Stellantis N.V. (BIT:STLAM)

Investor Update

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Dec 7, 2021

world from Tenantis North America. Welcome, and thank you for joining us. Software is everywhere. It is changing our lives and transforms many industries. Today, we will improve how disruptive the auto sector can be. We are not opening the way for effort 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 cycle to create a product that can evolve naturally and regularly. This approach will make the vehicle always fresh, make 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 Savare. Thank you, Yves. Good morning, and good afternoon, ladies and gentlemen. Welcome to the Celantis software day. I trust that you and your families are well. Please take care. I deeply appreciate your time and interest in Celantis. Thank you again for that. Software strategy is one of the key building blocks of Cemanti's 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 mission, powered by our diversity, we lead the way the world moves. We will present today how Celeb 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 three all new AI powered technology platforms to arrive in 2024 with a particular focus on connectivity with our brand new e e platform with the software features constantly improving over the year. Customer experience with a purposeful cockpit and interior with an immersive experience and connection to 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 four physical EV platforms and e power play. Software will further magnify the DNA of our 14 iconic brands, creating a unique experience to reach our customers in the fastest and most cost efficient way. Software will improve our business model, disconnecting hardware from software cycle and shifting the center of gravity of our business towards Telenet's extended car park. We have already 12,000,000 connected cars, and we'll reach 34,000,000 in 2030. 6,000,000 OTA updates in 2021. And in 2030, we will update our car continuously, reaching 400,000,000 updates per year. By 2026, we'll reach €4,000,000,000 of revenue and €20,000,000,000 by twenty fifth. This new software business is at high dilutive margin. Borderline detect businesses margins than with traditional automotive products. And software will support cost savings and avoidance to make Cylindis an even more efficient company. And we will give an increased value for our customers with higher customization, longer life, higher resale value, more than 13,000,000,000 of euros of investments through 2025 to execute software and electrification transformation have been planned. We are on a rolling note to anticipate the future. Let's see how. Thank you, Carlos. We now have a clear view of why that state. We are talking about a significant growth opportunity at tech industry market. Let's now turn to our business and tech team. I'm so happy to welcome them on stage. Vanta is our head of business and product. Joaquin 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 way to achieve brand differentiation. As you will see, we can unlock new revenue streams by monetizing our connected car park. Let's give the specific with Manta. Thank you, Yi. 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 €4,000,000,000 in original revenue by 2026 and more than €20,000,000,000 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 five pillars that personalized features for our customers and fleet across our 15 iconic brands. With 12,000,000 monetizable connected vehicles today, we define monetizable as the revenue captured within the car's first five years of life. That number of connected vehicles rose to 26,000,000 in 2026 and thirty four million by 2030. With a global scale opening a world of opportunity 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 15 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 hyper connected millennial expects a fully personalized connected ecosystem that products like Herako 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 Trail's 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 they continue to discover new adventures. With Vaco's vehicle communication capabilities, our chief 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 chip 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're 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 X-ray 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, instrument cluster will become part of the brand new human machine interface. And for our ramp pickup owners, customers can increase the capability of their truck to handle greater load. And let's talk about long road trip. The ability to customize your in cabin experience with entertainment options like premium stereo, Wi Fi, 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 50%. Our third revenue stream falls into data as a service and fleet services business. With programs like Atlanta Smiles rewards program that we recently announced, we understand the lifestyle choices of our customers. We are the number one light commercial vehicle provider in Europe and one of the largest in North America. We will leverage that leadership together with Street 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 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 one suppliers. We estimate our revenue in this category to have a compound annual growth rate of more than 90% through 2013. The fourth revenue stream we have identified falls into the vehicle pricing strategy and corresponding resell value. Our research shows that customers see the value in enhanced connectivity, advanced driver assistance, 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, they come 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's DS Automobiles very elegantly delivered on that promise. Tailored for DS customers, only you with an exclusive high end program offering a wealth of services that are personalized using the connected car data and, of course, the customer's consent. This will make the brand a lifestyle choice and transforming our customer journey into a unique travel experience. Let me inspire you with the future of DS Automobile. In a few days, my new DS will be delivered. I impatiently start answering the questions on the MyConcierge DS app to start customizing my experience. Country lodge in the Pied Lalois or five star hotel on the Venturibiera? Modern or classical art? From these few questions, the virtual concierge is getting to know me. It's just arrived. The so called cocoon effect suddenly makes sense. There's absolute silence, and the interior is as comfortable as a first class