A recent study by S&P Global Mobility revealed that consumers are willing to pay for connected car services, but only those that offer clear value or are available with a free trial. However, they are less interested in features that they will not use or are already available on their smartphones.
Automakers such as BMW and Mercedes-Benz have faced backlash by introducing subscription-based products and services in their vehicles. But according to a S&P Global Mobility survey, consumers generally accept a subscription when they are offered exposure to new features and technology. When offered a free trial or existing subscription on a new vehicle, 82 percent of survey respondents said they would consider purchasing a subscription-based service for future new vehicle purchases.
The survey also highlighted the importance of offering value-added services through subscriptions. Paid functional updates, particularly improved navigation and advanced driver assistance system (ADA) functionality, were highly desirable. Safety features such as high-beam assist and driving video recorder received the highest satisfaction ratings among connected services. However, features such as heated seats or remote start have fallen out of favor as consumers are used to paying for these items as part of a select package.
GM’s decision to ditch Apple CarPlay and Android Auto in favor of their native infotainment system was intended to capitalize on this trend by increasing subscription retention and providing access to more consumer usage data. The S&P Global Mobility Survey highlighted that while consumers have concerns about data privacy, 74 percent of respondents said they are willing to share data for free services and consider automakers more trustworthy than tech companies like Google or Meta.
What the survey failed to prove is whether most consumers are willing to pay a monthly subscription for additional performance. Mercedes-Benz offers Enhanced Acceleration, a performance subscription that in its electric vehicles increases a car’s output by 20 to 24 percent. However, BMW has no intention of offering over-the-air performance upgrades for its future electric vehicles. Not because I see any problem in doing so but because I believe the revenue generated by subscription fees will not be profitable enough to cover the technical requirements and regulations.
