Stellantis expects to lay out a complete strategic plan addressing lingering questions about the future direction of the company’s 14 brands across the globe in early March.
CEO Carlos Tavares said during Stellantis’ Software Day Tuesday, the automaker will put forth a plan, or plans, to shore up its business in China, where it is woefully behind rivals such as General Motors and Volkswagen.
Following the merger of FCA and PSA in January, Tavares said Stellantis, now the world’s fourth-largest automaker, would have a plan in place by summer. However, Peugeot, which has operated in China for 30 years, has seen its position steadily decline and is restructuring its operations with its longtime partner Dongfeng.
FCA was struggling to gain a foothold in China through a partnership with Guangzhou Automobile Group, one of the China’s largest automakers in China. But Stellantis was forced to close one of the two plants building Jeeps for the Chinese markets in September.
Observers say Stellantis has been slow to adapt to the Chinese government’s push for electric vehicles, and during a video conference with analysts this week Tavares acknowledged the lack of a clear China strategy hurt the company.
Stellantis did announce plans for a new venture to produces semiconductors with Taiwan’s Foxconn, signing of a non-binding memorandum of understanding to create a partnership with the intent to design a family of purpose-built semiconductors to support Stellantis and third-party customers.
“Our software-defined transformation will be powered by great partners across industries and expertise,” said Tavares said at the event.
Foxconn emerges as key partner in chips
“With Foxconn, we aim to create four new families of chips that will cover over 80% of our semiconductor needs, helping to significantly modernize our components, reduce complexity, and simplify the supply chain. This will also boost our ability to innovate faster and build products and services at a rapid pace,” he said.
Tavares noted roughly 20% of Stellantis $35 billion EV investment is tied up in software, including STLA Brain, the new electrical/electronic and software architecture launching in 2024 across Stellantis’ four battery electric vehicle-centric platforms — STLA Small, Medium, Large and Frame.
The STLA Brain developed in house by Stellantis is fully OTA capable, making it highly flexible and efficient, according to Stellantis executives.
The software strategy overall calls for the deployment of next-generation tech platforms, which build on existing connected vehicle capabilities to transform how customers interact with their vehicles, and to generate approximately $23.2 billion in incremental annual revenues by 2030 from 34 million vehicles.
Currently, Stellantis revenue from software services and subscriptions stands at about $464 million from roughly 12 million connected vehicles.
Software is key
Tavares said the software piece of the company’s strategy will support Stellantis’ effort to become a sustainable mobility tech company to lead the pack, leveraging the associated business growth with over-the-air features and services.
“With the three all-new AI-powered technology platforms to arrive in 2024, deployed across the four STLA vehicle platforms, we will leverage the speed and agility associated with the de-coupling of hardware and software cycles,” he said.
In addition, by leveraging its data collection capabilities, in 2022, Stellantis will launch a usage-based insurance program offered through the captive finance arms in Europe and North America, with the intent to expand globally.
Tavares also said Stellantis will continue to work with BMW to produce a Level Three system for autonomous driving, and Waymo on Level Four systems for autonomous system for vehicles for commercial service.