Car companies want to make extra money by billing car owners for software updates.
Volvo’s COO told Bloomberg that Volvo will not ask owners to pay for minor upgrades such as heated seats.
Mercedes charges $1,200 a year for the acceleration boost.
Car companies are jealous of the gym membership you never used or the streaming service you forgot about. They want a piece of that sweet, sweet recurring income for themselves, so they lock some features behind a paywall to get it.
But Volvo has its limits. While some rivals are looking to monetize every inch of car ownership, Volvo will not charge extra for minor software updates or feature upgrades, executives said.
“If you charge for software updates, it should be a big win for consumers,” COO Björn Annwall told Bloomberg. “We will not ask a person who bought a car for one million kroner ($96,500) to pay another ten kroner to heat the seats.”
Volvo could ask owners to pay for important updates like its self-driving system, he said.
To boost profits, automakers are looking to make money on software services in addition to vehicle sales. In some cases, that means charging the car owner a monthly or yearly fee to unlock extra perks such as remote start capability, heaters in his steering wheels, or extra performance.
Volvo’s approach is strikingly different from its competitors, who are pushing the boundaries of what customers pay extra for. Mercedes will soon allow electric car owners to pay $1,200 a year for an acceleration boost. In some countries outside the US, BMW encourages owners to pay for their heated seats, adaptive headlights, and other features over time.
After controversy over BMW’s pay-per-use bat warmer, the company released a statement, revealing that it has no plans to implement it in the United States.
Volvo may be on the right track here. His April survey by Cox Automotive found that he 75% of U.S. consumers don’t subscribe to most vehicle features.
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