seat. I'm getting to know Iris. Theo's artificial intelligence, which lets me customize every single one of my trips. Available worldwide, she starts playing the architecture of the longe en nouvelle podcast, My Favorite Architect, which ends right about when I get home. I'm at the wheel of my new DS, ready for the tailored week long road trip in Italy. Iris seems to have meticulously planned every detail. After ten minutes, the windows turn into screens. Points of interest, restaurants, charming hotels, nothing gets past Iris. In the backseat, our little girl prefers the infinity of space for the flashing landscape. The directional speakers keep us safe from the spaceship beam noises. We can enjoy our playlist without a worry. As the sun goes down, my wife feels a bit tired. She stares at the stars and falls asleep reading the constellation names which appear as if by magic on the glass sunroof. The French art of travel. I am especially fond of the Starbase Nerve future. On the after sales service front, owners can access vehicle health support, coupons, and even schedule service appointments. So that's the point. This drives more than a 10 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 50% across all of these five pillars of revenue through 2022. We also leverage connected car data to identify quality issues faster. We have 12,000,000 connected cars in operations today providing us with a wealth of data, more than 3,000,000,000,000 data points, generating timely actionable intelligence. Year to date, we have made more than 6,000,000 over the air updates. In fact, these actions have contributed to Ram and Dodge Ram ranking first and second in the most recent JD Power initial quality study. Using vehicle data for early detection of issues is not only improving overall vehicle quality and our customers' satisfaction, but also generating €1,100,000,000 in savings by 2013. So I'm super excited about this five pillars of growth and the value creation for our customers. Now let me hand it back to Yves. Thank you, Manta. Thank you very much. I'm so excited, and I'm sure our customers will love it. We have five field business lines that generated 380,000,000 revenue in 2021. We have four road map for each of those business lines and a clear go to market. By 02/1930, we will address a fleet of 34,000,000 connected vehicles with a revenue ambition of EUR 20,000,000,000. 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 platform, which is why our strategy is structured around developing open platforms that will continuously evolve, platforms where software cycles are disconnected from hardware cycle, Platforms that are designed for their capabilities where features can be continuously added and upgraded over the air. Platforms that will become better over time thanks to AI. With this platform, we will be fully leveraging and benefit from the economics of software. Joaquin, can you guide us to our tech platform strategy? Thanks, Steve. I'm so excited to tell you how we are already making our future a reality. Celebrate will be the number one 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. CellarBrain is our centralized architecture with a large central brain, ECU surrounded by solar ECU, aggregating the sensors and actuators and the edge ECUs driving all the functions in the vehicle from off board systems, initialization, charging, vehicle access, autonomous driving, entertainment, served living space, and drop off the passengers, and finally parking the vehicle. Celebrane 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 off board. In addition, it will have APIs to extract and access all the vehicle sensors and actuators. Displays, navigation, plus hardware and software layers to enable fast application development on top. These applications can access all sensors, all actuators, 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 solar architecture and accelerated with five g connectivity. In the past, it was about a specific architecture for a specific set of features at Vessel. The future is about capability. 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. Stellar Brain represents a software defined vehicle platform of capability. We are on track to launch the Stellar Brain in 2024 on Stellar Large, the vehicle platform. We will quickly roll it out into all our vehicle platforms from small to medium, large end to frame within the two years up. Let's look into some specific domain, cockpit, autonomous driving on top of Celebrate. Now I'd like to bring up Vishnu to talk about this cockpit solution. Thank you, Ekem. 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 latest part. We have over 12,000,000 connected cars on the road today. And just this year, we have delivered over 6,000,000 over the updates to improve in vehicle experience. This is just the beginning. We will be able to update all our software centric features inside the car, and this capability will go to over 34,000,000 connected cars by twenty third. Let's now switch back to the topic of creating the best ever cockpit. We call this Stella Smart cockpit. Our mission is to transform your vehicle into a personalized living space. The new Grand Wagner with its combined 74 inches of screen space and multi zone communication is just a taste of what's to come. The foundation of Stellasmart cockpit 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 gesture. 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. If in that pool, that is Stella's smart cockpit experience. The whole experience will be further enhanced with additional augmented reality capability. A good example of how we are advancing towards augmented reality is in the extended heads up display in the d s four 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 for 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 Stella Smart cockpit. 