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BMW sparked controversy in 2022 when it floated the idea of a new “Features on Demand” program that would charge owners a fee for access to pre-installed hardware. In particular, the idea that owners would have to pay a monthly fee to access heated perches only a few eyebrows left.
The German brand was quick to clarify at the time that if a customer requested heated seats, they would “remain fully functional for the life of the vehicle.” However, the company said additional features, such as using existing camera hardware as a dash cam, will continue to be offered as a premium software subscription.
The latest said Alexandra Landers, director of product communications at BMW. drive.com.au that the introduction of the “on-demand” service with a subscription model for heated seats and steering wheels “is probably not the best way to start.”
However, Landers also defended the model, saying, “You use the cloud, and that has a cost,” adding, “If you use it, we have to pay for it.” He also confirmed that the company is still exploring the idea of customers wanting to unlock additional features for a fee in the future.
The upcoming iX3, for example, will be available with a 360-degree camera subscription, as well as the Tesla FSD-rival Driving Assistant Pro package, which offers advanced cruise control with automatic lane change and more.
“Through these established digital offers, we offer our customers even more convenience and flexibility in accordance with their individual wishes after purchasing a vehicle,” said a BMW spokesperson. the reader when asked to clarify his position on the issue.
But it’s not just BMW that is criticized for offering additional features as a subscription service.
Tesla recently eliminated the ability to pay a one-time fee for its fully autonomous self-driving system, while General Motors has charged fees for its OnStar emergency services for decades.
Additionally, any “always connected” car will eventually require payment for a data plan; Otherwise, owners will need to be within Wi-Fi range to perform even the simplest software updates.
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While many consumers are willing to pay a subscription for digital services that are increasingly common in today’s software-defined vehicles, the real outrage came when BMW suggested that owners would have to pay for hardware already installed in a vehicle.
The German brand has reversed that decision, but continues to charge recurring fees if the owner wants to operate its heated seats and steering wheel remotely. The company maintains that there are costs associated with mobile data and cloud storage that must be covered, but some buyers are not convinced.
However, as vehicles (especially electric ones) become increasingly digitalized, automakers are looking for ways to tap into the potential revenue streams associated with subscription plans.
After all, charging an entire group of owners a small monthly fee for a service is more lucrative than offering it as a one-time purchase when the vehicle is initially set up.
This is also due to the fact that the car ownership model is evolving rapidly and more and more buyers are renting or leasing their vehicles in one form or another.
Buying a car is no longer a huge, one-time investment meant to last for years, but rather adds to the growing list of monthly expenses consumers face.
What was right for the first buyer of a vehicle may not be right for the second person to own it just two years into its life cycle. This is where the features-as-a-service model has its advantages.
What’s more, if BMW can streamline its manufacturing process by essentially building a unique configuration of a model and then charging customers for access to convenience features like a heated steering wheel, it will succeed.
The automotive market is going through one of the biggest changes ever and competition is fiercer than ever. These microtransactions are seen as a way to smooth out cash flow, so they’re obviously not going away anytime soon.
