Not every automaker is trying to milk you for every cent. Well, at least not with subscriptions.
Subscriptions have become a major revenue stream for certain brands, especially as vehicles become increasingly connected. “Software-as-a-service” is a big part of the auto industry, whether we like it or not, because automakers can now add features and updates remotely. These subscriptions often include features like heated seats, AI assistants, and Level 2 driving systems (like Tesla’s Full Self-Driving mode, which is $99 a month). GM reportedly made $2.7 billion in realized revenue and $5.4 billion in deferred revenue from OnStar and Super Cruise subscriptions last year.
So suckers do exist.
Volvo clarifies what subscriptions should be used for
Motor1 Italy recently interviewed Volvo’s Chief Commercial Officer, Eric Severinson, about the future of the brand. And subscriptions are part of it, but they are hoping to keep it fair.
If a vehicle is considered luxury, with a premium price tag, Severinson said that automakers shouldn’t be “nickel-and-diming” its customers. Making them pay extra for heated seats and other basic functions, which are usually included in higher trims, isn’t how subscriptions should be used.
“A paid model can make sense for more comprehensive software-based services: connectivity packages or advanced driver-assistance suites, possibly bundled. As with services like Netflix or Disney+, a subscription can provide access to additional, valuable content,” he explained. “But the goal remains to make the customer feel like they’re getting a premium, hassle-free experience — that’s what creates value and, in turn, profit.”
Right now, Volvo offers two subscription categories. The first is Care by Volvo, which includes insurance, factory-scheduled maintenance, 24/7 roadside assistance, and tire protection. This covers 1,250 miles per month. I find this one pretty useful, since you are getting a lot of useful assistance that you’d otherwise have to pay for. It’s basically like paying for AAA. Volvo also offers app subscriptions that let you remote start, remote lock, and control your car’s climate. This one is pretty lame and should just come with the car rather than paying an extra $100 or so a year.
So much for not nickel-and-diming us, Volvo.
However, this is in reference to BMW. The automaker infamously rolled out a subscription model in 2022 to use the existing hardware in the vehicle you already bought. You’d need to pay $10 per month for a heated steering wheel and another $18 for heated seats. This infuriated car enthusiasts, who felt it was disturbing to make drivers pay extra for something already installed and ready to go in the car.
So what about stuff like driver-assistance? That has received more mixed responses from the car community. Many drivers seem to think it’s fair, although Tesla’s specific driver-assistance subscription has been under fire recently for not working as intended. One Tesla owner even got $10,500 after suing Tesla for promising autonomous driving when it’s basically Level 2.
Would you pay $100 a month for an AI assistant to make fun of your driving skills and tell you where the nearest Starbucks is? Would you pay $100 a month to be able to let go of your steering wheel for five minutes on the highway? Well, GM has proven that people are willing to pay for this stuff, so I don’t think it’ll slow down any time soon.
But hey, at least we have our free heated seats.