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 first place productivity zone, a first place gaming station, a study center, a creative studio, or even a wellness arena. The universe of connected talent to start is growing by millions every year. To connect with the ecosystem of developers, we are launching the space SDK. It's part of the imagination of the developer community. We're also launching a grand hackathon with the team of gamification, and this is backed by a $50,000 price money. Isn't that exciting? Now handing it back to you, Yoko. Thank you. Now I really look forward to the results of the hackathon and all these submissions and seeing the winning solution coming to our vehicle. Let me now focus on our autonomous driving develop. As Vishnu noted, working with partner systems, this is also true for our strategy for Sella AutoDrive in implementing advanced driver assistance systems and automated driving. For up to Level three, we are co developing with BMW. And for level four and above, we are partnering with Waymo. We are already selling the best level two solutions in the world for up to 180 kilometers an hour with semi automated lane change also released this year. Just two months ago, we demonstrated the potential of level three autonomy with our level three pilot project in Europe, where the team accomplished a fully automated trip from Paris via Strasbourg to Hamburg, totaling over 1,000 kilometer of autonomous. Level three pilots represent European flagship innovation project to test the viability of level three automated driving on public road. For STELAR Autodrive, we are working with BMW. We have several 100 people working on STELAR 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 continue our collaboration with Waymo to deliver L4 automated driving. Elantis is continuing the partnership with Waymo, the world leader in level four autonomous driving. We are already working with Waymo on L4 ready ISO Pacifica Hybrid Mini WAN used in Phoenix, Arizona, which was the first commercial autonomous ride hailing service worldwide. The solution was driving more miles in l four autonomy than any other vehicle on the plan. Now Waymo works exclusively with Cilantis as their preferred partner on the development and testing of l four autonomous light commercial vehicles. Together, we are co creating autonomous LTVs starting with the VAM ProMaster to meet a wide range of our global customers. We are planning to deliver the first vehicles to them in 2022 for joint development. Earlier, we heard from Yves how important AI is in our vehicle. Mastering AI is fundamental for applications like Sella AutoDrive and Sella SmartCop. Also, in AI, the right capabilities do make the difference. We are aggressively building capabilities. I'm happy to introduce you to Neera Trecic who joined us recently from Lead AI. Thank you, Yosteen, and hello, everyone. My name is Dennis Biesic. I live in the Bay Area in the heart of Silicon Valley, and I'm head of artificial intelligence and software at at Solantis. I have worked with some of the most innovative and agile tech companies in the world, and I'm bringing that experience and that spirit into my mission at Celenti to create breakthrough customer centric AI capabilities for our vehicles, including an autonomous driving and cockpit application. And what I'm most excited about in this role is the tremendous scale of the transformative impact this will have. So please stay tuned. Back to you, Yossi. Thanks, Nida. I'm so excited that we have you as a life of talent. And under your leadership, you will have wonderful AI based customer solutions coming out of your organization. We will drive together AI across all domains in the area of world perception and planning in autonomous driving, voice and hyper personalized digital assistant in cockpit and vision's organization. Based on this, we will release multiple AI solutions in the coming three years on our existing platforms and growing even faster based on our SellaBrain platform in 2024. We will launch SellaBrain as a minimal lovable product in three years from now. From all cars, we will collect data on usage and driving situation and update or even upgrade our solutions over the air. For Sella Brain, it means we will release it, for example, with an l two plus Selle AutoDrive feature, and we will upgrade it over lifetime up to a l three plus solution. In addition, Selle Smart Cockpit will come, for example, with conversational speech and evolve to hyper personalized digital assistant. This quarterly update, this means hundreds of new features, and this will result in the service number shown by a month earlier. This means we can dream up together features, even something we have never thought of yet, for vehicles and for ten years after they were built. To sum this all up, we are creating a customer centric features and services that will be continuously updated and refreshed, enhancing, creating value for all our customers and all our footprint. We are creating Sella Brain architecture for all our vehicles starting in 2024 together with number one solution in cockpit powertrain in autonomous car. 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 Ethan. Thank you, Joaquin. Thank you. And I'd like to thank the whole team, including Manta and Vishnu for sharing their vision and plan. 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 two very specific drivers. First, we have reduced complexity to a minimum with two platforms, leverage 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 roadmap. It is based on those building internal capabilities and decisive partnership with stakeholders. On the internal front, inconsistent with our purpose, powered by our diversity, we are building a global network of talent around the world. Software is reshaping the future of Probability, and we, at Celantic, 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 analyst or some 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 talented team of 4,500 people by 2024, not comprising the partnership 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 Cenantis, I'd like to show you two videos. They are just two examples of Cenantis people who decided to take a leadership role on the ambitious and exciting journey we are building together. Let's hear from them. Hi. My name is Marco Winger, and I live in Shuffleboard, Germany. I'm adding the integration of the in the in the the in the in the I'm very passionate about our mission since I've always believed that the car is the most personal and complex tech product on the planet. Bringing this product and services to the next level is one of the coolest job I can think of. My family and I have only experienced half a decade in our own fully electric vehicle. Now I'd like to invite you joining to create this experience and beyond for everybody around the globe. I joined the software organization of Stellantis two months ago. I live in Seattle, Washington with my family. Prior to joining Stellantis, I worked in the video game industry, partnering with development studios in some of the biggest console, PC, and mobile games in the world. And before that, spent time in both the entertainment and telecom industries in The US and in The UK. What attracted me to Stellantis was the opportunity to be part of transforming a one hundred year plus automotive