Automakers Will Struggle To Sell Vehicle Subscription Services: Study

Only 21 percent of respondents were aware of the concept.

A new study says automakers will struggle to sell subscription-based vehicle features.

Anthony Alaniz

By: Anthony Alaniz

May 11, 2023 at 3:45pm ET

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Many automakers are looking at subscription services as a new revenue source. You can subscribe to almost anything today, and it was inevitable that the payment model would eventually come to cars. However, a new study suggests that automakers will struggle to convince buyers of their value.

The new Cox Automotive study asked 2,000 in-market car buyers about their interest in vehicle features offered through subscriptions. Only 21 percent of respondents said that they were aware of the concept. However, 41 percent indicated they were interested in such features.

Gallery: 2023 Mercedes-Benz EQE 350

2023 Mercedez-Benz EQE 350

2023 Mercedez-Benz EQE 350 2023 Mercedes-Benz EQE 350 Interior

While automakers might have to do some convincing to get people to subscribe, buyers are open to what they could offer. Sixty-five percent said they liked the benefit of trying out features without making a long-term commitment. Over-the-air updates are more prevalent in new cars, allowing automakers to add features, which was one aspect people liked, with 61 percent saying it was a benefit to upgrade or downgrade a vehicle as needed. Fifty-four percent liked the idea of accessing new technology all the time.

However, as open as people might sound about such services, they won't subscribe for the sake of it. Fifty-three percent saw subscription services as beneficial if they lowered the vehicle's upfront price. Seventy-seven percent were aware that subscriptions would make automakers more money, and 69 percent would shop elsewhere if a brand only offered certain features through a monthly payment. Nearly half – 49 percent – said they would keep their vehicles longer if they had features available on demand.

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Vanessa Ton, senior manager of market and customer research at Cox Automotive, said, "Automakers must ensure consumers perceive subscription-based features as a good value and not just a money-grab."

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Automakers have pushed to put certain features behind a paywall. BMW faced backlash when it proposed a subscription for heated seats last year. Mercedes took a different route, announcing in November that all-electric EQ owners could unlock addition performance for $1,200 a year.

While ecosystems and walled gardens exist in our life, with large portions of various digital services siloed from one to the other, we are in an era where Netflix, Amazon, Spotify, and even Apple Music, are available on almost every screen. Nearly everything is everywhere all the time, thanks to a piece of glass and a computer chip with internet connectivity, and consumers might not expect anything less from the screens in their cars.

Source: Cox Automotive

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