Have you ever heard the old phrase, “the finer things in life are free”? Well, automakers have a rebuttal, “Okay… but what if they actually cost a little extra?”
What happened: Mercedes is now charging a US$1,200 annual subscription fee for drivers of its EQ models to gain access to faster acceleration and better performance capabilities, a feature that the vehicle already comes fully equipped with. This is a growing trend.
- For the low, low price of rent in London, Ontario, drivers can boost motor output by ~24%, increase torque, and shave 0.9 seconds off their 0 to 60km acceleration.
Why it matters: Subscriptions are poised to be the future of auto sales, with experts expecting them to start trickling down into more budget-friendly vehicles. So next time you’re in the market for a new car, brace yourself for extra costs for seemingly standard features.
- Earlier this year, GM said it soon expects the average driver of one of its vehicles will pay US$135 per month in additional subscription fees.
Why it’s happening: As automakers struggle to get new cars on the road due to supply shortages, they’re trying to squeeze every last dollar out of ones they’ve already sold.
- Now that cars are just smartphones with wheels attached, automakers can make changes through over-the-air updates, giving them newfound control after the sale.
- From BMW charging for heated seats to Toyota charging for remote control keys, automakers believe subscriptions are key to adding billions of dollars in new revenue.
Yes, but: This could backfire if consumers refuse to shell out. A recent US survey of people in the market for a new car found that 75% wouldn’t pay extra for subscription fees.