It’s easy to assume that these subscription services are just a way to squeeze more money out of consumers, but they also offer distinct benefits to car owners. “A lot of these cars have new technology that needs to be updated,” says Barry. “There is an advantage to updating the software in the cars. Now you don’t need to update by bringing a car to the dealership. They can just pass it on to you.
In some cases, this involves correcting problems in the software supplied with the car; in others, it deploys a new feature that improves the car.
“As cars learn more about their surroundings, they tell their builders,” Jominy says. “Things like adaptive cruise will get smarter over time. It’s a very expensive job, and part of that makes sense. If you want the latest adaptive controls, it’s going to cost you more.”
Tesla is already charging to increase its Autopilot functionality. Every new Tesla comes with the basic Autopilot package, but you can pay more for the enhanced Autopilot or, for an additional $199 per month, you can sign up for what the company calls full self-driving capability.
A used car opportunity
Feature subscriptions could be even greater in the used car market than with new cars. “I really see it as giving consumers more options after purchase. When you think about it, cars have a long lifespan. [and] the second owner is stuck with the car that the original owner bought,” says Jominy. “It allows second and third owners to have a car more to their liking. And that saves automakers money over the life of the car.
There is, however, a potential concern if automakers start charging for more than truly optional add-ons, but rather necessary safety features. “We absolutely hope that doesn’t happen,” Barry says. “That safety issues are missing in vehicles – I certainly hope automakers wouldn’t. Where it gets tricky is the convenience features. Things like adaptive cruise control and centering These are not necessary safety features, but they make driving less stressful and more comfortable.”
And don’t be surprised to see people finding a way around the fee. There are already stories of vehicle hackers working on ways to unlock features that automakers want consumers to buy.
Will consumers accept fees for automotive features? There was a time not so long ago when the idea of paying to watch TV seemed ridiculous. Then came basic cable, followed by premium services like HBO. Today, almost every household pays for some form of streaming content.
And just as the television landscape has evolved, Barry is confident the automotive world will see a change as well. “The power of the subscription model has been proven in many different industries,” he says. “In one form or another, we are going to pay for our cars differently than we did five or 10 years ago.”