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.
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
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.”
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
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
While 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.
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?
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
The 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.
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.
The Big Question
Is there anything you’d pay money for on a monthly basis for your car?
Many years (ok, decades) ago I was walking around the local Chevy dealer with a friend, and we saw a new Corvette with a $35K window sticker. Friend asked is it worth it? I said if it has a button you push that it will **** your **** I’m in. Would pay monthly for that.
Many years (ok, decades) ago I was purchasing a car 4 doors little Chevy. Guess what after dealer arguments I am paid for a car 4 doors but was 2 doors . My wife was crying and it was finito. Too much stress for Her. She got a car but dealer’s tactic stays with me for to day.
I’m paying for my smart device to do a lot of these things monthly. I don’t really want to pay a monthly fee for redundant services. I shouldn’t have to shell out cash on an ongoing basis to have the screen in my car reflect what’s on my phone. That’s basically a software thing and I know software folks REALLY like ongoing license fees over single time purchases.
Hardware wise, if the car has seat heaters or similar non-standard niceties, I paid for it, I should not have to keep paying for access to it.
My mom purchased a Lexus that the remote start is a subscription & it drives my dad nuts to have to pay that every single year. I wouldn’t do it
Michigan complaining about a battery plant near a river, but having an oil refinery in the middle of town across the road from residential….?
My hometown has an oil refinery across the street from every elementary, middle, and high school. I’m eternally disappointed that I didn’t develop any super powers growing up in that.
Demographics
“Is there anything you’d pay money for on a monthly basis for your car?”
If it was a BEV, I’d pay a monthly amount for unlimited access to a charging network if I travelled by car a lot.
Aside from that, a monthly loan payment maybe?
Subscriptions are for non-critical services. Onstar, XM/Sirius, Spotify, Internet/Wifi etc. Those have humans on the other end providing the capability or content. The car functions normally without any of those. Also most of them are 3rd parties from which the car manufacturer has no connection.
Core functions and safety features should not be locked behind subscriptions or fees.
Cruise control, heated seats and such should work on day of purchase and in perpetuity.
Which by the way BMW, why the heated seats? Why not the A/C? Or the turn signal? Wait, BMW drivers don’t use their turn signal….that won’t work.
No. Suck my balls, folks. I want to pay for features once. When I buy something, I want it to be completely, unequivocally mine.
The lone tempting thing might be a data plan if I wanted to keep my nav up to date in real time and/or access a built-in wifi hotspot that isn’t just my stupid phone, but in terms of vehicle-based features like heated seats, CarPlay or apps that came with the car: nope, suck my balls, absolutely not. Suck my balls! That’s my instant reaction and really the only one that this idea deserves. The idea of another monthly subscription for features that should be paid for only ONCE is a naked cash-grab that actively makes consumers’ lives worse, and we don’t want it.
Consumers are facing enough subscription fatigue as it is. I’m tired of a zillion subscriptions for things and cars should not, under any circumstances, go down that insufferable path with items baked into the car. Suck my baaaaaaaaaaalllssssss!!!
Stef Schrader for President: Suck my balls!
That’s a ticket I can get behind!
BIG OL’ BALLS
Chopper! Sick Balls!
“No. Suck my balls, folks.”
https://www.youtube.com/watch?v=C46fNXNMhOc
My instant reaction is hell no, but really the answer for me (and probably most people) is it depends on the cost of the subscription vs the inconvenience of doing it yourself.
I’d pay a small amount for an advanced OBDII service that would decode, monitor the engine, and help diagnose.
Music streaming 2010 vs now
Cable TV vs Netflix (circa 2015) vs 20 streaming subscriptions now
Instead of finding stuff to add to the experience and charge for, why not charge a little to avoid certain things? For instance, during COVID, my dealer had to get creative with the service experience with the need to avoid their stupid waiting room or crowding people onto shuttles. They switched to home pick-up and drop off, which they continue to this day. They do not charge a fee for that (or it’s hidden, but not bad). I’m prepared to pay a small fee to never have to set foot in their facilities and wait around indefinitely again. Now I have time to do things more enjoyable things like get a colonoscopy.
I’m willing to make a monthly payment on a loan / lease, also agree with paying for things that require constant maintenance or need connectivity to function, however I’m of the opinion that anything you “subscribe” to such as heated seats has a built in lifetime warrantee, if the seat quits working even if the car is out of warranty it’s on the manufacturer to fix it or replace it for free as long as I’ve maintained my subscription or am eligible to sign up for one.
The big question: NOPE.
Navigation shouldn’t cost a subscription, however if you pushed map updates yearly, I would be fine to pay for an update to the maps. Heated seats nope, speed boost over the air, nope. Maybe an online mechanic service that would help troubleshoot an issue over the air would be worth a subscription.
I’d best describe the line as “I’m willing to be offered subscription services for things that actually have an ongoing cost associated with them”.
