Subscription services: A new way to sell cars that touches consumers’ wallets | So Good News

In an ongoing industry move, Mercedes launched a new $1,200 annual service plus tax to unlock functionality for several electric vehicles. The “Acceleration Increase” subscription does not include any upgraded parts, but instead allows access to existing vehicles.

The subscription is available for the Mercedes-EQ EQE and Mercedes-EQ EQS sedan and SUV models.

According to The Driveregistration increases torque, increases horsepower by 20-24%, and reduces the 0-60 mph time between 0.8 and 1 second depending on the model.

In contrast, Mercedes is intentionally driving a car only if the buyer pays them monthly. And this is a big concern with a new way of making money that the car industry is trying and starting to do.

Earlier this year, BMW tried a monthly subscription of $18 in several countries to get access to the hot seat. Although BMW also had an annual plan for $180, three years for $300, or unlimited for $415, the automaker also received a lot of money from the move – even prompting lawmakers in New Jersey to pass laws banning these subscription services.

The law would make it illegal for manufacturers to charge for registrations that “use equipment and devices that were already installed on the vehicle at the time of purchase or rental by the buyer and can operate after the suspension without incurring any costs to the seller, manufacturer. , or any other service provider. “

BMW has a history of pushing the subscription envelope, having abandoned the idea of ​​paying $80 a year to use Apple CarPlay or Android Auto in 2019. This did not stop the company, however, since it pushed forward the following year with. their “Operating System 7.” The system laid the groundwork that allowed the developer to access remote features such as heated seats, cruise control, and more and enable or disable them – which they could monetize after a subscription or one-time payment.

Mercedes last year unveiled a $576 annual subscription service in Germany to include rear-wheel drive, although every Mercedes-Benz EQS model is said to have the equipment already installed. This came in the same way on all similar cars in the US.

Toyota’s Remote Connect has apps for use from smartphones and other devices, but the $8-a-month service required using the remote start on a physical key — which uses radio waves like any other fob.

Tesla’s Full Self-Driving and Cadillac’s Super Cruise driver assistance systems are both paying customers, as well as Porsche with its Taycan electric model.

Like it or not, subscription services are already here for cars and will continue to grow unchecked. There is no “market that will fix itself” if all developers adopt this: the proliferation of video streaming services and microtransactions in the gaming market is proof of this. Subscriptions for services that require storage make sense, but should developers be able to charge for access to content already installed on a device?

These companies tend to show flexibility – “many users don’t need heated seats in the summer, so they can cancel subscriptions in those months” or “maybe sometimes they only need driver aids such as cruise control for long-distance driving, to pay as they go.”

This sounds obvious, but, again, these are things that are already on the car. Not only that, but many subscription models work well for users to forget to cancel. Regardless, would the manufacturer want money for a product that was already well placed after the owner paid for it? Can they really claim ownership at that time? This is a concept that is very similar to the “right to edit” argument.

Exiting the odd market created by the pandemic, the car industry has not recovered due to the continuation of the pandemic itself – such as the chip shortage – and other factors such as the Russian invasion of Ukraine. As important as it is, the decline in global sales and the increasing longevity of some vehicles are forcing the car industry to look for other ways to make money.

General Motors reported $2 billion in revenue last year from subscription services, so despite many critics of the idea, the practice is growing rapidly. This raises questions about how consumers will respond if regulations are not implemented.

One such thing – which is already happening – is prison breaking. Tesla has been issuing returns through Tesla’s used-car program, which causes some to hack or tear down their car in order to restart it. Jailbreaking, as PCMag explains, is “the removal of a service restriction.” This usually happens with mobile phones.

Although it is difficult to say whether this will be the norm when cars and devices are becoming “smart,” it is reminiscent of the “Piracy, it is a crime” against the violation of the PSA from the mid-2000s. The campaign was mocked and remembered a lot, especially the first line: “You can’t steal a car.” One such popular saying was “you can’t copy a car.” Jailbreak cars are now a thing, amazingly, you can.