Stellantis N.V. (STLAM) Earnings Call Transcript & Summary

Hello world from Stellantis North America. Welcome, and thank you for joining us. Software is everywhere. It is changing our lives and transformed many industries. Today, we will prove how disruptive the auto sector can be. We are not opening the wave of software into the car. We want to reinvent the notion itself of designing, engineering and operating cars. Our strategy is to disconnect the hardware and the software cycles to create a product that can evolve naturally and regularly. This approach will make the vehicle always fresh, make its value higher and our customers happier. And of course, we want to own a broader scope of the software value chain. Let's dive into our strategy with our CEO, Carlos Tavares.

Thank you, Yves. Good morning, and good afternoon, ladies and gentlemen. Welcome to the Stellantis Software Day. I trust that you and your families are well, please take care. I deeply appreciate your time and interest in Stellantis. Thank you again for that. Software strategy is one of the key building blocks of Stellantis' overall strategy, together with our EV strategy presented in July to build the most sustainable mobility for our customers. Mobility is changing. Vehicles have become an integral part of the customer's digital life with software-defined features constantly updated over the year. In alignment with Stellantis' mission powered by our diversity, we lead the way the world moves. We will present today how Stellantis is now in full execution mode at full speed on its software journey. We are committed to deliver the best experience to our customers with 3 all-new AI-powered technology platforms to arrive in 2024, with a particular focus on connectivity with our brand new E/E platform with software features constantly improving over the year. Customer experience with a purposeful cockpit and interior with an immersive experience and connection with the digital world supported by AI. And autonomous driving through our auto-drive platform. And of course, software will also support our EV strategy being deployed over our 4 physical EV platforms and e-powertrains. Software will further magnify the DNA of our 14 iconic brands, creating a unique experience to each of our customers in the fastest and most cost-efficient way. Software will improve our business model, disconnecting hardware from software cycles and shifting the center of gravity of our business towards Stellantis extended car park. We have already 12 million connected cars, and we'll reach 34 million in 2030, 6 million OTA updates in 2021. And in 2030, we will update our cars continuously, reaching 400 million updates per year. By 2026, we'll reach EUR 4 billion of revenues and EUR 20 billion by 2030. This new software business is at high dilutive margins, borderline with tech businesses margins and with traditional automotive markets. And software will support cost savings and avoidance to make Stellantis an even more efficient company. And we'll give an increased value to our customers with higher customization, longer life, higher resale value. More than EUR 30 billion of investments through 2025 to execute software and electrification transformation have been planned. We are on a rolling mode to anticipate the future. Let's see how.

Thank you, Carlos. We now have a clear view of what is at stake. We are talking about a significant growth opportunity at tech industry margins. Let's now turn to our business and tech teams. I'm so happy to welcome them on stage. Mamatha is our Head of Business and Product. Her team is leading software and hardware engineering, and Vishnu is taking care of our cockpit and connected services. Thank you so much to be with us. We will start talking about how to deliver what our customers expect. continuously magnifying the DNA of their favorite brands with our software-based features. And by the way, software is certainly one of the fastest and most cost-efficient ways to achieve brand differentiation. As you will see, we can unlock new revenue streams by monetizing our connected car park. Let's hear the specifics with Mamatha.

Thank you, Yves. Now it's my pleasure to show you how our evolving software products will add value for our customers and a sustainable economic benefit for our company. We are confident that we will achieve more than EUR 4 billion in additional revenue by 2026, and more than EUR 20 billion by 2030. This assessment is based on a realistic trajectory and it comes with margins similar to those of tech companies. Our business plan is built on 5 pillars that personalize features for our customers and fleets across our 14 iconic brands. With 12 million monetizable connected vehicles today, we define monetizable as the revenue captured within the car's first 5 years of life. That number of connected vehicles close to EUR 26 million in 2026, and EUR 34 million by 2030 with a global scale opening a world of opportunities in personalizing what, when and how our customers want these services. Let's go through each one of these areas. First, through our services and subscriptions, we will magnify the DNA of each of our 14 iconic brands. By ensuring each service and subscription is uniquely brand-specific, we intend to deepen that emotional bond between our customers and the brands they love. Take, for example, say, she is a social media manager who loves the outdoors. This hyperconnected millennial expects a fully personalized connected ecosystem that products like her vehicle constantly deliver new benefits and value through every experience. Owning a Jeep Wrangler 4xe with the latest technology is an essential part of her outdoor lifestyle. The Jeep trails off road planning subscription will be the ideal service for her. Having the ability to add new software-enabled features and the freedom to connect will provide more enjoyment as she continues to discover new adventures. With vehicle to vehicle communication capabilities, our Jeep brand community will stay connected and share adventures from the most remote locations, even without cellular connectivity. That's freedom of mobility. If the past was about increasing margins by moving customers north in hardware and trim levels, our future is about offering customers software-based services. Today, satellite radio subscriptions and connected navigation comprise the majority of our revenue in this category. We are already seeing a healthy conversion from free trials to paid subscriptions and we expect a tenfold growth by 2030. Moving to the second pillar, features on demand. We will give our customers the ability to upgrade their vehicles in real time. Here are a few examples. Dodge is developing performance upgrades, launching actually next week, including driver tunable software that will deliver an immediate horsepower boost, while retaining the car's emissions compliance. Software will also enable Alfa Romeo to enhance the sportiness and bring the driver-centric experience to the next level. And with the all-new Tonale, the instrument cluster will become part of the brand new human-machine interface. And for our Ram pickup owners, customers can increase the capability of their truck to handle greater loads. And let's talk about long road trips, the ability to customize your in-cabin experience with entertainment options like premium stereo, WiFi, streaming music or Fire TV built-in can be added easily on the fly. You can quickly see the opportunities unfolding. We are projecting annual growth of more than 60%. Our third revenue stream falls into data-as-a-service and fleet services business. With programs like Stellantis Miles rewards program that we recently announced, we understand the lifestyle choices of our customers. We are the #1 light commercial vehicle provider in Europe, and one of the largest in North America. We will leverage that leadership together with Free to Move, which is our car sharing service fleet and data services business to help fleet operators increase overall productivity while reducing total cost of ownership, continuously updating their fleets and helping manage their businesses much more efficiently. Using the aggregated data collected through the Free to Move cloud platform, we can deliver added value to all of our customers. Part of that value will be through an all new usage-based insurance program. I'm really happy to announce this program today. This will be offered through our captive financial services arm in Europe and North America, first, and later in the rest of the world. We will also continue to share data with cities, with municipalities, map providers, other technology companies and also our Tier 1 suppliers. We estimate our revenue, in this category, to have a compound annual growth rate of more than 90% through 2030. The fourth revenue stream we have identified falls into the vehicle pricing strategy and corresponding resale value. Our research shows that customers see the value in enhanced connectivity, advance driver assist systems and infotainment options, adding new content through over-the-air updates leads to a higher resale value. Some safety features like automatic SOS call assistance became standard on all of our latest platforms. According to ALG, features like these contribute to a higher residual value. Now the final pillar defines our efforts to continue creating very competitive vehicles in the market to improve conquest sales and cross selling. Today DS Automobiles very elegantly delivers on that promise. Tailored for DS customers Only You is an exclusive high-end program offering a wealth of services that are personalized using the connected car data. And of course, with customers consent, this will make the brand a lifestyle choice and transforming our customers' journey into a unique travel experience. Let me inspire you with the future of DS Automobiles. [Presentation]

