Subscriptions are a relatively new revenue stream for automakers, allowing companies to make some extra money even after a customer buys the car. It has its roots in the luxury segment, but many mainstream brands have implemented similar strategies by setting up online stores. Much like you’re buying downloadable content for a video game, you can add features to your vehicle.
Mercedes is a prime example of how a car company can become more profitable by charging customers for certain features during ownership. The firm’s Chief Software Officer Magnus Ostberg was asked by Top Gear magazine what he thinks of BMW’s decision to charge extra for heated seats.
The Stuttgart-based marque has a different approach by offering a “luxury and holistic experience” without “nickeling and diming our customers.” He went on to admit that Mercedes offers subscription packages but their clients “don’t want to be nickel and dimed in their face.”
In 2022, BMW made the headlines for all the wrong reasons. It started offering a subscription plan for heated seats. Obviously, the car already had the necessary hardware from the factory, but it was blocked behind a paywall. Those who purchased a vehicle without ticking the heated seats box could unlock the functionality after taking delivery. Following backlash and low acceptance rate, the controversial subscription was dropped. However, the Munich marque still offers plenty of other pay-to-use features.
Mercedes also sparked controversy back in 2021 when it launched a subscription plan for the more advanced rear-wheel-steering system of the EQS. As standard, the luxury sedan has a 4.5-degree steering angle at the rear in some markets, but owners can pay extra for the full 10-degree steering. It’s worth noting the more sophisticated system is standard on the EQS sold in the United States. Lest we forget the subscription to access more power from select EQ models.
As to what other features you can get post-purchase, both Mercedes and BMW have plenty of goodies. The three-pointed star has an Excellence Package with 22 “digital extras” such as auxiliary heating/ventilation, remote door locking/unlocking, and remote window/sunroof control. You can also pay extra for digital radio, headlights with an adaptive high beam, adaptive cruise control, and others. The full list is accessible here, but availability depends on the country, model, and whether the car already has certain hardware installed.
What about BMW? We checked the UK shop where we found numerous items. The Bavarian marque offers adaptive cruise control and high-beam assistant as well, plus Apple CarPlay integration and adaptive M suspension. There are also subscriptions to map updates and fake engine sounds, along with packages that bundle certain driver assist and safety systems. We should mention that some items are available with monthly or yearly plans while others are a one-time fee to unlock the feature permanently.
Automakers believe subscriptions will blossom into huge money-making tools. Stellantis estimates it’s going to earn an additional €4 billion each year by 2026 with its “monetizable connected cars,” rising to €20 billion annually by the end of the decade.
Paying to access a feature that requires hardware already inside the car is a tough pill to swallow. Nevertheless, it seems automakers are confident people are going to pony up the money each and every month or year to use a functionality deliberately blocked by the car manufacturer. A survey conducted by S&P Global Mobility last year revealed 82 percent of the respondents were willing to get a subscription.
