Home » Why Automakers’ Plans To Squeeze Subscription Dollars Out Of You Forever Might Not Work

Why Automakers’ Plans To Squeeze Subscription Dollars Out Of You Forever Might Not Work

Tmd Ts 062024
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The average age of a car on the road continues to stretch toward infinity, meaning that automakers are waiting longer to sell someone a new car. As car companies are in the money-making business, it would be much better for them if you had to keep paying them. But would it be much better for you?

A new survey shows that, in fact, most people don’t love this idea, even if they’re generally satisfied with the services they have now.

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Do you know who is selling more electric cars? Pretty much everyone who isn’t Tesla, thanks to a lot of incentives. At least in the United States. In Europe, EV sales are slumping, especially in Germany.

And, finally, it sounds like Ford’s smaller EV plant in Michigan will continue to go forward over the complaints of some locals.

Most People Would Rather Not Pay A Subscription For Their Car

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Subscription services for cars have existed for a while and not all are completely terrible. Safety subscriptions like GM’s OnStar do offer an enhanced experience for a little extra money. The same is true of things like satellite radio. Even some advanced safety features, like Tesla’s FSD, theoretically offer customers a little more for extra money.

There is a line, however, and BMW crossed it when it tried to charge people a monthly subscription for heated seats. There’s just something especially galling about having to pay for a capability your car has built into it.

S&P Global Mobility surveyed about 8,000 adults globally to discover how they felt about these services. You can read the summary here, but the general vibe is that people are generally ok with their current services in their current cars and … that might be it.

S&P Global Mobility’s survey indicated declining satisfaction levels across all connected services categories compared with the previous year. The highest satisfaction was reported for navigation, personalization and infotainment, while the lowest was for safety and security. Paid functional updates showed high satisfaction in safety, comfort, infotainment, navigation and advanced driver-assistance systems (ADAS). Willingness to pay was highest for safety and electric vehicle services and lowest for navigation and infotainment.

Consumers expressed a strong desire for navigation and safety and security services in their next vehicle, while productivity services were the least desired. The desirability of EV services and personalization are on the rise. For paid functional updates, enhanced navigation, smartphone integration and basic ADAS functionality were highly desirable. About 39% of respondents preferred an annual subscription for these updates.

That last little bit there is a little hard to parse, but if 39% of people prefer an annual subscription for services then it’s not unreasonable to assume that 61% do not. Even that sounds high to me. Elsewhere in the survey, S&P notes that there was a “slight decline in the likelihood of recommending connected services brands.”

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My sense of this is that people still expect that what you get with your car is what you get, and charging extra for a capability that seems like a basic function isn’t going to fly. This whole concept is something beancounters love, but regular people do not.

Modification and upgrades are another matter. No one would expect to go to a dealership and get nice wheels, a power bump, or other capabilities for free. If automakers can offer more paid upgrades or customizations that’s maybe something.

But charging more for, like, navigation? I’m not convinced. Or, as S&P puts it:

“The holy grail of paid updates and subscription services could be another empty vessel from which the industry drinks.”

Harsh, but probably true.

It Might Be A Good Quarter For EVs… For Everyone Who Isn’t Tesla

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Most companies these days only give out quarterly sales data, so we’re always at a bit of delay in seeing a full picture of the market in between quarters. Thankfully, S&P Global also tracks monthly registrations and it looks like EV sales rose 14% following a kinda meh first quarter.

Part of this is that people want EVs, and another big part of it is that automakers are tossing $10,000+ on the hood of certain models, even those with price cuts over the last year. From Automotive News:

Overall, new EV registrations totaled 102,317 in April, the most recent month for which data is available. EVs grabbed a 7.4 percent share of total light-vehicle registrations, regardless of fuel type, which reached nearly 1.4 million, S&P Global Mobility said. The double-digit increase for EVs outpaced the 7.3 percent gain in the overall light-vehicle market.

The EV data is only for the registration of new battery-electric vehicles and does not include hybrids.

The two most popular EVs in April were still the Tesla Model Y and Model 3, but they saw a 4.7% and 55.1% decline in year-over-year registrations, respectively. At the same time, the Mach-E and bZ4X saw increases of 287% and 647%, respectively. Even the Rivian R1S was doing better, up 129% year-over-year.

I’m curious to see if Toyota can continue to sell the Bees Forks to people who kinda want an EV but definitely want a Toyota.

Germany Is A Drag On European EV Sales

P90550216 Highres The Bmw Xm Allure CaWhile it’s not proportionally the most electrified country in Europe (that would be Norway), by volume Germany is still the biggest EV market on the continent.

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Recent cuts to subsidies for electric cars have done exactly what you might imagine, and EV sales in Germany dropped by 30% in May, dragging down the overall EU number of BEV sales by 12% year-over-year. Belgium is up 45% though!

Should we panic?

Per Reuters:

The current stagnation of the EV market has been expected for years but sales should pick up from 2025 when the next EU car emission targets kick in, European campaign group Transport & Environment (T&E) said in a briefing on Thursday.

Overall, hybrids/PHEVs/BEVs accounted for almost half of all new registrations in the EU in May, so people are still buying “electrified” cars if not full EVs.

Ford Can Continue Battery Plant In Michigan

Blue Oval Battery BlueovalThe politics of Michigan continue to be fascinating to me, partially because what happens to Michigan in November will likely have a huge impact on the country.

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All politics is local, however, and Ford’s plan to build a (now smaller) battery plant in Marshall, Michigan can continue according to the Michigan Court of Appeals. What happened?

While the local government approved a battery plant (the BlueOval Battery Pack) a group of citizens attempted to kill the new construction, citing its closeness to a river and the way the City of Marshall’s process is structured. That same group tried to put a referendum on the ballot, but it was dismissed by a lower court due the group not having standing.

That same group of citizens appealed the decisions but lost on appeal according to The Detroit News. This is a win for Ford, sure, but even the locals said this wasn’t an anti-Ford thing. Mostly this is a win for the state’s economic planners, which are trying to build out as much EV factory capacity as it can in the run-up to what’s expected to be an expansion of battery demand.

What I’m Listening To While Writing TMD

If pissing your pants is cool, consider me Miles Davis.

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The Big Question

Is there anything you’d pay money for on a monthly basis for your car?

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Gerontius Garland
Gerontius Garland
1 month ago

“Safety subscriptions like GM’s OnStar do offer an enhanced experience for a little extra money.”

OnStar is literally spyware. I wouldn’t even consider owning a car with that capability, unless I personally removed every piece of hardware that made that system work.

Paint-Drinking Thundercock Harvey Park
Paint-Drinking Thundercock Harvey Park
1 month ago

> If pissing your pants is cool, consider me Miles Davis.

Excuse me, what?

> Is there anything you’d pay money for on a monthly basis for your car?

No.

Drew
Drew
1 month ago

> If pissing your pants is cool, consider me Miles Davis.

Excuse me, what?

It’s from the movie Billy Madison.

MrLM002
MrLM002
1 month ago

Starlink, but that’s about it

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