giant into a global software and analytics leader. In addition, the chance to ensure that this software evolution affects real societal change is immensely exciting. We have the chance to improve accessibility and mobility for millions of people, contribute to significant reductions in emissions with 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 they 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 partnership with executives. We have established decisive partnership from key technology platforms to share non differentiating content and maximize speed and efficiency. On part of this, final agreement with Foxconn to create mobile drive has been signed and not forget. We have now obtained full regulatory approvals and are proceeding to the province before the end of the year. Stockton is bringing its mobile Internet expertise, speed of execution, and a reinforced access to the ASEAN software talent pool. For automotive driving, Joaquin explained our partnership with BMW and Weibo. We are currently working on our semiconductor strategy, and I will see more about it. As you have seen, we have strong ambition and a clear road map to make it real, taking up with strategy and plan. 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 Airflow. Carlos had the chance to drive and test it with the software engineer. Let's watch it together. What a smooth ride. It is fantastic. So tell me, which extent are you going to bring to the automotive world the experience that these customers are looking for and specifically the experience that the technology driven customers are expecting from us. The Airflow really would represent as a third space, and customers are no longer looking for just a product to get them from point a to point b. They're really looking for this kind of connected hub that allows them their digital lifestyle to travel with them. And and this is all real. This is a this isn't just a concept. This is something we're looking to bring to market too. I see exactly what you mean. How do we enhance the life cycle management of our products? Which extent are we going to be able to use software to enhance the life cycle management of our products and keep our business lively and, of course, productive? Software actually controls almost the entire document experience in the vehicle. We're actually overdesigning the hardware so that it is capable of adding new features over time. That should have a very positive impact on the residual values of our products at the end of that specific ownership, and I think that's going to be a great value creation device. So what you see here today was all created virtually and tested for user experience. It helps us to bring this faster to the market and also reduces development cost for us. So it is about continued development and continued deployment enabled by our software architecture. And I understand that life cycle management is not going to be only about headlamps and bumpers in the future. That is going to add significant value to our business position. So speaking about the continuous integration of features, the new electrical architecture was designed for easy feature enhancements and additions. Expanded computing power has allowed us to consolidate the vehicle functions into a smaller number of high performance computers. We can add new features over the air even after the vehicle has been delivered. This keeps the vehicle fresh and new. It also makes it more and more capable over time. And using that power, how are we going to bring the consumer electronics and the gaming experience to the affirmative world? How do we bring all of that value to our business at the end of the day? This is one of the most exciting parts of the job. We're we're actually working together with multiple partners and putting experience like the Airflow together. And then on the experience standpoint, we hired UX designers with psychology background. Wanna integrate all of this consumer electronics like content. We hired mobile and web designers. And then for all those amazing visuals that you see on the screen, we actually hired entertainment and gaming designers to help us put that together. So for example, in the Airflow, you can seamlessly join a video conference to the integrated system of camera displays and a audio system in the comfort and a privacy of your cabin. So it's about putting the right information at the right place. Right. And I can guess that I'm going to have some meetings in my car in the future. Correct. Yeah. And I think to build on that, you know, autonomy is a a brand new experience for our customers. And and the most important thing that we can do is build trust with them. And to build trust, we need to put them at ease while the system is working. Right? It's all about trust. Trust the brand, trust the technology, trust the engineering that we are bringing to the market. It's absolutely exciting to listen to you because we feel that our industry is full of talent, expertise, and I think that many people do not understand to which extent we are consolidating. And then, of course, I trust that this team is going to be in the fast and strong in the tech company direction, which is exactly what our long term strategic plan is going to be about. Absolutely. Thank you. Sounds like the future is already here. Our industry is in the midst of a big transformation. This transformation is creating initiative, creativity, innovation, and in the end, it will have made cars a better, healthier place for our customers. We, at Cylantis, 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 Turic, 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 Cenantis a few weeks ago after many years at tech companies. As you mentioned, I just recently joined from from Amazon. Will have been a number of years. I really enjoyed my my work at Amazon with my team and I just amazing tech and product customers will love and enjoy every day. What makes you excited at Celanci? What innovation is Celanci 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 so many different technological fields and technical fields such as solid state battery effect, 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. What do you see from the future right now, I mean? In the next twenty years, we'll have an experience to truly redefine the cars and how we experience them. This transformation will be rapid and really big. It's truly exciting place to be for the any engineer, they wanna work on exciting technology. So as you're creating our overall technology strategy, how critical is software, that strategy? Great