from the pay-more-for-the-same-product dept
At the same time car companies are fighting the right to repair movement (and the state and federal legislation popping up everywhere), they’re continuing the quest to turn everyday features — like heated seats — into something users have to pay a recurring fee for.
In 2019, BMW had to abandon a plan to charge $80 per year for Apple CarPlay. The company, having learned nothing, began floating the idea of charging a subscription for features back in 2020, when it proposed making heated seats and heated steering wheels something you pay a permanent monthly fee for. Last December, Toyota proposed imposing a monthly fee for customers who wanted to be able to remotely start their vehicles.
Each and every time these proposals come forward the consumer response is swift and overwhelmingly negative. But with $20 billion in annual additional potential revenue on the table between now and 2030, the industry seems poised to ignore consumers:
“Still, automakers see dollar signs. Stellantis (formerly Fiat Chrysler), Ford, and GM each aim to generate at least $20 billion in annual revenue from software services by 2030. Over-the-air capabilities open up huge opportunities for carmakers to introduce new subscription or pay-per use features over time, Wakefield, of AlixPartners, said. Someday, you may be able to fork over extra to make your car more efficient, sportier, or — in an electric vehicle — unlock extra range for road trips.”
Keep in mind these are decisions being made during a pandemic when most households continue to struggle.
This sort of nickel-and-diming works well in the telecom sector where captive subscribers often can’t switch to a different competitor. But in the auto space, companies risk opening the door to competitors gaining inroads by… not being nickel-and-diming assholes. Many companies may also be overestimating their own product quality; one JD Power survey found that 58% of people who use an automaker’s smartphone app wouldn’t be willing to pay for it. At the same time, as with gaming microtransactions, if enough people are willing to pay to make it worth it, it may not matter what the majority of car consumers think.
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Filed Under: automakers, features, fees, right to repair, subscriptions
Companies: ford, gm, toyota
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