The increased sophistication of software and connectivity in new cars means it’s possible for automakers to lock and unlock some features using over-the-air updates, thus enabling them to offer the features via subscription.
A prime example are driver-assist features. We’ve already seen Cadillac introduce a monthly subscription for Super Cruise, which is required after a free trial period ends. In some markets, automakers have even started offering features like heated seats or automatic headlights on a subscription basis.
Not everyone is keen on such business practices being introduced. Two members of the New Jersey General Assembly, Paul Moriarty and Joe Danielsen, in September introduced a bill (No. 4519) that aims to make it illegal for automakers and dealers to sell subscriptions for features that use hardware already installed in the vehicle at the time of purchase.
However, the bill leaves a caveat for features that require ongoing expenses to the automaker, dealer, or any third-party service provider. This means features that are constantly improved, like Cadillac’s Super Cruise—which can be upgraded with new functionalities and greater map coverage—could remain as a subscription. The same would also be true for features that deliver content, like streaming.
The bill is also specifically for subscriptions, so even if it passed an automaker would still be able to charge a one-off fee for features that could be unlocked on demand. This could actually be advantageous to a buyer as they could decide later whether they really want a feature instead of paying extra for it at the time of purchase.
Hyundai only last week announced its next-generation vehicles will offer so-called Feature-on-Demand products. Hyundai said owners will be able to upgrade the performance and functionality of their vehicles over the air, though the automaker didn’t say whether these would come with a one-off fee or a subscription.
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