The company wants to offer subscription services that will be purchasable through the infotainment system
This could allow drivers to pay for autonomous driving on a road trip but not on their commute
This is part of the company’s plan to overtake Tesla
Automakers are always looking for new ways to increase their profits and many of them believe that their financial success in the future will be based on subscription services and repeat purchases.
Since the automobile has been invented, automakers have made money on one-time purchases, meaning that they don’t make much money on vehicles that are already on the road.
In order to tap into this market, many automakers have been working on subscription services that will require drivers to pay a recurring fee to benefit from all of the features of their vehicles.
This is made possible by the increasing presence of software inside new vehicles and the capability for over-the-air updates.
The latest automaker to toy with this idea is Volkswagen. The automaker’s Cariad software unit believes that it could offer a service that would allow drivers to pay for driver assistance features for a set distance.
This means that buyers could pay to use these features on a long road trip but not on their commute, which is the typical use case for such systems.
According to Volkswagen, combining this business model with level 4 and 5 autonomous driving systems will allow drivers to relax by using other features that could also be pay-to-use, such as online streaming services.
The German brand is not the only company to have announced a similar plan lately, since Volvo revealed that its advanced driver assistance system, called Ride Pilot, will be offered as a subscription on its upcoming top-of-the-line SUV. Unlike Volkswagen, this system will most likely employ a fixed monthly or yearly fee instead of a mileage-based price.
Another big part of having heavy software integration in vehicles is the ability to keep older vehicles up to date, which Volkswagen expects to be able to do via regular over-the-air updates.