The auto industry views subscription fees as a multi-billion dollar revenue stream

Los Angeles — Jason Luu’s 2020 Volvo XC90 has state-of-the-art remote control features, such as the ability to start and stop the engine and unlock and lock the car from an app on his smartphone.

But if he wants to continue using these features after a free trial, that is will cost 200 dollars a year.

“It’s kind of disheartening,” Luu told CBS News.

Subscriptions are shifting into overdrive in the automotive industry. For certain Toyota vehicles comes the option of remote start for a price at $8 per month after a free trial expires, while BMW charges $20 per month for enhanced cruise control on certain vehicles.

While Ford offers its hands-free driving “BlueCruise” assisted cruise control for some of its vehicles, including the all-electric F-150 Lightning, are drivers willing to pay $75 a month for it?

Alistair Weaver, editor-in-chief at Edmunds, says automakers are counting on the new revenue stream to pay for the expensive transition to electric cars.

“So if your car payment is $600 a month, it’s now $675,” Weaver said.

General Motors projects subscription fees to bring in as much as $25 billion a year by 2030. For context, Netflix’s total revenue for fiscal year 2023 was $32.74 billion.

“Part of me says, ‘Well, you already bought the hardware… so just let me use it,'” Weaver said.

Alix Partners, a global consulting firm, found that more than 60% of consumers are willing to consider subscribing to enhanced security and convenience features as long as they don’t feel like they’re being charged for something they’ve already paid for .

“A lot of people in the auto industry certainly use Apple as a shining light on the hill,” said Mark Wakefield, Alix Partners CEO.

“The car has to be cheaper, plus this option to subscribe,” Wakefield added.

Weaver suggests another idea for car owners.

“Subscribe to the system, $75,” Weaver said. “Take your road trip, unsubscribe, and then you’ll no longer pay for something you won’t really use.”

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