question. Today, customers expect their cars to do more than just big cars, to be integral parts 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 car will notify the owners if they have enough charge to get to the destination. It wears to charge along the way. It has to communicate with the smart home, and it will close the garage door when the owner forgets to do so. It will find the house, set the speed alarm, the configure the house, find the system, and so forth. When in the past, customer will have a predictive navigation system and will continue to consume the same concept that they just enjoyed at home. It will be another level of mobility saving for our customers. This this is all done with software. It's the software that makes these experiences possible. Of course, we need to build the holistic system with all the right husbands 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, you know, the cars are are optimal mobile device. They're fast with the technology. Vertical hardware and software integration is very critical to deliver the time experience that we just talked about. In the next four years, we will be launching both 50 low emission vehicles across our 14 brands. So to ensure we deliver on the customer promise, a radical platform sophistication and vertical integration is really needed. Our growth in partners in this strategy. So in addition to working with existing plus suppliers that we have a great relationship with, we decided to partner with Foxconn to simplify our diverse semiconductor portfolio in design for ten minutes 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. Thank you, Lopez. Thank you for sharing your thoughts. Our software strategy is a huge step ahead 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 the recurring 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 colleague will outline 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 Solantis is today on its software and connected services journey. At the beginning of this year, we combined two 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 ten years of experience in connected services, approximately twelve million connected vehicles in customer time globally, and 400,000 customers currently subscribing to our connected services offering. 2021, our revenues in software enabled services and features stand at around €400,000,000 To quantify the opportunity for a truly global mobility provider like Sonasis, some analysts estimate there will be a total addressable market for software enabled mobility related services of more than €200,000,000,000 by 02/1930. Now let's recap the five pillars of software revenue opportunities that Manto described earlier. Firstly, services and subscription. 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 free services, which includes features such as usage based insurance and data collection for expanded services for fleet management. These three categories will all derive through subscription based revenues. The remaining two categories arise from the impact that these new offerings will have on vehicle and mobility services revenue 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 the additional vehicle data from our software defined vehicles and more frequent and convenient over the air updates, by 02/1930, we expect to benefit from over €1,000,000,000 in annual cost savings. We envision significantly growing our software enabled revenues between 2021 and 02/1930, 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 five pillars. As I mentioned, today, Zalantis has approximately 12,000,000 connected vehicles across the globe, and the majority of the software enabled revenues we generate come from content included after vehicle sales. From 2024, we will start rolling out the new SelleBrain electrical and software platform in our four SelleBrain vehicle architectures, and the number of monetizable connected vehicles will increase to approximately 26,000,000 by 2026. The features and subscription based services offered on our vehicles will also increase notably, leading to a revenue opportunity estimated at around €4,000,000,000. 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 02/1930, the connected car park is expected to reach approximately 34,000,000 vehicles. With this expanded car park built on the four common global architectures, we believe the software related services inherent in our mobility offering could be worth incremental annual revenues of approximately €20,000,000,000 These new revenue streams will drive strong margins, which will be accretive to our current adjusted operating income margin. And to be clear, these incremental revenues and accretive margins do not include revenue opportunities from Level four and Level four plus autonomous driving. In this technology area, we continue to work with our partner Waymo in the development of Level four and Level four plus equipped vehicles. As we make progress together, we will update the market. We believe that this opportunity can be a game changer for our LTV 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 €30,000,000,000 of planned investments in electrification and software through 2025 as we announce at our EV Day in July. Above all, these software related services will create a priceless constant connection between Celantis and our customers. Thanks for listening. I'll now turn it back to Il. Thank you, Richard. Our business and tech teams are fully committed to execute this plan and eager to make it happen. We will be working at full speed to reach our 2,030 ambition, a fleet of 34,000,000 connected vehicles, generating EUR 20,000,000,000 of revenue at attractive tech margins. And we will be among the first to deliver those OpenTech 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 Celineis 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 Sabarec, for closing remarks. Thank you, Leaf. Software is one of the key pillars of our sustainable future at Cellantis. Cellantis enjoys three differentiating factor. Software will efficiently magnify our strong 14 brands. TalentSys 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 CelineSys into a mobility tech company, delivering tech content with agile focus. This extends the deep commitment of our team to deliver on our software strategy. We technology platforms and accelerated rollout on our four physical EV vehicle platform, continuously upgrading vehicles over the year, offering the new releases every quarter, ramping over the air update capabilities to our fleet. Within three years, 100% of all new vehicles will be OTA updatable. Capability building. Software team over 2,500 people by 2024, creating a global network of software talents around the world. With existing talent, taking advantage of our diverse global engineering, upscaling more than 1,000 people to our software and data academy, and hiring software talents, no reason from technology and other industries. Besides these partnerships with technology leaders, Foxconn and Weibo, 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 €20,000,000,000 of revenues by 2030 at a relative margin in line with the company powered by our diversity, winning the way the world moves. We invite all of you to the presentation of the Cervantes long term strategic plan on 03/01/2022. 