Why Automakers’ Plans To Squeeze Subscription Dollars Out Of You Forever Might Not Work

Tmd Ts 062024
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The average age of a car on the road continues to stretch toward infinity, meaning that automakers are waiting longer to sell someone a new car. As car companies are in the money-making business, it would be much better for them if you had to keep paying them. But would it be much better for you?

A new survey shows that, in fact, most people don’t love this idea, even if they’re generally satisfied with the services they have now.

Do you know who is selling more electric cars? Pretty much everyone who isn’t Tesla, thanks to a lot of incentives. At least in the United States. In Europe, EV sales are slumping, especially in Germany.

And, finally, it sounds like Ford’s smaller EV plant in Michigan will continue to go forward over the complaints of some locals.

Most People Would Rather Not Pay A Subscription For Their Car

Cadillac Gm Onstar 19972

 

Subscription services for cars have existed for a while and not all are completely terrible. Safety subscriptions like GM’s OnStar do offer an enhanced experience for a little extra money. The same is true of things like satellite radio. Even some advanced safety features, like Tesla’s FSD, theoretically offer customers a little more for extra money.

There is a line, however, and BMW crossed it when it tried to charge people a monthly subscription for heated seats. There’s just something especially galling about having to pay for a capability your car has built into it.

S&P Global Mobility surveyed about 8,000 adults globally to discover how they felt about these services. You can read the summary here, but the general vibe is that people are generally ok with their current services in their current cars and … that might be it.

S&P Global Mobility’s survey indicated declining satisfaction levels across all connected services categories compared with the previous year. The highest satisfaction was reported for navigation, personalization and infotainment, while the lowest was for safety and security. Paid functional updates showed high satisfaction in safety, comfort, infotainment, navigation and advanced driver-assistance systems (ADAS). Willingness to pay was highest for safety and electric vehicle services and lowest for navigation and infotainment.

Consumers expressed a strong desire for navigation and safety and security services in their next vehicle, while productivity services were the least desired. The desirability of EV services and personalization are on the rise. For paid functional updates, enhanced navigation, smartphone integration and basic ADAS functionality were highly desirable. About 39% of respondents preferred an annual subscription for these updates.

That last little bit there is a little hard to parse, but if 39% of people prefer an annual subscription for services then it’s not unreasonable to assume that 61% do not. Even that sounds high to me. Elsewhere in the survey, S&P notes that there was a “slight decline in the likelihood of recommending connected services brands.”

My sense of this is that people still expect that what you get with your car is what you get, and charging extra for a capability that seems like a basic function isn’t going to fly. This whole concept is something beancounters love, but regular people do not.

Modification and upgrades are another matter. No one would expect to go to a dealership and get nice wheels, a power bump, or other capabilities for free. If automakers can offer more paid upgrades or customizations that’s maybe something.

But charging more for, like, navigation? I’m not convinced. Or, as S&P puts it:

“The holy grail of paid updates and subscription services could be another empty vessel from which the industry drinks.”

Harsh, but probably true.

It Might Be A Good Quarter For EVs… For Everyone Who Isn’t Tesla

Toyota ev rebate

Most companies these days only give out quarterly sales data, so we’re always at a bit of delay in seeing a full picture of the market in between quarters. Thankfully, S&P Global also tracks monthly registrations and it looks like EV sales rose 14% following a kinda meh first quarter.

Part of this is that people want EVs, and another big part of it is that automakers are tossing $10,000+ on the hood of certain models, even those with price cuts over the last year. From Automotive News:

Overall, new EV registrations totaled 102,317 in April, the most recent month for which data is available. EVs grabbed a 7.4 percent share of total light-vehicle registrations, regardless of fuel type, which reached nearly 1.4 million, S&P Global Mobility said. The double-digit increase for EVs outpaced the 7.3 percent gain in the overall light-vehicle market.

The EV data is only for the registration of new battery-electric vehicles and does not include hybrids.

The two most popular EVs in April were still the Tesla Model Y and Model 3, but they saw a 4.7% and 55.1% decline in year-over-year registrations, respectively. At the same time, the Mach-E and bZ4X saw increases of 287% and 647%, respectively. Even the Rivian R1S was doing better, up 129% year-over-year.

I’m curious to see if Toyota can continue to sell the Bees Forks to people who kinda want an EV but definitely want a Toyota.

