An Innovative Solution for Modern Drivers or a way for Car companies to get more money from drivers?
In the past car companies had a simple business model… Produce a great car and then sell it for a fair price to customers. This principle was followed for years up to the 10s of the twenty-first century.
What happened then?
Many ecological issues with naturally aspirated engines that produce huge amounts of carbon footprint and rising gas prices provide car companies to down-size engines and put turbos inside small engines. Until then turbos were well-known for supporting strong engines in sports cars like for example Porsche 911 Turbo, but times changed.
These days, any petrolhead will tell you that those underpowered turbocharged engines are terrible. Right now, we see that these very breakdown vehicles can’t go more than 200,000 kilometers without paying a lot of money for a turbo rebuild or even an engine replacement.
Many people consider that it’s a result of changing the policy of companies from,, We want our cars to be unbreakable for years “ to ,, Pay us frequently for car service, and then maybe you will be able to drive”. That’s an easy deal when the car is well built then the company after selling it to the customer, cannot make a profit in the future from this vehicle.
Car enthusiasts like me began to suspect that companies are doing this just to make more profit. After a few years, we are in 2023 and car companies are going even further with money-making.
In this article, I will tell you something about what divides the opinions of many drivers all over the world.
New vehicles are now equipped with connected features such as heated seats and assisted driving. These extra features can be enabled or disabled by the automaker through a wireless connection to the internet and can be accessed through either a monthly or annual subscription fee, or a one-time charge. This shift presents an opportunity for automakers to increase their revenue, but it also has the potential to anger customers if certain features are locked behind a paid subscription.
According to a report from McKinsey & Co, revenue from connected cars could reach $550 billion by 2030, up from $64 billion in 2020. Automakers like General Motors and Stellantis aim to generate billions from software and services from their connected vehicles. However, a survey conducted by Cox Automotive showed that only 25% of people were willing to pay subscription fees for in-car services. The majority of buyers expect features and services to be part of the total purchase price.
One company that is offering a different approach to connected car upgrades is Polestar. They are offering a $1,595 over-the-air upgrade that adds 68 horsepower and 15 lb-ft of torque to the Polestar 2 electric car. This upgrade is a one-time purchase and stays with the car, potentially increasing its value. On the other hand, Mercedes-Benz is offering a similar Acceleration Increase option as an annual subscription.
In South Korea, BMW faced backlash when they offered a heated-seat subscription plan for $18 per month. This plan has since been dropped and heated seats will now be enabled from the start.
In addition, it terrifies many people that cars are connected to the network. However, as we see it’s a big deal when a car company can influence features in cars. It’s good to mention that we have seen good and not money-motivated instances provided by Tesla in the past. When an Irma Hurricane was ravaging Florida in 2017, Tesla remotely uploaded some free updates to the cars of their customers to give their cars more mileage range to help them escape an endangered area.
As the shift to connected and autonomous vehicles continues, automakers need to consider their approach to offering extra features and services. A one-time purchase option, like Polestar’s, has the potential to increase customer satisfaction and the value of the vehicle. On the other hand, locking features behind a monthly or annual subscription fee could result in customer frustration. It will be interesting to see how automakers navigate this new landscape and find the right balance between boosting revenue and keeping customers happy.
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For me this idea is totaly insane and no serious car company should consider that, while it may sound convenient to for example pay montlhy subscription for heated seats only in winter season. It will only expose the manufacture to cyber attacks, as all options will be available in the car and people will try to crack them.
In my opinion, monthly subscriptions payments and paying for features that the car already has is not a good solution. Customers are more likely to buy a car with the features they need and want. Furthermore, it will be a waste of materials and technologies when the features will not be used. It is a controversial topic.
I believe that the idea of implementing monthly subscriptions for additional features is a horrible solution. People pay significant amount of money for those cars and charging them additional costs sounds like trying only to get more money. In my opinion companies should try to find different solutions for their problems.