I am especially fond of the Stargazer feature. On the after sales service front, owners can effortlessly access vehicle health reports, coupons and even schedule service appointment with their preferred dealer. This drives more than a 10-point increase in service retention. Additionally, we have a growing list of revenue sharing agreements with leading entertainment and technology companies. We will see an increase of more than 60% across all of these 5 pillars of revenue through 2022. We also leverage connected car data to identify quality issues faster. We have 12 million connected cars in operation today, providing us with a wealth of data, more than 3 trillion data points, generating timely actionable intelligence. Year-to-date, we have made more than 6 million over-the-air updates. In fact, these actions have contributed to Ram and Dodge brands ranking first and second in the most recent J.D. Power initial quality study. Using vehicle data for early detection of issues is not only improving overall vehicle quality and our customers' perceptions, but it's also generating EUR 1.1 billion in savings by 2030. So I'm super excited about these 5 pillars of growth and the value creation for our customers. Now let me hand it back to Yves.

Thank you, Mamatha. Thank you very much. I'm so excited, and I'm sure our customers will love it. We have 5 clear business lines that generated EUR 380 million revenue in 2021. We have strong roadmaps for each of those business lines and a clear go-to-market. By 2030, we will address a fleet of 34 million connected vehicles with a revenue ambition of EUR 20 billion. Let's now talk about the technology that supports this plan. One thing we know is that technology is constantly evolving, and we need to create future proof platforms, which is why our strategy is structured around developing open platforms that will continuously evolve. Platforms where software cycle are disconnected from hardware cycles. Platforms that are designed for their capabilities where features can be continuously added and upgraded over the year. Platforms that will become better over time, thanks to AI. With this platform, we will be fully leveraging Stellantis scale and benefit from the economics of software. Joachim can you guide through our tech platform strategy?

Thanks, Yves. I'm so excited to tell you how we are already making our future a reality. STLA Brain will be the #1 solution platform that allows us to rapidly and continuously build the leading solution in connected services, automated driving, cockpit and powertrain powered by software, hardware and AI. STLA Brain is our centralized architecture with a large central brain ECU surrounded by zone ECUs, aggregating the sensors, activators and the edge ECUs driving all the functions in the vehicle, from offboard systems, initialization, charging, vehicle access, autonomous driving, entertainment, living space and drop off the passengers and finally, parking the vehicle. STLA Brain is a service-oriented architecture, which gives us the ability to act and react faster than ever before. It represents an end-to-end solution connecting onboard and offboard. In addition, it will have APIs to abstract and access all the vehicle sensors and activators. This plays navigation plus hardware and software layers to enable fast application development on top. These applications can access all sensors, all activators and will enable us to fully create an end-to-end solution, dynamic processing of data and workloads between the car and the cloud, and continuous software delivery will be enabled by the zonal architecture and accelerated with 5G connectivity. In the past, it was about a specific architecture for a specific set of features at SOP. The future is about capabilities. Capabilities like processing power and hardware headroom, 100% ability to update over-the-air and the data upload channels to add customer-centric solutions over the full life cycle of the vehicle. STLA Brain represents a software-defined vehicle platform of capabilities. We are on track to launch the STLA Brain in 2024 on STLA Large, the vehicle platform. We will quickly roll it out into all our vehicle platforms from small to medium, large and to frame within the 2 years [after]. Let's look into some specific domains, like cockpit, autonomous driving on top of STLA Brain. Now I'd like to bring up Vishnu to talk about his cockpit solutions.

Thank you, Joachim. Now let me take you into my technology world of creating the best ever cockpit and creating it always refreshed. Let me start with the latter first. We have over 12 million connected cars on the road today. And just this year, we have delivered over 6 million over-the-air updates to improve in-vehicle experience. This is just the beginning. We will be able to update all our software-centric ECUs inside the car. And this capability will grow to over 34 million connected cars by 2030. Let's now switch back to the topic of creating the best ever cockpit. We call this STLA SmartCockpit. Our mission is to transform your vehicle into a personalized living space. The new Grand Wagoneer with its combined 75 inches of screen space and multi-zone communication is just a taste of what's to come. The foundation of STLA SmartCockpit is the next-generation multimodal user interface. It's a more natural way to interact with your vehicle, and this is enabled by a combination of several sensors, including touch, voice, glance and gestures. Think about the possibility of you commanding your car to execute a parking maneuver, by just glancing at an open parking spot and nodding your head. Isn't that cool? That is the STLA SmartCockpit experience. The whole experience will be further enhanced with addition of augmented reality capabilities. A good example of how we are advancing towards augmented reality is in the extended heads-up display in the DS4 car today launched in Europe. Our immediate focus is in bringing new content and connected services, including streaming music, video and games and remote control features to our existing cars on the road. We are leveraging our partnerships like Foxconn Mobile Drive joint venture to help us bring consumer experience and also the consumer pace of innovation in the STLA SmartCockpit. Our ultimate goal is to make the vehicle, the most wanted and most captivating place to be, even when you are not driving. And this is enabled by focusing on stationary use cases to transform the vehicle into a personalized productivity zone, a personalized gaming station, a study center, a creative studio or even a wellness arena. The universe of connected Stellantis cars is growing by millions every year. To connect with the ecosystem of developers we are launching the space [SBK]. To spark the imagination of the developer community, we are also launching a grand hackathon with the theme of gamification. And this is backed by a $50,000 price value. Isn't that exciting? Now handing it back to you Joachim.

