Subscription models are commonplace in many areas of daily life. They are also becoming increasingly popular for vehicle features. While manufacturers like Tesla and Mercedes have been using subscriptions for years, it was BMW, with such a seemingly simple optional extra as heated seats, that finally brought the concept to the forefront of public awareness.
For years, Porsche Taycan to activate features like the intelligent Range Manager or Power Steering Plus via a subscription. The Mercedes-Benz EQS comes standard with 4.5-degree rear-axle steering, which can be increased to 10 degrees via subscription. And with the Tesla Model 3, where rear seat heating has been available as a subscription option since 2020, the subscription model, rather than outright purchase, has long been standard practice.
For manufacturers, the subscription model opens up new avenues for optimizing revenue and production. While theoretically more resources are needed in production to equip every car with features like heated seats as standard, it also significantly simplifies the production process for automakers.
Furthermore, the material costs are naturally lower than what the buyer later pays to unlock the feature – whether via a one-time payment or a subscription.
The psychological component plays a significant role in subscription models. An extra €3,000 for modern driver assistance systems or €500 for extended 10-degree rear-axle steering? Many customers will likely forgo these options initially. However, once they own the car and know they can activate these features for a trial period of €30 or €15 per month, the barrier to purchase decreases, and the likelihood increases that, if they like the features, they will permanently activate them with a one-time payment.
The model is thus very much in tune with current trends. More and more people no longer want to own a car at all. Leasing and car sharing are particularly popular in large cities. The subscription model takes this desire for flexibility into account when it comes to optional extras. Someone who subscribes to a car for six months in the summer simply doesn't need heated seats. However, someone who takes over the vehicle in winter will most likely book this option, along with a heated steering wheel. The future, therefore, very likely belongs to the subscription model.