Germany Is A Drag On European EV Sales

P90550216 Highres The Bmw Xm Allure CaWhile it’s not proportionally the most electrified country in Europe (that would be Norway), by volume Germany is still the biggest EV market on the continent.

Recent cuts to subsidies for electric cars have done exactly what you might imagine, and EV sales in Germany dropped by 30% in May, dragging down the overall EU number of BEV sales by 12% year-over-year. Belgium is up 45% though!

Should we panic?

Per Reuters:

The current stagnation of the EV market has been expected for years but sales should pick up from 2025 when the next EU car emission targets kick in, European campaign group Transport & Environment (T&E) said in a briefing on Thursday.

Overall, hybrids/PHEVs/BEVs accounted for almost half of all new registrations in the EU in May, so people are still buying “electrified” cars if not full EVs.

Ford Can Continue Battery Plant In Michigan

Blue Oval Battery BlueovalThe politics of Michigan continue to be fascinating to me, partially because what happens to Michigan in November will likely have a huge impact on the country.

All politics is local, however, and Ford’s plan to build a (now smaller) battery plant in Marshall, Michigan can continue according to the Michigan Court of Appeals. What happened?

While the local government approved a battery plant (the BlueOval Battery Pack) a group of citizens attempted to kill the new construction, citing its closeness to a river and the way the City of Marshall’s process is structured. That same group tried to put a referendum on the ballot, but it was dismissed by a lower court due the group not having standing.

That same group of citizens appealed the decisions but lost on appeal according to The Detroit News. This is a win for Ford, sure, but even the locals said this wasn’t an anti-Ford thing. Mostly this is a win for the state’s economic planners, which are trying to build out as much EV factory capacity as it can in the run-up to what’s expected to be an expansion of battery demand.

What I’m Listening To While Writing TMD

If pissing your pants is cool, consider me Miles Davis.

The Big Question

Is there anything you’d pay money for on a monthly basis for your car?

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101 thoughts on “Why Automakers’ Plans To Squeeze Subscription Dollars Out Of You Forever Might Not Work

  1. Other than the car itself, no, and even that I don’t want to do (or have done in the past 20 years).

    BUT, I know it’s coming, and will continue to rock unconnected cars as long as possible.

    EDIT: OH SHIT, my Autopian membership. That is the only automotive subscription I want.

  2. I just asked a local Toyota dealership if they had a bZ4X for a test drive. They said they don’t really get them around here; that they’d have to order one at which point I’d basically have to buy it.

    Still waiting for an opportunity to test-drive any eV, but would rather do something like a Bess Forks or an E-Transit to get a more “reasonable”/slow-ish experience.

  3. I just asked a local Toyota dealership if they had a bZ4X for a test drive. They said they don’t really get them around here; that they’d have to order one at which point I’d basically have to buy it.

    Still waiting for an opportunity to test-drive any eV, but would rather do something like a Bess Forks or an E-Transit to get a more “reasonable”/slow-ish experience.

  4. Here’s the thing about subscription-based services in the car:
    You have to add something of value that requires additional cost over time. This can’t just be various software updates or something that could be handled every year at your regular dealer service either.

    With Onstar, GM had to pay for the network access to continuously monitor the vehicle and safety systems. At the time it made sense. At the time…
    Likewise, at the beginning we needed a connection to satellites for navigation. But wait, we weren’t charged monthly, just an exorbitant amount for the initial tech package and a ridiculous maps upgrade every damn year. It’s one of those things that I think people realized instinctively was a ripoff, but at least there was a reason it carried an additional cost.

    Widespread use of smartphones changed all of this. Now we are all paying every month for the network access, all the time. There are also a ton of things we pay for every month to have access to added features that enhance our lives. Music subscriptions, TV/Movies, software that adds value to our lives and broadens our interests.

    The main thing that the auto manufacturers don’t want to accept is that, due to us being so used to smartphones and apps and all the things we now have, paying for a subscription for just those times we are in a car is never going to be acceptable. Ever. We use our phones everywhere we go, at every occasion. We can mirror what’s on our phone to our huge OLED TV in the living room or use it to watch in a hotel on vacation around the world.

    You cannot tell me I have to pay for services I could get on my phone that I’m already paying for, that are only good while I’m driving or using my car. It’s not going to fly. We already know you can enable the car to access my phone and use my existing subscriptions so I’m not giving more to you for that. Just. Stop.