Thank you. Yes. I really look forward to the results of the hackathon and all these submissions and seeing the winning solution coming to our vehicles. Let me now focus on our autonomous driving developments. As Vishnu noted, working with partners is key. This is also true for our strategy for STLA AutoDrive in implementing advanced driver assistance systems and automated driving. For up to Level 3, we are codeveloping with BMW and for Level 4 and above we are partnering with Waymo. We're already selling the best Level 2 solutions in the world for up to 180 kilometers an hour with semi-automated lane change, also released this year. Just 2 months ago, we demonstrated the potential of Level 3 autonomy with our Level 3 pilot project in Europe, where the team accomplished a fully automated trip from Paris via Strasbourg to Hamburg, totaling over 1,000 kilometers of autonomy. Level 3 pilot represents European flagship innovation projects to test the viability of Level 3 automated driving on public roads. For SLTA AutoDrive, we are working with BMW. We have several hundred people working on STLA AutoDrive worldwide. We are progressing well, and we are releasing our first L3 solution in 2024, coming out of this partnership and rolling it out across our full portfolio in the years after. We have continued our collaboration with Waymo to deliver L4 automated driving fleet. Stellantis is continuing the partnership with Waymo, the world leader in Level 4 autonomous driving. We are already working with Waymo on L4-ready Chrysler Pacifica Hybrid minivan used in Phoenix, Arizona, which was the first commercial autonomous ride-hailing service worldwide. The solution was driving more miles in L4 autonomy than any other vehicle on the planet. Now Waymo works exclusively with Stellantis as their preferred partner on the development and testing of L4 autonomous light commercial vehicles. Together, we are co-creating autonomous LTVs starting with the Ram ProMaster to meet the wide range of our global customers. We are planning to deliver the first vehicle to them in 2022 for joint development. Earlier, we heard from Yves, how important AI is in our vehicles. Mastering AI is fundamental for applications like STLA AutoDrive and STLA SmartCockpit. Also, in AI, the right capabilities do make the difference. We are aggressively building capabilities. I'm happy to introduce you to Neda Cvijetic who joined us recently to lead AI.

Thank you, Joachim. And hello, everyone. My name is Neda Cvijetic. I live in the Bay Area in the heart of Silicon Valley, and I'm Head of Artificial Intelligence and Software at Stellantis. I have worked with some of the most innovative and agile tech companies in the world and in bringing that experience and that spirit into my mission at Stellantis to create breakthrough customer-centric AI capabilities for our vehicles including an autonomous driving and cockpit applications. And what I'm most excited about in this role is the tremendous scale of the transformative impact that this will have. So please stay tuned. Back to you, Joachim.

Thanks, Neda. I'm so excited that we have you as our lighthouse talent. And under your leadership, we will have wonderful AI-based customer solutions coming out of your organization. We will drive together, AI across all domains in the area of growth perception and planning in autonomous driving, voice and hyper-personalized digital assistant in cockpits in Vishnu's organization. Based on this, we will release multiple AI solutions in the coming 3 years on our existing platforms and growing even faster based on our STLA Brain platform in 2024. We will launch STLA Brain with a minimal, loveable product in 3 years from now. From all cars, we will collect data on usage and driving situations and update or even upgrade our solutions over the air. For STLA Brain, this means we will release it, for example, with an L2+ STLA AutoDrive feature. And we will upgrade it over lifetime up to an L3+ solution. In addition, STLA SmartCockpit will come, for example, with conversational speech and evolve to hyper-personalized digital assistant. With quarterly update, this means hundreds of new features and this will result in the service numbers shown by Mamatha earlier. This means we can dream up together features, even something we have never thought of yet. So vehicles and -- for 10 years after they were built. To sum this all up, we are creating the customer-centric features and services that will be continuously updated and refreshed, enhancing, creating value for all our customers in all our 14 brands. We are creating STLA Brain architecture for all our vehicles starting in 2024, together with #1 solutions in cockpit, powertrain and autonomous driving. It lets us deliver unprecedented performance to create and react quickly. We are creating a customer-centric flywheel, enabled by capabilities, platforms and data to create applications, solutions and services to delight you as our customers. Thank you. Handing back to Yves.

Thank you, Joachim. Thank you. And I'd like to thank the whole team, including Mamatha and Vishnu for sharing their visions and plans. As always, success of this strategy will be driven by execution. The good news is that our track record as a company is all about execution. Here, we want to add 2 very specific drivers. First, we have reduced complexity to a minimum with few platforms leveraged at scale, deployed quickly and continuously maintained up-to-date over the year. Second, the capability building piece is core to our plan. So let's talk about our capability road map. It is based on both building internal capabilities and decisive partnerships with tech leaders. On the internal front, and consistent with our purpose, powered by our diversity, we are building a global network of talent around the world. Software is reshaping the future of mobility. And we at Stellantis are uniquely positioned to make it happen with the scale we can leverage to deploy innovation. To make this a reality, we are creating a software and data academy, with the objective to retrain and develop 1,000-plus people in multiple roles like data analysts or scrum masters. We are hiring software talent with a global approach covering Americas, Europe as well as Asia to make sure we effectively tap into the global talent pool and create a truly global software team. We are targeting a Stellantis team of 4,500 people by 2024, not comprising the partnerships that we detailed in a minute. These partnerships will also create the opportunity for teams to develop in a truly open ecosystem, by the way. To show you some of the profiles and the skills we are attracting at Stellantis, I'd like to show you 2 videos. They are just 2 examples of talented people who decided to take the leadership role on the ambitious and exciting journey we are building together. Let's hear from them.

Hi, my name is [Marco Wringer] and I live in Schaumburg, Germany. I'm heading the [indiscernible] integration within Stellantis [indiscernible]. Before joining Stellantis I worked for some of the top [indiscernible] suppliers, as well as for one of the most iconic [medical] brands. I'm very passionate about our mission and the [indiscernible] to the cars, the most personal and complex [indiscernible] product on the planet. Bringing this product and services to the next level is one of the coolest jobs I can think of. My family and I have already experienced happily changing our own fully electric vehicle. Now I'd like to invite you joining to [indiscernible] this experience can be owned by everybody around the world.

I joined the software organization at Stellantis 2 months ago. I live in Seattle, Washington with my family. Prior to joining Stellantis I worked in the video game industry [indiscernible] with development studios in some of the biggest console, PC and mobile games in the world. And before that I spent time in both the entertainment and telecom industries in the U.S. and in the U.K. What attracted me to Stellantis was the opportunity to be part of transforming a 100-year-plus automotive giant into a global software and analytics leader. In addition, a chance to show that this software evolution affects real [historical] change is immensely exciting. We have the chance to improve accessibility and mobility for millions of people, contribute a significant [production] to the mission of electrification, develop amazing new safety features with AI, and increase the life of vehicles and their components. Lastly, the chance to create the next big entertainment and productivity platform, enabling amazing experiences for our customers is an opportunity that can't be found anywhere else.

We are thrilled to have them on board. As I was saying, the other leg of our capability building strategy is based on focused partnerships with tech leaders. We have established decisive partnership on key technology platforms to share non-differentiating content and maximize speed and efficiency. On SmartCockpit final agreement with Foxconn to create Mobile Drive has been signed, end of August. We have now obtained all regulatory approvals and are proceeding to the closing before the end of the year. Foxconn is bringing its mobile internet expertise, speed of execution and a reinforced access to the ASEAN software talent pool. On autonomous driving, Joachim explained our partnership with BMW and Waymo. We are currently working on our semiconductor strategy and I will say more about this. As you have seen, we have strong ambition and a clear roadmap to make it real. But enough with strategy and plans. Let me show you what we have in mind because it is closer than you think and more than a pure concept. It's called the Airflow. Carlos had the chance to drive and test it with the software engineers. Let's watch it together. [Presentation]

Sounds like the future is already here. Our industry is in the midst of a deep transformation. This transformation is spurring initiative, creativity, innovation and, in the end, it will help make us a better, healthier place for our customers. We, at Stellantis can lead this transformation and to discuss where we want to lead to and the magnitude of the change we are all addressing, I'll invite our CTO, Ned Curic to join me on stage. Hello, Ned. Glad to have you here.

