Hyundai has just announced it will spend $12.6 billion on software development. What is your reaction to that?
We have formed our own software organization a year and a half ago, and we are already building the teams for this next-generation platform. I think every automaker needs to create that capability. We are all going to do that a little differently but owning the software capability is an absolute must, so I’m not surprised that other car companies will invest in bringing that capability in-house.
And developing their own operating system as well?
You don't have to develop an operating system; there are plenty of them available. You do have to develop your own software experiences that are critical for the interaction between the vehicle and the customer. And they need to be better than Car Play or Android Auto. Whatever a carmaker builds, it needs to be as good or better than customers get on their phone.
How do you transform from being an automaker to being a services maker?
It comes down to two things: 1) the software and 2) the business models. At the end of the day, we are selling cars, but as we move toward selling mobility services such as with Free2Move, you phase in capability to create those services. On the other side, you need to deliver meaningful experiential services, and some of those make sense to have a business model attached, like subscriptions. Such services have to add significant value. That is not an easy thing to do, but there are subscription services that in the future you can offer, such as autonomous features. You buy the vehicle with the basic ADAS -- that's good enough, it's safe, it controls automated braking and lane departure -- a fantastic service, but maybe I want to get hands-free for the highway. Finding that delicate balance between what you need to sell in a vehicle and exceptionally high value-added services, where the customers actually want to pay for them, is the magic that we all are trying to find.
Stellantis announced recently that it will open a site in Bengalaru, India, to develop SmartCockpit software. Is that a model for future development?
We have development centers in France, Detroit and Italy, but to scale up with speed there are not enough trained engineers in these centers. India has a lot of smart people and a lot of universities, so that is why we chose to open our new center there.
How are you recruiting software talent?
Recruiting high-skilled engineers is difficult for all of us. We need to hire both highly qualified engineers who can scale the software and also have a pipeline of new college graduates. A potential slowdown in the economy could be helpful.
Will we see underfunded startups start letting go of engineers?
I think we will see that. Money is really tight now, and I suspect it will get tighter. We have (our venture capital fund) Stellantis Ventures, and we are seeing a lot more demand from startups. Six months ago when we talked to them, they would say that they aren’t interested in raising money. Now they are coming back to us and asking us to invest. By the way, you will get a discount on your entrance (investment). So, we have already seen behavior that leads us to believe that money is very, very tight. I think we are coming back to more realistic scenarios. When money was super cheap, ideas that maybe were not great were funded. I think we'll see a lot more rigor.
Would you buy some of those startups?
I think we will see some acquisitions in that space from us and from other large enterprises.
Going back to the cockpit operating system, you say you want a lighter system, but you don't want to develop it yourself. Can you explain that a bit?
There are a lot of Linux-based light operating systems out there that you can choose from. What we want to build is a high-level abstraction layer, where we have partnered with Amazon to build much more meaningful experiences. In our digital cabin space we have partnered with Amazon and Foxconn to develop software. And then we lay that software on top of Qualcomm hardware.
When will the first cars have this system?
Late 2024, they will come with the STLA Brain. I don't think we have announced which will be the first car.