    You want more money and you want people to pay monthly or yearly? Find something that adds value, doesn’t duplicate what I already have and would not otherwise make sense as a stand-alone option in the car that requires ongoing maintenance, connection or some other “Thing®” that gives me an enhancement to my car ownership. Just changing the business model to one that gives you and you alone an advantage is just not going to fly.

  5. Here’s the thing about subscription-based services in the car:
    You have to add something of value that requires additional cost over time. This can’t just be various software updates or something that could be handled every year at your regular dealer service either.

    With Onstar, GM had to pay for the network access to continuously monitor the vehicle and safety systems. At the time it made sense. At the time…
    Likewise, at the beginning we needed a connection to satellites for navigation. But wait, we weren’t charged monthly, just an exorbitant amount for the initial tech package and a ridiculous maps upgrade every damn year. It’s one of those things that I think people realized instinctively was a ripoff, but at least there was a reason it carried an additional cost.

    Widespread use of smartphones changed all of this. Now we are all paying every month for the network access, all the time. There are also a ton of things we pay for every month to have access to added features that enhance our lives. Music subscriptions, TV/Movies, software that adds value to our lives and broadens our interests.

    The main thing that the auto manufacturers don’t want to accept is that, due to us being so used to smartphones and apps and all the things we now have, paying for a subscription for just those times we are in a car is never going to be acceptable. Ever. We use our phones everywhere we go, at every occasion. We can mirror what’s on our phone to our huge OLED TV in the living room or use it to watch in a hotel on vacation around the world.

    You cannot tell me I have to pay for services I could get on my phone that I’m already paying for, that are only good while I’m driving or using my car. It’s not going to fly. We already know you can enable the car to access my phone and use my existing subscriptions so I’m not giving more to you for that. Just. Stop.

    You want more money and you want people to pay monthly or yearly? Find something that adds value, doesn’t duplicate what I already have and would not otherwise make sense as a stand-alone option in the car that requires ongoing maintenance, connection or some other “Thing®” that gives me an enhancement to my car ownership. Just changing the business model to one that gives you and you alone an advantage is just not going to fly.

  6. “For paid functional updates, enhanced navigation, smartphone integration and basic ADAS functionality were highly desirable. About 39% of respondents preferred an annual subscription for these updates.”

    Vs what, eating a bowl of spiders every morning for the rest of their lives? Vs a humiliating kick to the crotch? Vs paying fantasy Ferrari money for a rusted out 40 yo AT Chevette running on three cylinders?

    We need context.

    1. That got me too. I’m imagining the options were “monthly, annual at slightly reduced cost, and being slowly lowered into this vat of supervillain acid.”

  7. “For paid functional updates, enhanced navigation, smartphone integration and basic ADAS functionality were highly desirable. About 39% of respondents preferred an annual subscription for these updates.”

    Vs what, eating a bowl of spiders every morning for the rest of their lives? Vs a humiliating kick to the crotch? Vs paying fantasy Ferrari money for a rusted out 40 yo AT Chevette running on three cylinders?

    We need context.

    1. That got me too. I’m imagining the options were “monthly, annual at slightly reduced cost, and being slowly lowered into this vat of supervillain acid.”

  8. The basic line for subscriptions is that if it costs the company money month over month to provide it AND it enhances my experience, I’m cool with it for a reasonable price, but if I’m only paying for access to a client-side tool or feature, it’s extortion. It’s even more egregious if the company has to spend extra money just to stop me from using it, as is usually the case with such features.

    1. I should also add that paying for “updates” is just giving the manufacturer permission to ship you an unfinished car and the sell you the fixes to their problems. I’d say it’s even worse than spending millions on cybersecurity to stop people from using their own seats.

  9. The basic line for subscriptions is that if it costs the company money month over month to provide it AND it enhances my experience, I’m cool with it for a reasonable price, but if I’m only paying for access to a client-side tool or feature, it’s extortion. It’s even more egregious if the company has to spend extra money just to stop me from using it, as is usually the case with such features.

    1. I should also add that paying for “updates” is just giving the manufacturer permission to ship you an unfinished car and the sell you the fixes to their problems. I’d say it’s even worse than spending millions on cybersecurity to stop people from using their own seats.