Hi. It's great to be here with you today. Thanks for having me.

So you joined Stellantis a few weeks ago after many years at tech companies.

As you mentioned, I just recently joined from Amazon where I spent a number of years. I really enjoyed my work at Amazon where my team and I built some amazing tech and products that our customers love and enjoy every day.

What gets you excited at Stellantis? What innovation is Stellantis bringing to our customers.

Cars are very sophisticated devices. And the entire sector today is entering an immense and exciting digital transformation. Our teams are creating and innovating on so many different technological fields and technical fields, such as solid-state battery [tech] new battery charging systems, new electronic propulsion systems. We're also working on new technologies that integrate new materials, electronics, artificial intelligence. And of course, we're working on autonomous driving and inventing whole new set of future experiences.

So what do you see for the future right now?

In the next 20 years is -- we'll have an opportunity to truly redefine the cars in how we experience them. This transformation will be rapid and really big. It's truly exciting place to be for the -- any engineer, they want to work on exciting technology.

So as you're creating our overall technology strategy, how critical is software to that strategy?

Great question. Today, customers expect their cars to do more than just be cars, to be integral part of their lives. They expect cars to be always connected, to be smart, even aware of their personal preferences. Before they leave their house, for example, the cars will notify the owners if they have enough charge to get to the destination and where to charge along the way. Cars will communicate with the smart home, and will close the garage door when the owner forgets to do so. It will prime the house, set the security alarm, will configure the house climate system and so forth. When in the cars, customer will have a predictive navigation system, and will continue to consume the same content that they just enjoyed at home. It will be another level of mobility freedom for our customers -- if this is all done with software. It's the software that makes these experiences possible. Of course, we need to build the holistic systems with all the right hardware to ensure that we have all the underlying capabilities to enable the software to build the features and services, which will then turn into customer experiences.

So I say we're intensively working on our semiconductor strategy. Can you tell us a bit more about this?

Of course, well, the cars are ultimate mobile device. They're packed with technology. Vertical hardware and software integration is very critical to deliver the kind of experience that we just talked about. In the next 4 years, we will be launching close to 50 low-emission vehicles across our 14 brands. So to ensure we deliver on the customer promise, a radical platform simplification and vertical integration is really needed.

How are both our partners in this strategy?

So in addition to working with existing suppliers that we have great relationships with, we decided to partner with Foxconn to simplify our diverse semiconductor portfolio in design, 4 families of chips to cover about 80% to 90% of our semiconductor needs. As a result, we will simplify our supply chain. We will be able to interchangeably use semiconductors for different electronic modules, hence create a self-redundant supply chain system.

Thanks a lot, Ned. Thanks a lot for sharing your thoughts. Our software strategy is a huge step forward on our transformational journey to a tech mobility company. This approach will also transform our business model from a product-centric to a customer lifetime-centric approach. And it will further shift the center of gravity of our business towards recuring mobility business. It is opening up new opportunities that will translate into significant growth at attractive margins. I would like to invite Richard Palmer, our CFO, to share with us the economics of the plan.

Thank you, Yves, and good day to everyone. As my colleagues have outlined today, software is driving an unprecedented transformation in mobility, one that will progressively integrate flexible and customized mobility into our daily lives. For Stellantis, this transformation provides the opportunity to create even stronger bonds between our customers and our iconic brands and vehicles, enabling customers to upgrade and personalize their vehicles throughout their entire ownership experience. First, let's recap where Stellantis is today on its software and connected services journey. At the beginning of this year, we combined 2 very successful and experienced companies, both of which had iconic and diversified product portfolios. Both companies were in the process of expanding their software and connected services businesses, which included key offerings, and this transformation is now being accelerated. And we have a very solid foundation on which to build. We have 10 years of experience in connected services, approximately 12 million connected vehicles in customers' hands globally and 400,000 customers currently subscribing to our connected services offering. In 2021, our revenues from software-enabled services and features stand at around EUR 400 million. To quantify the opportunity for a truly global mobility provider like Stellantis, some analysts estimate there will be a total addressable market for software-enabled mobility-related services of more than EUR 200 billion by 2030. Now let's recap the 5 pillars of software revenue opportunities that Mamatha described earlier. Firstly, services and subscriptions. This includes categories such as safety and security, entertainment, navigation with live traffic and travel information and remote operations. Next, features on demand, which can be turned on and off by the customer to cater for onetime or monthly needs and which can also be regularly updated through OTA. And the third pillar is data-as-a-service and fleet services, which includes features such as usage-based insurance, and data collection for expanded services for fleet management. These 3 categories will all give rise to subscription-based revenues. The remaining 2 categories arise from the impacts that these new offerings will have on vehicle and mobility services revenues by improving our competitiveness, our price realization and customer loyalty. In addition to revenue generation, software-defined vehicles will also facilitate cost reduction. Delivering upgrades and features with over-the-air updates will quickly become the norm for all customers, and this OTA capability allows us to fix customer issues faster and at dramatically less cost than a service visit to a repair facility. By leveraging additional vehicle data from our software-defined vehicles and more frequent and convenient over-the-air updates, by 2030, we expect to benefit from over EUR 1 billion in annual cost savings. We envision significantly growing our software-enabled revenues between 2021 and 2030. Particularly in the second half of the decade, once our connected car park has access to more and more product content. We will also see a shift in the contribution of revenues from each of the 5 pillars. As I mentioned, today, Stellantis has approximately 12 million connected vehicles across the globe and the majority of the software-enabled revenues we generate come from content included at the vehicle sales. From 2024, we will start rolling out the new STLA Brain electrical and software platform in our 4 STLA vehicle architectures and the number of monetizable connected vehicles will increase to approximately 26 million by 2026. The features and subscription-based services offered on our vehicles will also increase notably, leading to a revenue opportunity estimated at around EUR 4 billion. Increases in new vehicle pricing and retail values will still account for more than half of our 2026 software-enabled revenues. However, the other categories will have begun to expand, particularly revenues from data-as-a-service and features on demand. And by 2030, the connected car park is expected to reach approximately 34 million vehicles. With this expanded car park built on the 4 common global architectures, we believe the software-related services inherent in our mobility offering could be worth incremental annual revenues of approximately EUR 20 billion. These new revenue streams will drive strong margins which will be accretive to our current adjusted operating income margins. And to be clear, these incremental revenues and accretive margins do not include revenue opportunities from Level 4 and Level 4+ autonomous driving. In this technology area, we continue to work with our partner Waymo in the development of Level 4 and Level 4+ equipped vehicles. As we make progress together, we will update the market. We believe that this opportunity can be a game changer for our LCV business and our customers globally. We are fully committed to becoming a leading sustainable mobility tech company and will execute on this transformation with more than EUR 30 billion of planned investments in electrification and software through 2025 as we announced at our EV Day in July. Above all, these software-related services will create a priceless constant connection between Stellantis and our customers. Thanks for listening. I'll now turn it back to Yves.