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 and A session. We will now start the Q and A session. You. The first question comes from the line of George Galliers from Goldman Sachs. Please go ahead. Thank you. Thank you for the presentation. I wanted to ask two questions, if I may. The first one 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 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 that's closer to a core competency that they're able to advance more quickly than yourself? 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 €20,000,000,000 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 for these services, there's no incremental cost to yourself. Well, thank you. Thank you for the those two very important questions. Let me start with the first one, and and then I will hand over to to Richard for the second one. On the first one, first two, 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 at this precise moment may be more skilled than we are. So we are on a two 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 need 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 needs 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 two 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 Cervantes 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 without, of course, putting aside the fantastic history and the iconic brands and the emotions that we are able to communicate to our customers. So we want to combine those two 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? Yep. Thanks, Carlos. 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 as our medium term sustainable margin target. So if I look at tech margins of other large tech players today, they're clearly double the sorts of margins that we run out today, and I think that would be a baseline that we will 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 the margin aspiration. But it's I think we're pretty confident that this 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 €20,000,000,000 of revenues that we are targeting to generate. The next question comes from the line of Horst Schneider from Bank of America. Please go ahead. Yes, good afternoon. Thanks for taking also my questions. The first one that I have said relates actually to this revenue business plan that you presented till 02/1930. It's just striking that service revenues per vehicle that they are rising over proportionally towards 02/1930. And I just want to understand what is behind it. So if you talk about these five 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 02/1930, is it right to assume that in these 2030 revenues, there are also auto 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's now the new one as well that you announced. Those are two great questions. It's true that we have a very detailed plan on each of those business pillars, the five 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, who's 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 figure that Richard shared that the share of the revenue, which is related to MSRP and retail value sales to go to us by 2026. Of course, as you move forward in time, the subscription part of it is going to be growing faster. And so by 02/1930, this proportion will look different. We don't want to disclose a 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 elements in the business plan and will represent a significant share of the total value. That's what I can disclose today. Then on a strategic partnership, obviously, the vehicle is becoming more complicated. Vertically vertical integration is critically important as our desired needs. And 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 10% of chips to completely simplify our supply chain and and provide that physical integration that that's required. You know, that those same family of chips will be available for others to to to purchase as well. So that's that's part of the Foxconn's relationship. The BMW partnership, you know, the core technology in autonomous driving is is it's expensive to develop and sharing the cost of a core technology development is a is a great deal for us and and for our partners, BMW. But then we're gonna have unique developments, industry experiences in terms of services that we build, and those are the kind of experiences we uniquely gonna build for our own for our own brand. The next question comes from the line of Thomas Vachon from Kepler Cheuvreux. Go ahead. Thank you very much. It's Thomas Vachon from Kepler Cheuvreux. I have two questions as well, please. The first one is essentially about the reconciliation about your comments on car affordability that becomes an increasing issue with these additional revenues you expect with some customers to pay. So can you help us understanding that, please? 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 very low multiple. So at one 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 the market for the time being remains skeptical? Thank you very much. Well, thank you, Thomas. Thank you for the two very I thoughtful will hand over the first one to Yves, and then let me take the second one. First of all, you are right. We are in a 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 we will group all of those pillars in the presentation that we are going to make on 03/01/2022 of the long term strategic plan for Telanis. So yes, we are on the move. Did the market completely recognize the depth and the breadth of the transformation of Cerenity's? Possibly not. Possibly not. That's something that we 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 talent piece 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 talents to the company. And I see that those people are finding the right breath, the right breathing space in the company. We are giving them the right 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. Ivan, the first point. Thanks a lot for the question. I think that's fundamental to understand our why customers are going to be attracted by subscribing to those 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 the features we will continue to develop features. So some features that will become available were not available at the time where the customer is going to buy. So this is really an opportunity for them to improve the vehicle. We think that we're not, I would say, fulfilled at the time where 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. The next question comes from the line of Jose Asimandi from JPMorgan. Please go ahead. Thank you very much, Jose. JPMorgan. One question, Thank you very much for the presentation. Very interesting. 