Carmakers locking basic features behind paid subscription services

Oct 14

Jack Aylmer Reporter

By Jack Aylmer (Reporter), Alex Delia (Producer)

Car manufacturers are facing mounting criticism for locking hardware features behind paywalls, prompting some to reconsider the controversial practice. Brands like BMW and Tesla have received backlash from consumers over charging extra fees for features such as heated seats or extended battery range, despite these features being built into the vehicle.

Initially introduced as a way to generate recurring revenue, these hardware-based subscription models have proven unpopular. Automakers are now shifting focus toward software-based services, which consumers are more willing to pay for, such as enhanced navigation or unlimited electric vehicle charging.

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Mazda reignited debate with its remote start feature being locked behind a subscription package called ‘Connected Services,’ which costs $120 per year.

The automotive industry continues looking for new ways to replace revenue from traditional maintenance and repair services, especially with the rise of electric vehicles. As a result, experts predict a continued shift towards subscriptions that offer value without charging for hardware that is already in the car.

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CARMAKERS ACROSS THE GLOBE ARE FACING SIGNIFICANT BACKLASH FROM CUSTOMERS OVER A GROWING TREND OF LOCKING HARDWARE FEATURES BEHIND PAYWALLS. SOME COMPANIES ARE NOW REVERSING COURSE AS DRIVERS VOICE THEIR FRUSTRATION OVER PAYING FOR FEATURES THEIR CARS ALREADY HAVE.

IMAGINE BUYING A BRAND-NEW CAR, ONLY TO FIND OUT THAT CERTAIN FEATURES LIKE HEATED SEATS OR REMOTE START… FEATURES THAT ARE ALREADY BUILT INTO THE VEHICLE, ARE LOCKED BEHIND A PAYWALL. IT’S A MODEL THAT SEVERAL CAR COMPANIES, INCLUDING BMW, TESLA, AND MERCEDES-BENZ, INTRODUCED, HOPING TO TAP INTO NEW REVENUE STREAMS. BUT NOW, MANY OF THOSE CARMAKERS ARE FEELING THE HEAT FROM CUSTOMERS, AND THEY’RE STARTING TO RECONSIDER THEIR APPROACH.

CONSUMERS ARGUE THAT PAYING FOR A HARDWARE FEATURE THEY ALREADY OWN IS UNFAIR AND FEELS LIKE A HOSTAGE SCENARIO.

BMW TRIED LOCKING HEATED SEATS BEHIND A MONTHLY FEE IN SOME MARKETS, AND TESLA RESTRICTED ACCESS TO ADDITIONAL BATTERY CAPACITY. BUT AFTER CUSTOMER BACKLASH, THESE COMPANIES ARE NOW PULLING BACK ON THOSE PLANS.

AND IT’S NOT JUST PREMIUM BRANDS. MAZDA IS IN HOT WATER OVER A SIMILAR ISSUE. STARTING IN 2020, MAZDA INTRODUCED CONNECTED SERVICES, INCLUDING A REMOTE START FUNCTION AND REMOTE KEYLESS ENTRY… FEATURES THAT MANY CONSUMERS ASSOCIATE WITH BASIC MODERN CONVENIENCE. BUT THIS FEATURE IS NOW LOCKED BEHIND A PAID SUBSCRIPTION. THIS HAS REIGNITED CONTROVERSY, EVEN THOUGH THE SERVICE ISN’T NEW.

MAZDA’S CONNECTED SERVICES SUBSCRIPTION, COSTING 120 DOLLARS A YEAR… REFLECTS A LARGER TREND IN THE AUTO INDUSTRY. AS ELECTRIC VEHICLES BECOME MORE COMMON, AUTOMAKERS ARE SEEKING WAYS TO REPLACE REVENUE LOST FROM TRADITIONAL REPAIRS.

BUT EXPERTS SAY THERE’S A BETTER WAY TO DO IT… ENCOURAGING AUTOMAKERS TO EXPLORE SOFTWARE-BASED SUBSCRIPTIONS, LIKE ENHANCED NAVIGATION OR UNLIMITED EV CHARGING, THINGS THAT ACTUALLY ADD VALUE FOR THE DRIVER WITHOUT LOCKING UP HARDWARE THEY’VE ALREADY PAID FOR.

CARMAKERS ARE LIKELY TO CONTINUE EXPERIMENTING WITH DIFFERENT SUBSCRIPTION MODELS, BUT AS CONSUMER PUSHBACK GROWS, WE MIGHT SEE MORE BRANDS OPTING FOR SERVICES THAT DRIVERS ARE ACTUALLY WILLING TO PAY FOR… AND FEWER COMMON FEATURES HELD BEHIND A PAYWALL.

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FOR STRAIGHT ARROW NEWS… I’M JACK AYLMER.