Thank you, Richard. Our business and tech teams are fully committed to execute these plans and eager to make it happen. We will be working at full speed to reach our 2030 ambition, a fleet of 34 million connected vehicles, generating EUR 20 billion of revenue at attractive tech margins. And we will be among the first to deliver those open tech platforms to our customers. We have now come to the end of what has been an intense presentation. Before I hand it back to our CEO, let me thank everyone at Stellantis who have worked hard through different time zones to build our strategy and start implementing it. They are not on the podium right now, but they make a true difference for our customers and for the company. Let me now welcome back our CEO, Carlos Tavares, for closing remarks.

Thank you, Yves. Software is one of the key pillars of our sustainable future at Stellantis. Stellantis enjoys 3 differentiating factors. Software will efficiently magnify our strong 14 brands. Stellantis is uniquely positioned to scale software and our proven velocity of execution and our focus on simplification will make a difference in implementation. We are indeed transforming Stellantis into a mobility tech company, delivering tech content with agile process. You could sense the deep commitment of our team to deliver on our software strategy. 3 technology platforms, an accelerated rollout on our 4 physical EV vehicle platforms, continuously upgrading vehicles over-the-air, offering new releases every quarter, ramping over-the-air update capabilities to our fleet. Within 3 years, 100% of all new vehicles will be OTA updatable. Capability building software team over 4,500 people by 2024, creating a global network of software talent around the world. With existing talents taking advantage of our diverse global engineering, upscaling more than 1,000 people through our software and data academy and hiring software talent in all regions from technology and other industries. Decisive partnerships with technology leaders, Foxconn and Waymo without forgetting our partnership with BMW, continue to drive innovation in an efficient manner. We are, in fact, codeveloping with them. Software will positively contribute to our results with EUR 20 billion of revenues by 2030 at dilutive margins in line with tech companies, powered by our diversity will lead the way the world moves. We invite all of you to the presentation of the Stellantis long-term strategic plan on March 1, 2022. Thank you, again, for your time today. I look forward to your questions.

Thank you, Carlos. Thanks to all of you for your attention. I would like now to invite Carlos, Richard and Ned to join us for the Q&A session.

[Operator Instructions] Your first the question comes from the line of George Galliers from Goldman Sachs.

I wanted to ask 2 questions, if I may. The first 1 is just sort of strategically how you think about this. I think it's reasonable to argue that software is not a core competency of traditional car companies. However, it might be argued that it is close to a core competency for some of the new entrants into the automotive market that we're seeing. So the question really is, why have you decided to develop the software internally rather than ask a partner who has software as their core competency to do the development work for you? And is there not a risk that some of the new market entrants that do have software, it's closer to a core competency, that they are able to advance more quickly than yourselves? The second question is just with respect to the revenues. Richard, I think you mentioned that they will be accretive to margins. Can you give us any indication of what the kind of drop-through would be that you would expect on the EUR 20 billion revenues from software-related services? Is it reasonable to assume that it would be an extremely high drop-through where the development investment has been made, the hardware is fitted so effectively as and when consumers sign up to these services, there's no incremental cost to yourself?

Well, thank you. Thank you for those 2 very important questions. Let me start with the first one, and then I will hand over to Richard for the second one. On the first one, first, we believe that software is core. It's a core expertise that we are now full speed developing. So there is no way we are going to consider that this can be totally subcontracted to somebody else. Reversely, we do not consider that doing everything ourselves is the right way to go because we can also enjoy great partnerships with people, who are, at this precise moment, may be more skilled than we are. So we are on a 2-path direction. First one to recognize that having strong partnerships makes total sense in terms of co-development, and that's what we have been building with some of our strategic partners like Foxconn or Waymo. So strong partnerships bring at a higher speed, a significant level of performance to our company. And then there is a mid- and long-term recognition that it has to be core to our expertise as the customer experience is moving us in that direction and we do recognize that. And we do recognize that making our customers happy is the only way to be sustainable, hence the fact that to enhance this customer experience, we need to be in control of some of those softwares. And last but not least, we also see that there is significant business that is attached to this direction, as you have seen through this presentation, which means if there is significant business then some of those expertise need to be inside of the company. So that's what we are right now doing. We are managing the shift that we see. We are managing the customer experience enhancements that we believe is absolutely necessary. And we are doing it in a 2 time window kind of approach. The short term, the midterm, the partnerships and at the same time, we are investing in our future. And as you have seen, we are investing heavily, and we are blessed, we are really blessed with one thing that eventually we did not explain enough, which is the fact that Stellantis is becoming a very attractive company for people who want to demonstrate their skills in terms of software. And we are receiving a significant number of resumes. People who understand that this company is on the move. And this company is moving in the tech direction without, of course, putting aside the fantastic history in the iconic brands and the emotions that we are able to communicate to our customers. So we want to combine those 2 things. And of course, we want to accelerate. We are on a rolling start. We are now accelerating, and that's the message that we wanted to send to you today. On the second question, Richard, would you like to take that one?

Yes. Thanks, Carlos. Well, George, I think to your point, the way we look at the margin structure, at this stage is that it's going to be strongly accretive to our current double-digit margins that we are running at and that we have indicated is our sort of medium-term sustainable margin target. So if I look at tech margins of other large tech players today, they're clearly double the sort of margins that we run out today. And I think that would be a baseline that we would be targeting for this new business. Clearly, we're looking at a fair way out here in terms of forecast. So I don't want to get too specific in terms of the margin aspiration, but it's -- I think we're pretty confident that this business area with the types of service and products that we can cluster around our mobility offering with the brands we have will allow us to have a strongly accretive margin on this -- on the EUR 20 billion of revenues that we are targeting to generate.

The next question comes from the line of Horst Schneider from Bank of America.

The first 1 that I have that relates actually to this revenue business plan that you presented until 2030, it -- just striking that the service revenues per vehicle that they are rising over proportionately towards 2030, and I just want to understand what is behind that? So if you talk about these 5 key pillars. Can you maybe provide a kind of split how the revenues split between these pillars and how the split is changing from 2026 to 2030. Is it right to assume that in these 2030 revenues, they are also out of subscription revenues included and that drives basically the value up significantly? Then the second question that I have that relates basically to this partnership that you've announced because I want to understand what is, in your view, really then a partnership and what that means? So you just buy content from these partners? Or is there any profit sharing agreement later on? So what are the details of the partnerships, for example, with BMW, I think that now the new one as well that you announced?