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 semiconductor content to range between the small platform and the frame platform? And how you are customizing that silicon data content across different vehicles to generate the revenue? And maybe just as a quick follow-up, Richard, I don't see the number disclosed for investment, specifically for software. Are you giving us a number for certification of software at State Bank? 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 the 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 needs 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, do you want to add something to this? I think, it's really important to simplify our our our our platform. So today, for example, we have hundreds of different types of chips that are just quite complex. Our environment is complex. So we to Carlos' point, the the mid and long term, we're gonna just simplify it, and it's gonna allow us then to use the software really in a very differentiated way on one side and on the flip side of that, does our supply chain gonna get much simpler as well. So this type of experience that we have today with the shortages of semiconductors, I will definitely plan to avoid in the future while providing, you know, value down down the the softer channel. Thank you, Ned. Richard, you want to take the the other one? Yeah. Thanks, Carlos. So we talked about the overall investments for EV bus software in the period twenty one to twenty five being over €30,000,000,000. I think, you know, on an annual basis, we're looking at something like 15% to 20% of that number is related to the development of software components of this business business plan. So, you know, clearly, we continue to believe that we are around 30% more efficient in our competition in the way we apply capital to to our business, and we can see that we've paused that in the past. So, again, with the the 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 resource to be successful. And the next question comes from the line of Gabriel Adler from Citi. Please go ahead. Hi, thanks for taking my questions. I also got two, please. The first one, how are you trying to price for this additional content? Because historically, the industry has sometimes struggled to pass through additional content and technology to customers in higher prices with some customers reticent to pay for additional technology. So did your market research suggest that this is different with software? And you believe that your customers are willing to pay more vehicles for SaaS subscription, whether there's more advanced connectivity? That's my first question. 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? Thank you. Well, thank you for those two questions. I would like to take the first one and then hand over to Yves for more details. But one thing that I'm sure you recognize is the fact that 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 the and the entertainment, it has to attract the customer, which is, of course, the core of this 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 markets 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 two 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 three tech platforms we announced today, they're going to replace massive complexity in terms of a system that had accumulated over the years and also, of course, in the context of the measures the merger between former P and former F, where we have the two complexity coming together. So the potential we have with synergies combined with complexity reduction, massive complexity reduction on the hardware is gonna 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, Stella Small up to Stella 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 Telantis because we can develop the software features we've been talking about and deploy them on the full lineup and total global sales of Telantis. 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 01/01/2022. 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 will see that we we are indeed fixing it. It's clear that it has been a focus for the teams coming from the two former companies that merged both needed to fix it, and we are right now in good pace and good track to get the job done. So hopefully, I will present to you the final conclusion of this work when we present the full plan in 03/01/2022. Thank you. The next question comes from the line of Patrick Connell from UBS. Please go ahead. Yes, thank you. Good afternoon, Carlos and Richard and team. Thanks for taking my question. 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's 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, you know, 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 entrants is 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, you know, to end up in a scenario in which every player acts extremely disciplined and and really, you know, stays stays very focused on monetizing rather than, you know, 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 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's end up well, you're basically saying out of the €30,000,000,000 overall spend into the future growth areas, 15% to 20% going into software, which to me sounds like it's about €1,000,000,000 per year. And assuming a 20% EBIT margin on the business, it sounds like you need basically €5,000,000,000 of annual revenues before you will break even with that business. Is that a fair back of the envelope calculation to do? Well, thank you. Thank you for the two 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. Oh, yeah. I'll do that. 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, 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 are highlighting, and rightly so, the pressure on the pricing. I would like to highlight our ability to have a highly competitive cost on three 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 strengths. 