If the auto industry had its way, users ought to pay a fee annually or monthly to use their cars, even if they have bought them. That’s why Subscription Pricing or Hardware and Feature as a Service or HaaS & FaaS is becoming increasingly popular in the auto industry.
Owning a car used to be simple – you put up a down payment and financing a portion of the car or you put down the entire amount to buy the car. Once you bought the car, you paid for the fuel, the annual insurance premiums, and at regular intervals, paid to get your car serviced. You really owned your car. But will that continue to be the case in the future?
If the automobile industry has its way, they don’t want you to own your car, not completely at least. Car makers want you to pay more for the car you “own” and keep on paying till you have the car in your possession. And how do they go about doing it? By charging you for features that your car already has.
A scary scenario Imagine this – you are out for a drive in your brand-new car after a hard week at the office. The car that you’re driving is the top-of-the-line version, with all the bells and whistles that the car company provides. You love driving and are having a good time. You try to tune the infotainment system to your favourite podcast, but you get a pop-up saying you need to pay a small fee to change what the infotainment system is playing for you. You ignore the message and try to adjust the climate control. You again get a popup saying that in order to change the temperature of your car’s air conditioner, you need to buy a subscription. Want to switch on your ventilated seats? There’s that pop-up notification again.
Irritated by all this, you just keep on driving, until you find an empty stretch of road, and you think that you would love to try out the super-fast acceleration of your new car that your sales advisor kept on harping about. You press the pedal to the floor, expecting the car to take off like a stabbed rabbit, but instead, you see your car just roll off as it usually does – there’s a pop-up message again, saying that in order to experience the super quick acceleration your car is capable of, you need to subscribe to a hyper performance pack from your dealer, or from your car manufacturer.
What car manufacturers are actually doing Car manufacturers like BMW, Mercedes and Tesla have already implemented a paywall model where they charge a fee for the features that their cars are already capable of. For example, in a number of European and North American countries, BMW has features like heated seats and heated steering locked behind a paywall. Similarly, some of Tesla’s advanced features, like higher levels of ADAS or “autopilot” driving, are locked behind a paywall.