Those are 2 great questions. It's true that we have a very detailed plan on each of those business pillars, the 5 business pillars that you mentioned. Of course, we are trying not to unveil all the details to our competitors, but it's true that there are different dynamics of profitable growth on each of those pillars. So I would like to hand over to Yves, he is going to give you more details. And then Ned will talk to you about the strategic partnerships that you were alluding to. So Yves, could you take the first one, please?

Sure. Thank you, Carlos. So you saw in the figures that Richard shared that the share of the revenue, which is related to MSRP and retail value sales about half by 2026. Of course, as you move forward in time, the subscription part of it is going to be growing faster. And so by 2030, this proportion will look different. We don't want to disclose detailed figure at this stage. But what I can tell you is the trend is that subscription-based business will grow faster and the data and related services, such as UBI is also one of our fastest growing element in the business plan and will represent a significant share of the total value. That's what I can disclose today.

Then on a Swedish partnership, obviously, their vehicle is becoming more complicated, vertical integration is critically important. Hence, our desire -- needs and what we're going to do right now is to vertically integrate electronics with the software so we can deliver the kind of experiences that we plan to deliver next couple of years. So the Foxconn partnership is exactly that, build tenders of chips to completely simplify our supply chain and provide this vertical integration that's required. Those same family of chips will be available for others to purchase as well. So that is part of the Foxconn's relation. The BMW partnership, the core technology in autonomous driving is -- it's expensive to develop and sharing the cost of a core technology development is a great deal for us and for our partners, BMW. But then we're going to have unique developments in terms of experience, in terms of services that we build and those are the kind of experiences we're uniquely going to build for our own brands.

The next question comes from the line of Thomas Besson from Kepler Cheuvreux.

I have 2 questions as well, please. The first 1 is essentially about the reconciliation about your comments on car affordability that becomes an increasing issue with these additional revenues you expect some customers to pay. So can you help us understanding about this? And the second question is more about the perception of what you're saying. How can you make these targets more credible? Clearly, you're making very impressive returns currently. You're talking about increasing them with software earnings that would be accretive, but you're still trading on a very low multiple. So at 1 point, are you going to be able to tell us that you're going to buy your own shares that could be your best investments for your excess free cash flow versus anything else, if what you say is true and we leave the market for the time being remains skeptical?

Well, thank you, Thomas. Thank you for the very 2 thoughtful questions. I will hand over the first 1 to Yves and then let me take the second one. First of all, you are right. We are in a very highly transformative period. It's absolutely clear. And that's the reason why we are here with you today. And that's the reason why we came to you in July for the electrification Capital Day because we want you to understand that we are on the move and we are full speed transforming the company. And of course, we will group all of those pillars in the presentation that we are going to make on March 1, 2022 of the long-term strategic plan for Stellantis. So yes, we are on the move. Did the markets completely recognize the depth and the breadth of the transformation of Stellantis? Possibly not. Possibly not. That's something that we could speculate on, but possibly not. So what we will show you on the long-term strategic plan is that there is a huge potential with this transformation, but there is also a huge potential in making sure that we bring the best of Stellantis to this transformation and make sure that we are going to leverage, not only what one could call the defensive part, but also the offensive part. And I think there is a lot that we can do and certainly a lot that we can do to convince you that there is much more value creation to be unleashed by Stellantis. The message today is this company is on the move in terms of becoming a tech company through the software initiative. We are hiring, and we are getting a lot of very different talent to the company, and I see that those people are finding the right breadth, the right breathing space in the company. We are giving them the right capabilities for them to execute this plan. I'm very confident that this plan will be delivered as always, with this top executive team. And that's where we are. And hopefully, at one point in time, our investors will recognize that, yes, we have much more potential than what the market cap is today showing and that's the reason why we are having this dialogue with you. Yves, on the first one.

Thanks a lot for the question. I think that's fundamental to understand how our -- why our customers are going to be attracted by subscribing to do services. What is fundamentally different with the plan versus what used to happen before is that we're going to be developing continuously new features. So at the time where customers will buy the car, some of their features -- we will continue to develop features. So some features that will become available were not available at the time when the customer is going to buy. So this is really an opportunity for them to improve the vehicle with things that we're not, I would say, for sale at the time when they bought the car. So we see some market research telling us that this is something attractive for customers. The second thing is we do today already some business in terms of subscription, and we want to grow that business, obviously. We see a general trend in the market that people want to pay for what they use kind of pay-as-you-go type of approach. And we see this as a very strong driver, including, of course, in the automotive industry. And the third element regarding the subscription business is that we're just going to release new lines of business. If you take the usage-based insurance business that we're announcing for next year in North America and Europe, this is something new to us at that scale. And we are going to make it a very significant and attractive business for our customers. So you see there are a number of reasons why people would subscribe on top of their initial purchase of the vehicle.

Your next question comes from the line of José Asumendi from JPMorgan.

José, JPMorgan. One question, please. Just going back to the revenue opportunity, but also the cost implied in generating this revenue. Can you talk a little bit about how you plan the semiconductor content to range between the Small platform and the Frame platform? And how you are customizing that semiconductor content across different vehicles to generate the revenue? And maybe just as a quick follow-up, Richard, I think you see the number disclosed for investment specifically for software. You give -- a number for electrification of software. Is there a number for software, please?

Well, thank you, Jose. Those are great questions. Let me take the first one and then leave the second one for Richard. On the first one, and then Ned will decide if he wants to complement. What is quite exciting about the semiconductor strategy is that we have discovered a new area for optimization through the semiconductor supply shortage crisis. We started to dig in, and we were able to develop a lot of alternative ideas, alternative ways of going around the problems that we were facing. And by doing that, we discovered a huge area of diversity complexity that we can optimize. And we also know that on a mid-long-term basis, we are able to jump to the next generation of products, which will be at a higher level of performance with a lower diversity complexity and with a very clear supply strategy. That's where we are preparing. It's not short mid-term, it's mid-long-term. So of course, it needs some significant work, but it's an area for optimization that we were blessed to find through the way we have been addressing this supply shortage crisis. And as you have been seeing through the numbers, our teams and our monozukuri teams have done a stellar job to protect the company from those crisis. So that's where we are going. And I don't know, Ned, if do you want to add something to this?

I think it's really important to simplify our platform. So today, for example, we have hundreds of different types of chips that are just quite complex. Our environment is complex. So the current point the mid- and long term, we're going to just simplify it and it's going to allow us then to use the software really in a very differentiated way on 1 side and on the flip side of that, that our supply chain is going to get much simpler as well. So this type of experience that we have today with the shortages of semiconductors will definitely plan to avoid in the future, while providing value down the software channel.

Thank you, Ned. Richard, do you want to take the other one?