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 and D and CapEx expense. So when you combine those three 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 being one of the most efficient companies in the world on that matter. It doesn't it doesn't answer to your fair points 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 digital value. 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 with Celebantis on this matter and the former companies of our of our of our company. So that's something that we we need to consider. At the end of the day, execution is going to be cheap as we all know. Thanks, Carlos. So, obviously, the I think the math is really sort of arithmetically correct, but I don't think it's it's irrelevant. And it's like it's very building an a transformational business here within the car company to become, you know, a software enabled services and features provider together with the mobility. So we're investing in the platform for the new electric platform we talked about, the software platform. Those will be put together with the 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 investment phase. And then as we grow the business through to the 4,000,000,000 of revenues by '26 and the 20,000,000,000 by by 2013, clearly, the the 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 in 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. Yeah. I think I think one one key element is in the 20,000,000,000 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 20,000,000,000 in the at least 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 €20,000,000 which comes on top. And of course, this is something that 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 €400,000,000 of revenue that we're making. So there is a little bit of non full overlap between the R and 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 Chaudhos from Lizzie Nouvelle. Hello. You plan 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 a better capability to all our programs to raise their their own share. That's quite clear. While we do this, what the total market will 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 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 Telenetis. We have seen what has been done over the last year, I should say eleven months. It's amazing how many things have been done. It's amazing the passion of the Cervantes people to create those innovative plans and then to get them executed. So that's that's where we are today. And, of course, I will be blessed and honored to present to you the full plan in 03/01/2022. The next question comes from the line of Philippe Houchois from Jefferies. Please go ahead. Thank you and good afternoon. Yes, very interesting question presentations and appreciate that. I wanna go back to some of the software, you know, issues. The first one, I think, is on the benefit of scale that you talked about and the synergies that 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 hang the brands with more 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 of the synergies, dis synergies, a different form of complexity. In other words, how scalable some the technology is across regions. Now you have North America, you have Europe, you may talk to us about China in March. And so that would be interesting to me. And and the second point is a bit technical as well, but I'm you know, data is obviously, you hugely important for the industry and for you and you're among the largest carmakers in the world. Now 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, it's a risky situation. Do you think we need to create own cloud cloud capabilities? Thank you. Those are two 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 two questions, feel that Yves is really excited about giving you the answers. Yves, please. Thank you, Carlos. So on the first one, I just would like to to give an example. You you showed the the Jeep plateauing 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 to go off track. We're gonna use the exact same software modules to create the same service with a different flavor for our friends and family brands, say, Chrysler or T2N in Europe, where you will have communication capabilities with two or three 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 the 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 the synergies that we're talking about in relation with brands by getting to the next level of modularization in technology. That to the brands. To the regions, we're acting with global platforms, taking, of course, into account the specificities the regions. But here, again, our plan is to reduce complexity to the maximum and be extremely modular in our code base. This is this is fundamental, and we've, I think, dig very deep into that to to try and and get it right. On the cloud thing, you know, I think, yes, the market is very concentrated, but cloud operators have gained the level of efficiency that we would probably not be able to replicate in the short term. So in the short term, we will definitely go the market route, but 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, Yannen, as part of the as your CTO, you want to comment to that as well. Yep. Yeah. Thanks. Thanks, Hugh. First, on the on the software piece, well, if you if you look at 14 brands, historically, a lot of these brands have developed complete vertically integrated software stack or data partners developing it, so it's quite expensive. In a in a new world, we can actually build 8080% of the software that just use across all 14 brands. The 20% difference in a stock is the sort of a customization and the services side and experience side the customers will enjoy brand to brand. But as Ian talked about, this this this 80% is gonna glue all the brands together. It's it's gonna be, you know, fantastic scale and a synergy opportunity for us. So I see it's quite quite a bit opposite to to to the to the comment. On the data side, it's very hard to compete to to the cloud providers and the scale that they provide. So if you look at the the the cloud storage cost that we pay today, they've been sort of coming down in cost. So we do anticipate that the cost on the on the storage and the cloud side is gonna continue to to climb down. And, eventually, we're gonna look at this space and close it, 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 close 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 Sanofi's booth at CES in Las Vegas. Thank you again. Goodbye, and keep well.

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