Polestar and Stellantis on Tuesday showed why software will determine an auto company's future survival.
Just hours after Stellantis announced it aims to generate about 4 billion euros ($4.5 billion) in additional annual revenue by 2026 from software upgrades and subscriptions, Polestar revealed a telling example of what is at stake.
The Volvo Cars subsidiary said that since late November more than 400 people had downloaded a performance-oriented software upgrade for the Polestar 2's long-range, dual-motor variant.
Each customer paid roughly 1,000 euros for 50 more kilowatts (68 hp) of power and 20 more newton meters of torque.
The software is delivered remotely via an over-the-air update.
That is 400,000 euros in a matter of weeks.
Polestar added in its release that software expertise allows it "to continue to explore alternate revenue streams and further strengthen its financial position" as it prepares to go public via a merger with the special purpose acquisition company Gores Guggenheim in the first half of 2022.
That deal has an enterprise value of $20 billion.
Automotive News Europe Italy correspondent Andrea Malan, who is a numbers savant, estimates that based on Stellantis' figures it expects to generate 50 euros a year from customers for software upgrades and subscriptions.
Also on Tuesday, German business newspaper Handelsblatt reported that Robert Bosch, the world's largest supplier, would boost its Etas subsidiary to 2,300 software experts from 1,500 to accelerate its pace of development.
"With this new setup, we want to become a leading provider of application-independent vehicle software in the future," incoming Bosch CEO Stefan Hartung told the newspaper.
Experts believe that the market for automotive software will be worth billions of euros in the next few years. Bosch expects double-digit annual growth until 2030. Competitors Continental and ZF Friedrichshafen are also investing heavily in the sector.