Yes, thanks, Carlos. So we've talked about the overall investments for the EV plus software in the period '21 to '25 being over EUR 30 billion. I think on an annual basis, we're looking at something like 15% to 20% of that number is related to the development of the software components of this business plan. So clearly, we continue to believe that we are around 30% more efficient in our competition in the way we apply capital to our business, and we can see that, as we've talked about in the past. So again, with the platforms we're looking at across the global business and the software offerings we're looking at, we believe we can continue to be very efficient. And we aren't holding back the business for lack of capital. We're clearly fully engaged in growing this area of the business and making sure that it has adequate resources to be successful.

[Operator Instructions] And the next question comes from the line of Gabriel Adler from Citi.

I've also got 2, please. The first is on how you plan to price for this additional content because historically, the industry has sometimes struggled to pass through additional content and technology to customers and higher prices with some customers it's necessary to pay for additional technology, but your market research suggests that this is different with software and you believe that your customers are willing to pay more vehicles or tire subscriptions, where there is more advanced connectivity? That's my first one. And then my second question is on China. I know that we'll get more details on the China strategy next year. But given the particular importance of software in that region, I just wanted to ask whether your software strategy will need to differ for a successful turnaround in China specifically, and what lessons you may have learned from the success of Chinese OEMs when it comes to software?

Well, thank you for those 2 questions. I would like to take the first 1 and then hand over to Yves for more details. But one thing that I'm sure you recognize is the fact that the Stellantis top leadership team has a very strong track record in terms of enhancing the pricing power of our iconic brands and services. That's something that we can check and we can demonstrate. So yes, we have discipline. We are able to manage our business, not only on the cost side, but also on the revenue side. Of course, when we bring additional features, services and entertainment, it has to attract the customer, which is, of course, the core of this journey. But I think that in terms of revenue management as much as making sure that we have the capability to extract from the market what can be extracted in a way that is very disciplined. I think we have demonstrated that capability. And I will hand over to Yves to talk to you more about the attractiveness of the products that we would bring to the market.

Thank you, Carlos. I think you had this question of the cost pass-through. I would like to put 2 things forward here. One is the massive complexity reduction efforts that we're working on our hardware. This is huge. If you take any of the domains of the 3 tech platforms we announced today, they're going to replace massive complexity in terms of system that had accumulated over the years. And also, of course, in the context of the merger between former P and former F, where we have the 2 complexity coming together. So the potential we have with synergies, combined with complexity reduction, massive complexity reduction on the hardware is going to help us a lot on the cost side. Of course, this also comes together with the scalability of our hardware platform. So we're working to make sure our platforms are scalable that they can have the right cost for the B segment, still a small up to SLTA Frame and be extremely cost competitive as always at Stellantis. On top of that, I would like to add that the economics of software are actually fitting very well with the size of Stellantis because we can develop the software features we've been talking about and deploy them on the full lineup and total global sales of Stellantis. So we have here a very, very good fit between the economics and the scale of the company.

Regarding China, I can tell you that we are on our way to fix it. Some of the work is already done, and it will be presented to you in March 2022. Some of those things have not been unveiled yet just because of some regulatory reasons that will be vanishing away from January 1, 2022. So I can just tell you that we are on our way. We have a good pace of execution, good pace of negotiation, good pace of converging with our partners. And hopefully, I will tell you more when we present the full plan. Some of those things are waiting for regulatory approval. And then from then you see that we are indeed fixing it. It's clear that it has been a focus for the teams coming from the 2 former companies that merged, both needed to fix it. And we are right now in a good pace and good track to get the job done. So hopefully, I will send to you the final conclusion of this work when we present the full plan in March 1, 2022.

The next question comes from the line of Patrick Hummel from UBS.

Two questions, please. First, as far as the tech type of margins are concerned. I have to be honest because the more I hear car companies talking about tech like margins and basically everybody is talking about it, the less likely it seems to materialize to me because I think the big difference between tech companies and car companies is these tech companies have a very dominant market position and they have created unique ecosystems and that enable them to charge these margins, whereas if every car company with the market shares as they are today, plus some new entrances trying to create this with the same competitive dynamics and also bearing in mind that it's a fixed cost-driven business with very low marginal cost to roll out the service. It seems difficult to me to end up in a scenario in which every player acts extremely disciplined and really stays very focused on monetizing rather than just selling the car and giving away some features for free. So if you can just help me dispelling these concerns and what you're going to do to avoid such a situation? That would be great. And the second part of the question is simply just getting your feedback. If my math end up well. You're basically saying out of the EUR 30 billion overall spend into the future growth areas. You have 15% to 20% going into software, which to me sounds like it's about EUR 1 billion per year. And assuming a 20% EBIT margin on the business, it sounds like you need basically EUR 5 billion of annual revenues before you will breakeven with that business. Is that a fair back-of-the-envelope calculation to do?

Well, thank you. Thank you for the 2 questions. I will take the first one, but I will let Richard answer the second one. Now if he is willing to. If not, I will take the first one now. Okay. So let me take the first one. Your point is very fair. Your point is absolutely fair. Is the competition among the OEMs going to damage the dilutive margin potential of this business? That's a very, very fair question. I would like to share with you some of the things that makes us different from all the other OEMs in this regard. First, we have possibly the best brand portfolio of the automotive industry in the world, which means we are conveying a lot of emotions through our iconic brands. And our iconic brands can be a way to magnify those experiences and then protect the value of those features through the passion of our customers for those brands. So that's one. We have, I believe, the best iconic brand portfolio of the worldwide automotive industry. And that passion, that potential of passion is going to help magnify the experience and, therefore, protect the value of those experiences. That's point number one. Point number two, when we talk about margins, we do not forget that we are talking about revenues and costs. So you were highlighting and rightly so the pressure on the pricing. I would like to highlight our ability to have a highly competitive cost on 3 dimensions. First one, we have a significant scale that we can leverage. That's point number one. Point number two, as it was mentioned by Yves, we have seen a huge potential on diversity complexity that Ned has already commented. So diversity complexity reduction is one of our strength. We have demonstrated that on the more conventional part of our business, and we will demonstrate again on the technology part of our business that we can generate a lot of cost reduction through the simplification of our technology footprint here. That's the second one. The third one is that you know that we are around 30% more efficient in everything we do compared to our peers, anything that relates to R&D and CapEx expense. So when you combine those 3 things, scale, diversity complexity reduction, ability to get the job done and efficiency and effectiveness, you see that on the cost side of those margins, we may appear as been worth the most efficient companies in the world on that matter. It doesn't answer to your fair point about the pressure on the revenues. But on the revenue side, we have, of course, everything that relates to our brands. Everything that relates to, of course, the quality of the talent that we are now hiring and everything that relates also to our capability to execute and our capability to stay disciplined. So a few years ago, we would have the same conversation about residual values. A few years ago, we would have the same conversation about pricing power. And you can see what has happened over the last few years with Stellantis on this matter and the former companies of our company. So that's something that we need to consider. At the end of the day, execution is going to be key as we all know. Richard back to you.