To explain: I’m ok with carmakers charging to let you unlock/lock remotely (i.e. outside of fob range) or track its location on an app. That requires a mobile connection for which a mobile provider is going to charge the carmaker money on the back end. This is a useful feature, but one I could live without if I didn’t want to pay it. And it’s minor enough that I wouldn’t want to be forced to pay it by having the car be more expensive up front.
This rule is violated by things like heated seat subscriptions. There is no ongoing cost to the manufacturer to have the seats get hot. In fact, they must already have the ability mechanically in there to even sell you the subscription, so you pay for it up front either way. This is just pure greed and frankly is a risk to the manufacturer in the form of regulatory action. There is a certain amount of screwing over customers that is tolerated by and large, but once you cross a line you may lose even the things that were previously allowed.
Yes, things that require infrastructure external to the vehicle to function are fine as subscriptions, someone has to pay for the ongoing operation and maintenance of that, if there’s some sort of proprietary communications satellite or call center or something involved, etc
But anything completely internal to the vehicle was paid for in full as part of the original purchase price, which includes whatever software is stored in the onboard computers
Cars themselves are just the base unit of cost. We want as much as possible not on a subscription. We already have to subscribe to… Maintenance (Tires, oil, brakes), Fuel, Insurance and for most -car payments. Sinking another penny into something you already pay for on many levels on a monthly basis is revolting.
No. Especially anything that my phone can already do.
I pay for satellite radio. If I want it for a long trip, I may pay for better ADAS if it’s offered as a one time rental. Otherwise forget about it.
No. I mean, there is nothing I would pay a car company for on a monthly basis.
I might pay someone a one-time fee to hack into my car and give me seat heaters that are already installed. (If it were possible, and I’d probably get it all possible features unlocked.)
When I win the lottery, I’d pay Jay Leno to lend me one of his cars for a month, every month. So, that would be a subscription service of a sort. We’d have to work out the price and insurance.
Not sure why simply adding to the sales price is not an option. So, people, do the math: $10/month at 5% over 10 years is worth almost $950 today.
And, assuming the car company knows that only about 40% will purchase the subscription, some percentage of the increased cost of your unconnected heated seats is baked in to your purchase price. I mean, someone has to pay for them.
Monthly subscriptions only make sense to me when it’s a feature that benefits from regular updates and/or requires ongoing support from that manufacturer. Level 2 (or higher) Automation, advanced navigation, concierge services, safety monitoring, satellite radio, etc. make sense. Anything that requires an ongoing subscription to unlock capabilities already present in the vehicle are a ripoff and should be illegal. Ongoing fees for software features that don’t require ongoing support are also dumb and should be illegal.
Personally, I’d consider OnStar or equivalent. Maybe. The few months of my OnStar trial in my last GM product were kind of nice, being able “check up on” my car, remote start it from a distance, and do all that fun stuff. But I ultimately let it lapse. Satellite radio isn’t much better than regular radio anymore and I’ve got more than enough media downloaded on my phone for longer trips. I can’t really justify anything beyond regular ADAS.
I truly despise the idea of a monthly subscription for features that are already built into the car. There aren’t many exceptions. I’ve had 2 VW Tiguans and both had the “app” that would allow you to lock/unlock and roll windows down, and maybe remote start (I never subscribed because it wasn’t worth $200 a year or whatever). I MIGHT consider that if I intended to hold onto the car for a while. But for anything else, like heated seats, navigation, CarPlay, etc, I’d sooner rip out the OEM head unit or “jailbreak” the car than pay the manufacturer for that stuff.
The only thing I pay on a monthly subscription basis for my car and it doesn’t even go to the OEMs, is the carwash pass. I like my car clean and its not even far from my house, on my way to run errands all the time. Its handy on winter time to remove the salt too.
The reader comments are consistent with the sentiment of the majority of customers. Over 20 years ago in my OEM days, we would hire companies like S&P to do research and run focus groups and clinics. The demographics included a wide range of income, existing and competitive vehicle customers, large sample sizes, etc. When asking if a person would be willing to pay a monthly subscription for satellite radio or OnStar-like services, the overwhelming response was “No. The last thing I want is one more monthly payment.”
Granted, this was back before the OEMs were entertaining things like subscriptions for heated seats and other basic vehicle functions, but it shows that we haven’t changed that much in our attitudes of what we value.
Cars come with too much crap I don’t want already and i hate subscriptions, so there’s no way I’d pay more for anything even if it was only out of principal.
I live in the Toronto area where temps range from maybe -20F to + 80F over a year. Heated seats may be nice in January, but I’m damned if I will write a monthly cheque for them in the middle of an August heat wave.
Especially since the heating elements, and the button to turn them on and off, are always physically present in the car regardless of whatever subscription may or may not be in place
Subscription services for cars seem like they will impact the depreciation, and second hand value of the car. IF a new customer is willing to pay $5 a month for heated seats, then for their purposes it has it. But when they go to sell it, it no longer has heated seats. For me that would be a non-starter buying used, and I would find something that has the option included, as to not add extra monthly costs. Original owners will start to find that the cars are worth less than they expected, because the people who buy used (me almost exclusively) won’t be willing to take an additional subscription.