BMW recently began charging a monthly fee to access heated vehicle seats. The program is only available in select locations, but it marks one of the first notable uses of monthly subscriptions to unlock a feature that’s already present in your car. Subscriptions are nothing new to consumers (millions of people pay a monthly fee for services like Netflix and Xbox Game Pass), but paying monthly to access functionality in a vehicle you own is fairly new—and it sounds like it might be here to stay. “With the advent of quick over-the-air updates and increased connectivity in new vehicles, offering paid subscriptions for ‘features on demand’ is a relatively easy way for an automaker to generate revenue after the vehicle purchase,” Robby DeGraff, industry analyst at AutoPacific, told Lifewire in an email.
The History of Monthly Subscriptions in the Auto Industry
The auto industry is no stranger to monthly fees, but it’s never been done quite like this before. Subaru’s STARLINK, for example, has been around for years and requires regular payments to access features such as remote start or curfew alert. BMW has also dabbled with the monetization scheme, although DeGraff notes it has never been used for things as “basic as heated front seats.” Factory-installed features have typically been out-of-bounds when it comes to monthly subscriptions. Ongoing services and software, however, are often locked behind a paywall. Just as you pay monthly for access to Netflix’s growing catalog, STARLINK is a service that you need to pay to access. But with the ubiquity of the internet and the ease of getting gadgets online, car manufacturers are beginning to realize they can function as both an automotive and technology business. “The perk of today’s vehicles being so connected, from the drivetrains themselves to infotainment systems, is that automakers now have the ability to provide consumers with certain features that their vehicle may not have been equipped with at [the] time of purchase or even ‘upgrades’ to existing ones,” DeGraff said.
Prepare for More Microtransactions
Only a few brands are exploring the options of an always-online ecosystem in 2022, but analysts believe we’ll see plenty more monthly subscriptions in the coming years. Matthias Schmidt, European automotive market analyst at Schmidt Automotive Research, told Lifewire via Twitter that they believe “this will be the future” of the industry. Schmidt isn’t alone either, as DeGraff shares the sentiment. However, he cautions that manufacturers must find the right way to implement the strategy. “Manufacturers need to identify the right features worth offering via an added monthly cost and then make the subscriptions as flexible as possible to the consumer and realistically priced. I don’t think our market will ever warm up to the idea of paying extra for heated seats or wireless phone charging because those are features now so common in all segments. I do, however, think there’s room for this practice when it comes to certain [Advanced Driver Assistance Systems] features or to even unlock more performance.” DeGraff says that owners could use the technology to rent specific features, such as paying for one month of hands-free driving during a roadtrip. Manufacturers could also charge for premium, over-the-air updates that unlock additional torque for sports cars or increase the range of an EV. Most people still haven’t warmed up to the idea of paying monthly for features already built into their vehicle, but a recent study found that newer technology (such as in-vehicle Wi-Fi and vehicle tracking) are prime candidates for the monthly model. In other words, companies will probably associate these monthly fees with access to premium software or new features not already offered in today’s fleet. DeGraff sees plenty of room for innovation with subscription fees and is curious to see where it ends up in the years ahead. “I like the idea of it but with reservations. The opportunities are endless and exciting to think about.”