  10. I pay for SiriusXM and only sign up when they decided that they really want to give me a good price. Navigation is AA and that is free for me. The built in nav in my new car is by Tom Tom and is missing roads that were built back in 1989. Didn’t even know Tom Tom was still in business, but that might account for veeerrrrryyyy outdated maps.

    1. FWIW, TomTom have almost entirely pulled out of the US navigation market except for in-built car nav and phone apps. I no longer get great support for my Rider550 (motorcycle GPS), which is a major bummer.

  11. I pay for SiriusXM and only sign up when they decided that they really want to give me a good price. Navigation is AA and that is free for me. The built in nav in my new car is by Tom Tom and is missing roads that were built back in 1989. Didn’t even know Tom Tom was still in business, but that might account for veeerrrrryyyy outdated maps.

    1. FWIW, TomTom have almost entirely pulled out of the US navigation market except for in-built car nav and phone apps. I no longer get great support for my Rider550 (motorcycle GPS), which is a major bummer.

  12. The problem with vehicle subscriptions is that these cars are so computerized that the subscription model even works in the first place. I have never bought a car that has any subscription services and would never buy into that nonsense. People are moving further away from the idea of ownership and that’s a bad thing because industry and government keep telling us we need to keep paying. For example property taxes on a home you own and access to movies on a streaming platform that you’ve paid for but probably won’t be able to watch in 25 years.

    1. I’m with you on the streaming services, but the property taxes…not so much. Those (where I am, very high) taxes go towards great parks, smooth roads, and the best public schools in the state, and free public transit.

      I’m okay with that.

  13. The problem with vehicle subscriptions is that these cars are so computerized that the subscription model even works in the first place. I have never bought a car that has any subscription services and would never buy into that nonsense. People are moving further away from the idea of ownership and that’s a bad thing because industry and government keep telling us we need to keep paying. For example property taxes on a home you own and access to movies on a streaming platform that you’ve paid for but probably won’t be able to watch in 25 years.

    1. I’m with you on the streaming services, but the property taxes…not so much. Those (where I am, very high) taxes go towards great parks, smooth roads, and the best public schools in the state, and free public transit.

      I’m okay with that.

  14. Right now, my only car subscription is auto insurance and I don’t want any other subscriptions related to my car. Mercedes had a nice app where I could track my car, start it remotely, lock or unlock it remotely, etc. but when they tried to charge me for it after 3 years, I said no. Satellite based navigation is great because it works without a phone signal, but I am so rarely anywhere without a phone signal that I wouldn’t subscribe to it. Onstar type services are a big maybe. The likelihood of reaching my phone in an accident is small, but then so is my risk of an accident in an area where nobody would see it. All I want is to get what I pay for and only pay for it once.

    1. My CX-30 has similar phone app functionality, and when I bought it they said 3 years free, but had not announced pricing beyond that, and I don’t believe they have even now. I WOULD consider it if the price was right, I find it very handy and adds some peace of mind should I need it, and having a warm car in the winter on the way to work is wonderful.

      The key there being the price, and if I can do a one-time annual payment rather than month to month. If it was on the order of $60-100/year sure, but over 150/year? Nope, not worth it.

      1. It might have been worth it if I used it more, but I think they wanted $10 or $15 per month and I really only used it a handful of times in the three years I had it.

  15. Right now, my only car subscription is auto insurance and I don’t want any other subscriptions related to my car. Mercedes had a nice app where I could track my car, start it remotely, lock or unlock it remotely, etc. but when they tried to charge me for it after 3 years, I said no. Satellite based navigation is great because it works without a phone signal, but I am so rarely anywhere without a phone signal that I wouldn’t subscribe to it. Onstar type services are a big maybe. The likelihood of reaching my phone in an accident is small, but then so is my risk of an accident in an area where nobody would see it. All I want is to get what I pay for and only pay for it once.

    1. My CX-30 has similar phone app functionality, and when I bought it they said 3 years free, but had not announced pricing beyond that, and I don’t believe they have even now. I WOULD consider it if the price was right, I find it very handy and adds some peace of mind should I need it, and having a warm car in the winter on the way to work is wonderful.

      The key there being the price, and if I can do a one-time annual payment rather than month to month. If it was on the order of $60-100/year sure, but over 150/year? Nope, not worth it.

      1. It might have been worth it if I used it more, but I think they wanted $10 or $15 per month and I really only used it a handful of times in the three years I had it.

