Automakers Charging Subscriptions for Car Features: A Growing Trend
In an evolving landscape where monthly subscriptions govern an increasing array of services from entertainment to meal kits, the automotive sector is now embracing this model, particularly for enhanced vehicle functionalities. A notable instance comes from Volkswagen UK, which has introduced a subscription-based approach to unlock additional horsepower in its ID.3 electric vehicle. This development signals a significant shift in how car manufacturers are monetizing features that were once standard inclusions or one-time purchases. As consumers become accustomed to recurrent payments for digital amenities, carmakers are exploring similar revenue streams, raising discussions about the long-term implications for vehicle ownership and access to inherent capabilities.
The integration of subscription models into the automotive industry is becoming more prevalent, with car manufacturers identifying new avenues for revenue generation beyond the initial sale. Volkswagen UK's decision to offer a horsepower boost for its entry-level ID.3 'Pure' model via a paid subscription is a prime example. While the base model is advertised with 170PS (approximately 168 horsepower), a discreet note in the online configurator reveals that this power output is contingent on activating an optional upgrade. This upgrade provides an increase from 150kW to 170kW and can be accessed through various subscription durations—monthly, yearly, or as a perpetual one-time purchase.
Reports from British motoring publications, such as Auto Express, shed light on the pricing structure for Volkswagen's power subscription. The monthly fee is approximately £16.50 (around $22.30), which is considerably higher than many popular digital streaming services. For those preferring a permanent enhancement, a one-time payment of £649 (approximately $877.98) is available, granting the additional horsepower for the vehicle's lifetime. A key aspect of this offering is that the upgrade is tied to the car itself, meaning the enhanced performance remains with the vehicle even if it changes ownership in the used market. This approach contrasts with some previous subscription models that were linked to the individual owner.
Volkswagen is not alone in exploring this subscription-based strategy. Other prominent automakers, like Mercedes, have also implemented similar models for performance enhancements. Mercedes, for instance, offers an 'Acceleration Increase' feature as part of its 'Digital Extras' package for certain EQE models. This upgrade significantly boosts horsepower and improves 0-60 mph acceleration times. The pricing for these enhancements can vary, with options for monthly, annual, or one-time payments, reflecting a growing trend of segmenting and monetizing vehicle capabilities. The industry's move towards software-defined vehicles facilitates such practices, as features can be enabled or disabled remotely based on subscription status.
This emerging trend of subscription-based features in the automotive sector raises important considerations for consumers and the future of vehicle ownership. As more functionalities become subject to ongoing payments, the overall cost of owning and operating a car could increase. The idea of paying extra for features that are already physically present in the vehicle, but electronically restricted, might challenge traditional perceptions of value and ownership rights. The long-term impact on the used car market, particularly for electric vehicles with activated or transferable digital upgrades, remains an intriguing area for observation, as these practices could reshape how vehicles are valued and transacted in the future.