Car companies are looking to cash in by charging you subscriptions for
special features that, for the time being,
are already included in the purchase price of your car.
But why charge consumers one time when automakers could be charging
you monthly for the perk of using your seat warmers?
They're calling it features on demand, and
it's going to make owning a car even more expensive than it already is.
>> As automakers can add technology on the fly through things they call features
on demand or car subscription services.
We're seeing more and more of these software and
even hardware type upgrades coming to cars with a subscription type model.
BMW famously, about a year ago, tried to have people pay for heated seats.
This functionality was already in the car, but they, in order to turn it on,
if you didn't buy it from the factory, they wanted you to pay subscription.
So, they did that abroad.
People heard about it here.
Very upsetting about that.
Mercedes just added the ability to add acceleration boosts to its EVs via
subscription.
And then Toyota did the same thing with their connected features on their phone.
You want to unlock the car or do things like that,
you have to pay an extra fee by month to do these connected features on your phone.
>> Let's unpack the point made about BMW charging people for
the heated seats to really internalize how insane this is,
the seat warmers are already built into the car.
The only thing BMW would get paid to do is turn the warmers on remotely.
And that potentially translates to big profits with very little effort or
cost for BMW.
Here's another example by Mercedes, which announced that it
would allow owners of the EQ series EVs to unlock more power through
a subscription feature activated through the Mercedes app.
The costs are pretty significant.
For instance, for the EQE 350 formatic EV,
great name, Mercedes notes prices of $60 per month,
$600 a year, or just a lifetime cost.
You could do a one time lifetime cost of nearly $2,000
to unlock an additional 60 horsepower.
Kind of creepy that the horsepower of your vehicle can
be manipulated remotely by the car company, right?
If you hate this, don't worry, because you've got company.
A new study from Cox Automotive this week found that 69% of respondents
said that if certain features were available only via subscription for
a particular brand, they would likely shop elsewhere.
But if all car companies start rolling out features on demand and
many already are, consumers won't really have many options.
Yahoo Finance reports that despite the rage that automakers are already
noticing among car buyers, they're pushing ahead because they're
counting on billions of dollars in revenue from subscription services.
The editor in chief of the automotive research firm Edmunds told Yahoo finance,
quote, I think the general view is that this isn't going anywhere
because most automakers have seen this as a significant revenue source.
And that's not just luxury brands.
GM has been very open about it.
Ford is working on it.
So, this is the new frontier of how to generate revenue and, honestly,
how to make Americans and car buyers even more miserable than they already are.
And by the way, he's right.
Automakers have already included subscription fees in their
financial models to predict their revenue and profits.
Wall street analysts and investors are counting on these additional dollars,
beefing up the bottom line in future quarters and thus boosting share prices.
And look, as we all know, shareholder profits reigns supreme, folks.
We, the consumers, will just have to shell out cash for
things that were once included in the purchase price of our cars so
that the precious investors get a nice return on the brave act of parking
their money in car companies in the quest for passive income.
That's how this all works.
Just when you think life couldn't get more complicated and
more costly, companies find a way to do it.
They're always going to find ways to do it.
They've got to maximize profits on behalf of their shareholders.
And that's exactly what's happening with these subscription services for vehicles.
It's insane.