So obviously, the -- Patrick the math you did is sort of arithmetically correct, but I don't think it's relevant and as much as we're fairly building a transformational business here within the car company to become a software-enabled services and features provider together with the mobility. So we're investing in the platforms for -- the new electric platform. We talked about the software platforms. Those will be put together with the EV platforms that we talked about in July. And then the features and the connectivity will allow us to grow the business. So at the moment, we're at an investment phase. And then as we grow the business through to the EUR 4 billion of revenues by '26 and the EUR 20 billion by 2030. Clearly, this business will become more than self-funding and extremely profitable for the overall company. So I think really we just -- we need to look at it, obviously, at the moment, we're in the phase where we're investing and the level of revenue needs to grow. But clearly, that's the same in any business where you're having a transformational moment with the product offering.

Well, thank you, Richard. I know that Yves wants to add something on this one.

Yes. I think one key element is in the EUR 20 billion revenue that we're communicating, we're talking about the software-enabled services. So take the example of a connected navigation system, what we include in the EUR 20 billion in the bid in the so-called MSRP part or in the subscription is the traffic live information that we're selling to the customer. There is also a revenue which is collected at the time where we sell the car for the system itself, the electronic device and so on, which is not in the EUR 20 billion, which comes on top. And of course, this is something that's also being invested. So just to want to make sure that we clarify that because the profitability of the business is already there today on the EUR 400 million of revenue that we're making. So there is a little bit of non full overlap between the R&D, CapEx we're talking about and the revenue we're talking about because we are very careful with the revenue to take only what's incremental and not belonging to the physical car itself. So that's an important element to have in mind here.

The next question comes from the line of Simon [indiscernible] from [indiscernible].

You kind of -- on selling more and more connected vehicles. Can you tell us what does it mean for your overall production and your factories? Do you think your car production will increase or will it remain stable because of car sharing and subscription models?

Well, it's a great question. I believe that what we are doing in terms of software is going to give us the ability to raise our share of the total market. Where is the total market going to go? That's something I don't want to speculate on based on many things that are not related to mobility that may impact the mobility of the citizens all over the world. But in terms of competitiveness, of our company, certainly, enhancing the customer journey is going to give us more capability to grow share in a profitable way. That's clear. It's a matter of appeal. It's a matter of making the customer journey more enjoyable, more exciting. We believe that what we are now doing is going to give a better capability to all of our brands to raise their own share. That's quite clear. While we do this, what the total market will do grow or decrease is something that I don't want to speculate on. Of course, it's related to protecting the freedom of mobility of the world citizens. It's about making sure that we can offer them, of course, enjoyable, safe, clean and affordable freedom of mobility. And this is the reason why Stellantis has such a bright future. This is the reason why there is so much potential in our company. And with this new direction, we are creating more breathing space for new talents to join us and for those new talents to enjoy that breathing space and the capability that we are offering them to unleash their full creative potential. And this is exactly what we are trying to do. It's an exciting journey. I'm very, very excited by the potential of Stellantis. We have seen what has been done over the last year, I should say, 11 months. It's amazing how many things have been done. It's amazing the passion of the Stellantis people to create those innovative plans and then to get them executed. So that's where we are today. And of course, I will be blessed and honored to present to you the full plan in March 1, 2022.

Your next question comes from the line of Philippe Houchois from Jefferies.

I want to go back to some of the software issues. The first one, I think, is on the benefit of scale that you talk about and the synergies that come with it. I'm just wondering about the opposite effect. The fact that you have 14 brands, you have to -- you want to handle the brands with specialized services and you're also dealing with regions in Europe and in the U.S. where customer requirements or needs are different. And I'm just wondering if there's an opposite effect to the synergies of some dis-synergies, a different form of complexity? Or in other words, how scalable some of that technology is across regions? Now you have North America and Europe, you may talk to us about China in March. And so that would be interesting to me? And the second point is a bit technical as well, but big techs obviously now hugely important for the industry and for you and you're among the largest car makers in the world. Right now, you depend on providers of cloud services for your data protection. And we have -- some of them are competitors potentially it's a very highly concentrated and therefore, could become risky situation. Do you think you need to create your own cloud capabilities?

Those are 2 great questions. The first one about is there any downside from having 14 brands when we deploy our capability in terms of software? The second one is how do we deal with the cloud services moving forward? On those 2 questions, I feel that Yves is really excited about giving you the answers. Yves, please.

Thank you, Carlos. Now on the first one, I just would like to give an example. You showed the Jeep platooning feature in the presentation where we enable communication between the different cars on the trail. This is obviously resonating very, very well with our jeep customers and their passion to go off track. We're going to use the exact same software modules to create the same service with a different flavor for our friends and family brands, say, Chrysler or Citroën in Europe where you will have communication capabilities with 2 or 3 cars going on the motorway on a weekend, and they can now talk between each other. They can point their GPS navigation towards the car of their friends and stop together. They can maybe listen to the same music streaming at the same time, so they feel together. So the beauty of software is we can take a micro service type of approach as we develop those features. And then we give them the right flavor to resonate with the DNA of the brand as we've explained today. So we -- in this approach, we're avoiding the synergies that you were talking about in relation with brands by getting to the next level of modularization in the technology. That's to the brands. To the regions, we're acting with global platforms, taking, of course, into account the specificities of the regions. But here, again, our plan is to reduce complexity to the maximum and be extremely modular in our code base. This is fundamental. And we've, I think, very deep into that to try and get it right. On the cloud thing, I think, yes, the market is very concentrated, but cloud operators have gained the level of efficiency that we would probably not going to replicate in the short term. So in the short term, we will definitely go the market route that we also see a number of emerging cloud providers on the planet. So I would say, no short-term plan to create our own cloud solution. But maybe and Ned, as part of the -- as new CTO, you want to comment to that as well.

Yes. Yes. Thanks, Yves. First, on the software piece, well, if you look at 14 brands, historically, a lot of these brands have developed complete vertically integrated software stock or they had a partner selling that. So it's quite expensive. In a new world, we can actually build 80% of the software that just use across all 14 brands. The 20% difference in the stock is that sort of a customization on the services side and the experience side that customers will enjoy brand to brand. But as Yves talked about this 80% is going to grow all the brands together, it's going to be a fantastic scale and a synergy opportunity for us. So I see it quite a bit opposite to the comment. On the data side, it is very hard to compete to the cloud providers and the scale that they provide. So if you look at the cloud storage costs that we pay today, they've been sort of coming down in cost. So we do anticipate that the cost on the storage and the cloud side is going to continue to prime down. And eventually, we're going to look at this space very closely. But at the moment, it makes no sense to build our own cloud capabilities where the capital investment would be quite enormous to compete to somebody like existing providers. But obviously, we'll look at that space very closely in the future.

So I want to thank you all for your participation and for sharing this very important day with us. Our event ends here, our tech journey continues, and we will be very happy to see you all at Stellantis booth CES in Las Vegas. Thank you again. Goodbye and keep well.