5 days ago
Stellantis to End In-Car Technology Partnership With Amazon
Stellantis N.V. STLA is reportedly winding down its collaboration with Amazon AMZN to create in-car software with connected products and services. The joint project, Stellantis SmartCockpit, was started three years ago as part of STLA's goal to generate $22.5 billion annually from software.
The JV aimed to transform the driving experience by integrating sophisticated vehicle software enabling detection of the driver, personalization of the thermostat, navigation and other settings. Stellantis hoped this technology would enhance its competitiveness against software-focused rivals like Tesla.
However, in the process, Stellantis faced the challenge of implementing software across 14 brands. Other traditional automakers have also struggled to add sophisticated software. It is reported that Amazon staff working on this project have either been reassigned or no longer with the company.
The in-car software revenue strategy laid out by Stellantis included three key components, an electrical and software architecture system called Brain, a platform to deliver applications to the driver called STLA SmartCockpit and an automated driving platform called AutoDrive.
While the partnership with Amazon on SmartCockpit is ending, Stellantis remains committed to the broader SmartCockpit concept and is now expected to pivot to a Google Android-based system for its future software interface.
Having said that, STLA's relationship with AMZN is not fully ending. Stellantis will continue to use Amazon Web Services as its preferred cloud provider for vehicle platforms. Amazon Alexa voice assistant will still be available in Stellantis vehicles.
Some other upcoming software-related projects announced by Stellantis are STLA Autodrive, an automated driving system for speeds up to 37mph, and an AI-driven project in partnership with Mistral AI to include an artificial intelligence-powered in-car assistant.
STLA stock has lost 54.4% over the past year compared with the industry's 16.4% decline.
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STLA currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Auto space are Rivian Automotive RIVN and Standard Motor Products SMP, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Rivian's current-year loss is pegged at $2.49 per share. The figure implies a 38.37% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters while missing the rest. Rivian delivered an average earnings surprise of 10.81%.
The Zacks Consensus Estimate for SMP's current-year earnings is pegged at $3.57 per share, indicating a 12.62% year-over-year earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 38.55%. SMP's shares have gained 2.5% in the past year.
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