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Automaker Stellantis plans to generate about $22.5 billion (20 billion euros) in incremental annual revenue from software services and subscriptions by 2030, the company announced Tuesday.
Driving the growth will be an increase in the automaker’s so-called connected vehicles — stocked with GPS, infotainment systems, driver assistance and other technologies — from 12 million today to 34 million by then, according to Stellantis.
Stellantis, which is the world’s fourth-largest automaker, is the latest company to target a substantial increase in services revenue to better diversify its market opportunities and earnings.
Other automakers – from BMW to General Motors and Ford Motor – have announced similar measures following the recent growth and popularity of Tesla. The EV automaker is considered an industry leader in services and technologies, offering remote, or over-the-air, updates for its vehicles years ahead of others.
Stellantis said it expected “a majority” of its new vehicles to be capable of OTA updates by 2024.
Vehicles capable of over-the-air updates are viewed as key for automakers to generate recurring revenue through new technologies and subscriptions for everything from video entertainment to driver-assist features.
Software services was part of the automaker’s previously announced plan to invest 30 billion euro in advanced technologies as well as vehicle electrification.
Stellantis said it expects to use those funds to hire more software engineers who can develop new technologies in-house as well as through partnerships with other companies.
The company on Tuesday also announced it has signed a non-binding memorandum of understanding with iPhone maker Foxconn to create a partnership intended to design a family of new semiconductors to support Stellantis and third-party customers.
Stellantis also has partnerships with BMW and Alphabet’s Waymo developing advanced driver-assist systems to combat Tesla’s Autopilot and other systems.
Stellantis is the merged automaker of Fiat Chrysler and France-based Groupe PSA. It has 14 individual auto brands such as Alfa Romeo, Chrysler, Fiat, Jeep and Peugeot.
The company announced the plans ahead of a “Software Day” happening Tuesday with Stellantis CEO Carlos Tavares and other executives.