Stellantis spends $ 34 billion on software and new vehicles

DETROIT – Automakers are spending billions of dollars developing software-based cars and trucks that will enable them to sell new services to drivers and offer downloadable features to catch up with Tesla.

The youngest participant in this race is Stellantis, created this year through the merger of Fiat Chrysler and the French car manufacturer Peugeot.

Stellantis said Tuesday that it plans to spend 30 billion euros ($ 34 billion) by 2025 to develop new vehicles based on software that the company uses to provide entertainment, navigation, and other subscription services to buyers of its Can sell cars and trucks.

“Vehicles are changing and becoming part of the digital life of customers,” said Carlos Tavares, the company’s CEO, at a press conference at a meeting center in Detroit that once served as a small Chrysler assembly plant. “Stellantis is in full execution mode of its software strategy.”

Many of its competitors are already heading in that direction. General Motors is similarly working on electric vehicles, autonomous driving, and software services, of which the company expects to double its annual sales to about $ 280 billion by 2030. Ford Motor recently hired a former Apple and Tesla executive, Doug Field, to drive his own software strategy.

Stellantis hopes to be able to offer new functions “on demand” within a few years, which customers can buy to upgrade their vehicles, such as a hands-free system, better performance or improved handling. It also hopes to offer communication services that will allow drivers and passengers to do more work on the go.

The software strategy is part of a broader drive to produce electric and autonomous vehicles. Stellantis works with BMW on the development of hands-free driving technologies and with Waymo, a unit of the Google parent company, on self-driving vehicles. On Tuesday, it said it is also working with Foxconn, the contract manufacturing company best known for assembling Apple’s iPhone, to develop the computer chips it will need for its new software-based vehicles.

Stellantis aims to have an in-house software group of 4,500 developers by 2024, including 1,000 engineers already working for them.

Executives predict these services will generate $ 4 billion in additional revenue by 2026 and around $ 20 billion in revenue by 2030.

Mr. Tavares started Stellantis by acquiring a collection of 14 makes of cars, including Fiat, Jeep, Dodge, Chrysler, Opel, Alfa Romeo and Maserati.

“We’re evolving into a technology company,” he said. “Software will expand our 14 strong brands.”

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