driver forgets to do so, the company said. The vehicles will collect data that Stellantis will use to deliver new features.

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Yves Bonnefont, the company’s chief software officer, said Stellantis is confident people will want to purchase services directly related to their vehicles, despite the competition. For example, consumers will find value in charging packages for electric vehicles, navigation systems that link vehicles moving in the same location, and remote control of vehicles.

As a benchmark, Stellantis generates € 400 million in revenue from software-generated services installed in 12 million vehicles.

To meet the goals, Stellantis will expand its team of software engineers from 1,000 to 4,500 in North America, Asia and Europe. Over 1,000 members of the extended team will be recycled internally.

Stellantis also announced a new partnership with Foxconn to develop semiconductors to meet 80% of business needs and simplify the supply chain. The first electronic chips from the partnership should be installed in vehicles in 2024.

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It’s Stellantis’ way of securing future supplies of computer chips to guard against another global shortage, which has forced nearly all automakers to temporarily close factories.

Tavares said the semiconductor deal was the result of Stellantis’ efforts to address chip shortage issues that have plagued the auto industry. The company, he said, saw an opportunity to maintain chip supply while securing more sophisticated semiconductors that will be needed for increased software usage in the long run. “We are able to move on to the next generation of products, which will be at the highest level of performance,” he said.

Although Stellantis is bringing together partners for automated driving, chips and cockpit design, it will develop software itself as it becomes its core business, Tavares said.

The automaker also said it is working on a new electrical and software system that will go into four new fully electric vehicle platforms. The company plans to use the platforms to manufacture small, medium and large vehicles, as well as chassis bodies for trucks.

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