GM vehicle buyers can pay $135 per month for subscription features
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It seems that automakers are doing everything they can to force a subscription model on customers, but for many consumers, this seems like a double investment. Now GM is betting on this model, suggesting it could charge up to $135 a month for features already built into cars but activated via software.
With the phasing out of combustion engine cars on the horizon and direct-to-consumer sales shaping the future of car buying, once-transparent revenue streams between consumers and manufacturers are disappearing. This leaves OEMs with the challenge of finding new ways to make money, and today that means switching to subscription services.
Subscription Models to Increase Revenue
As a result, automakers are becoming more like Big Tech. By using subscription models, OEMs can potentially earn a stable and predictable income by paying customers for features that are already in the car but are blocked by software. As Axios notes, General Motors expects consumers to pay up to $135 a month just for a subscription.
Subscriptions are now easier than ever to implement
Cars change whether we like it or not. Much of this change has to do with connectivity, meaning that cars can use a persistent Internet connection to call home. While this has some advantages, such as over-the-air updates and real-time telematics, more sophisticated software also opens up the possibility for the automaker to enable (or disable) features with full automation rather than a visit to the dealer.
It's no secret that new cars are also a huge expense in the average consumer's budget. In fact, the average price of a new car topped $45,000 in 2021 in '60, bringing the average cost of an 820-month prime auto loan to almost $XNUMX a month.
GM says customers are willing to pay for these subscription models
Earlier, General Motors senior vice president of innovation and development, Alan Wexler, said the company's research showed that consumers are willing to pay up to $135 a month to maintain their vehicles. By 2030, GM expects 30 million of its vehicles on US roads to be equipped with some form of connected technology, and this will help the automaker generate $20,000 to $25,000 billion in additional revenue, a huge part of which comes from one or two purchases or subscriptions.
However, the survey shows that the majority of consumers do not want a subscription.
A recent survey found that 75% of car buyers said they didn't want features locked behind car subscriptions, contradicting GM's research on the matter. The majority of consumers who took part in the survey said that safety and comfort features (such as lane keeping, remote start, and heated and cooled seats) should be included in the price of the car, rather than added later when using a subscription model.
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