  16. Amazon and EBay will be flooded with devices that claim to be able to defeat the software that has shut down features on your car. They’ll all eventually wind up rolling around in the center console next to the Fuel Shark when the driver realizes the devices have done jack shit.

  17. Amazon and EBay will be flooded with devices that claim to be able to defeat the software that has shut down features on your car. They’ll all eventually wind up rolling around in the center console next to the Fuel Shark when the driver realizes the devices have done jack shit.

  18. I had the Onstar for a year or so but realized I only drive that car to work and back in fairly populated areas so if I were to wind up in a ditch, fairly certain they’d find me soon, and my remote works pretty good so I can start my car in the parking lot from fairly far away with that instead of the phone.

    Also got Sirius a couple times when they get a deal but feel like I’m done with them as the whole having to call or chat to cancel and they don’t just offer the $5 a month deal on the website is so annoying in this modern age. I can cancel/renew Netflix/HBO/Disney/etc online without issue but for some reason Sirius thinks it’s predatory tactics are still cool.

    But yeah, not a fan of subscriptions, already paying to fuel the thing.

    1. sirius called me a few times every week for months after free 1-year subscription ended to have me tell them NO again and again.
      ya, fuck them with a pitchfork until they bleed from the ears (of course, i mean that in a very positive and constructive way).
      i suspect ending any other auto-subscription would follow the same model.
      no thank you.

  19. I had the Onstar for a year or so but realized I only drive that car to work and back in fairly populated areas so if I were to wind up in a ditch, fairly certain they’d find me soon, and my remote works pretty good so I can start my car in the parking lot from fairly far away with that instead of the phone.

    Also got Sirius a couple times when they get a deal but feel like I’m done with them as the whole having to call or chat to cancel and they don’t just offer the $5 a month deal on the website is so annoying in this modern age. I can cancel/renew Netflix/HBO/Disney/etc online without issue but for some reason Sirius thinks it’s predatory tactics are still cool.

    But yeah, not a fan of subscriptions, already paying to fuel the thing.

    1. sirius called me a few times every week for months after free 1-year subscription ended to have me tell them NO again and again.
      ya, fuck them with a pitchfork until they bleed from the ears (of course, i mean that in a very positive and constructive way).
      i suspect ending any other auto-subscription would follow the same model.
      no thank you.

  20. The only thing I’m paying a monthly payment for is my car when I buy it new and that’s only if I finance it. However once that’s paid off they don’t get a single cent from me. Either my car has everything “unlocked” or I go to another manufacturer who doesn’t deal in fuckery.

  21. The only thing I’m paying a monthly payment for is my car when I buy it new and that’s only if I finance it. However once that’s paid off they don’t get a single cent from me. Either my car has everything “unlocked” or I go to another manufacturer who doesn’t deal in fuckery.

  22. People may not love subscriptions for their car, but they’ll sign up and pay for them anyway. That’s just how people are, at least is Americans. We’re complacent about these things.

      1. Or at least the media in the pockets of big auto will report it as such.

        Oh well everybody else is doing it, nobody is fighting it so I might as well shut up and do it too…

    1. Not only complacent, but we’ll find ways to justify it pretty quickly. On the Equinox EV forums, when it came out that the Android Automotive functionality would require a connectivity subscription after a trial period, there were justifiable complaints, but the prevailing narrative quickly changed. Pretty soon, people were praising GM for offering 5 (I think) years of connectivity and talking about how it provides all (most of) the functionality of Android Auto without having to connect your phone.

      Because people want the car, they talk themselves into flaws being features.

  23. People may not love subscriptions for their car, but they’ll sign up and pay for them anyway. That’s just how people are, at least is Americans. We’re complacent about these things.

      1. Or at least the media in the pockets of big auto will report it as such.

        Oh well everybody else is doing it, nobody is fighting it so I might as well shut up and do it too…

    1. Not only complacent, but we’ll find ways to justify it pretty quickly. On the Equinox EV forums, when it came out that the Android Automotive functionality would require a connectivity subscription after a trial period, there were justifiable complaints, but the prevailing narrative quickly changed. Pretty soon, people were praising GM for offering 5 (I think) years of connectivity and talking about how it provides all (most of) the functionality of Android Auto without having to connect your phone.

      Because people want the car, they talk themselves into flaws being features.

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