Motorists are “Miffed” Over Auto Manufacturers Tacking on Extra Fees & Subscriptions for Basic Features - The Jewish Voice
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Tuesday, November 29, 2022

Motorists are “Miffed” Over Auto Manufacturers Tacking on Extra Fees & Subscriptions for Basic Features

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Edited by: TJVNews.com

Car owners are quite miffed these days, as auto manufacturers are seeking additional revenue streams and are tacking on fees and expensive subscriptions for basic features on vehicles.

Apparently, this is only the beginning of most costs associated with purchasing a new car, according to a report in the New York Post.

Recently, a public outcry was sparked when the BMW company began charging car owners in several countries $18 per month to turn on the heated seats in their own vehicles, the Post reported. Some people who were considering a purchase of a BMW car called the move a “dealbreaker.”

The Post reported that both consumer advocates and industry watchers have predicted that new charges being tacked on for basic essentials in vehicles will eventually become standard as auto manufacturers seek to follow a recurring revenue model pioneered by Tesla founder, Elon Musk.

Another recent measure that requires buyers of Buick, GMC and Cadillac Escalade cars to pay $1,500 for the mandatory “option” of buying three years of OnStar service was put in place by manufacturer, General Motors. The Post also reported that OnStar service includes features such as the ability to unlock vehicles from a mobile app and voice control. Since GM introduced this service in 1996, it had been optional.

Other car makers such as Toyota began charging $8 a month to start vehicles remotely using a key fob, a feature that had previously included in the price of the vehicle, according to the New York Post report.

Similar subscriptions are being given serious consideration by such car makers as Audi, Volkswagen, and Porsche, the report indicated.

Industry experts say that this portends the future of the automotive industry as manufacturers are seeking to transform car sales into bases for recurring revenue which could enrich them significantly for decades to come, the Post reported.

By the year 2030, General Motors is aiming to pad its pockets by up to $25 billion in revenue generated by subscriptions as well as software and services and told their investors of their money-making plan, the Post reported. This is up from an estimated $2 billion in 2020.  The Post also reported that another company known as Stellantis, which changed its name from Fiat Chrysler has a goal of increasing their revenue to $23 billion by 2030 using the same method.

Speaking to the Post, Sam Abuelsamid, Guidehouse Insights’ e-mobility analyst said, “Most automakers in the last couple of years have started talking about generating huge increases in revenue over the next decade, primarily off the backs of software and other subscription services.”

He added: “The approach that these companies are taking so far is certainly not customer friendly.” He singled out GM’s mandatory OnStar as effectively a “bogus” and a “hidden price hike.”

Abuelsamid also told the Post that other automakers are “fooling themselves” with their plans to juice revenue through subscription plans — and predicted they will run into consumers’ “subscription fatigue,” a trend recently evidenced by Netflix bleeding about 1.2 million subscribers in the first half of 2022.

The Post reported that the driving force behind the subscription push was developed by Elon Musk’s Tesla company. The report indicated that Tesla which has created a name for itself through its electric cars charges $9.99 per month to access music streaming, satellite maps and other features. It also asks a whopping $200 per month or a $12,000 one-time payment to access its experimental “Full Self-Driving” option.

On Sunday, Musk announced on Twitter his company will hike the price of the FSD option by 25%, to $15,000, starting September 5th, the Post reported.

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